Legal Issues as You Age: Control your destiny. Don’t let others do it for you. Kris L. Maser...

Legal Issues as You Age:Control your destiny.

Don’t let others do it for you.

Kris L. MaserOctober 20, 2014

What is Life Care Planning?

Wealth Accumulation

Dealing with unplanned issues along the way Leaving a

Legacy

Disability Planning Tools

• Advance Directives– Durable Power of Attorney– Health Care Directive– DNR / DNI Designation– Nomination of Guardian / Conservator– POLST

Advanced Directives

• Powers of Attorney (POA)– Statutory Short Form POA– Common Law POA– IRS POA

Advanced Directives

• Power of Attorney for Financial Affairs– Name Individual to Manage your Financial

Affairs– Power of Attorney Dies with Principal– Limitations on Authority– Gifting/Self-Dealing– Springing

Advanced Directives

• Must Read Document to Know What Authority is Allowed

− Property− A – M Powers− Self-Dealing− Gifting

What is a Health Care Directive &

History of the Health Care Directive in Minnesota

What is a Health Care Directive (HCD)?

• Defined by Minn. Stat. §145C.02 • Executed by a principal with capacity• One or more health care instructions for others to follow• May include a Health Care Power of Attorney to appoint a Health Care Agent in case the principal lacks capacity

HCD History in Minnesota

• Living Will• 1993 Durable Health Care Power of Attorney• 1998 Health Care Directive

–Minn. Stat. §145C 2009

Why is it important to have a Health Care Directive

&What can happen if you do not have a

Health Care Directive

Importance of a Health Care Directive

Protects your right to make medical choices - even if you are unable to speak for yourself!

Importance of a Health Care Directive

• If your Health Care Agent is available, he/she will know your wishes and speak for you.• If your Agent is unavailable, your physicians can use your HCD to help guide them until an Agent can be reached or until you can communicate for yourself.

If you do not have a Health Care Directive

• There is no way to insure your treatment preferences are followed.• You will still receive medical treatment if you

don’t have a HCD and cannot speak for yourself.

If you do not have a Health Care Directive

• You may need appointment of a Guardian to make personal care decisions

–Guardianship requires a court proceeding

Distribution Plans/Probate vs. Non-Probate Assets

• Intestate• Will• Revocable Trust• Joint Tenancy• Beneficiary Designation

Probate vs. Non-Probate Assets

• Probate Assets Held in Decedent’s Name Alone

• Non-Probate Assets are with a Joint Owner,

Designated Recipient, Beneficiary or Trust

Advantages of a Will

• Ease of Establishment• Simplicity During Life• No Need to Retitle Assets

Disadvantages of a Will

• Requires a Probate of Your Estate• Some Loss of Privacy• More Expensive for Heirs

Trusts

• Inter Vivos Trust (Set up During Lifetime) – Revocable– Irrevocable

• Testamentary Trust (Set up Upon Death

in a Will)

Advantages of a Revocable Trust

• Maintain Privacy of Assets & Family Matters• Avoid Probate of Your Estate• Disposition of Assets at Death• Provides Management of Your Assets (if you become incapacitated)• Tax Planning

Disadvantages of a Revocable Trust

• Cost to Establish• Cost to Administer• May Not Save Taxes• Creditor Claims not Cut Off• Requires Constant Vigilance

Wills: Revocable Trusts:- Can be Used to Plan for - Can be Used to Plan for

Estate Tax Estate Tax- Only Effective at Death - Effective Immediately &

Distribute Property- Public - Private- Involve Complex Legal Rights - Involve Complex Legal

Rights- Must go Through Probate - May not go Through

Probate- Should be Stored Properly - Should be Stored Properly- Affairs Stop Upon Your Death - Continuity in Your Affairs

Eligibility for Medical Assistance

• Minnesota Resident• Blind, Disabled or Over Age 65 • Meet Financial Eligibility Rules

Excluded Assets

• Homestead (possibly)• One Vehicle• Tangible Personal Property• Pre-funded Funerals• Supplemental Needs Trust• Special Needs Trust

Unavailable Assets

• Certain Jointly Held Assets• Assets of Unprobated Estate• Property Involved in Pending Legal Action• Certain Trusts (Most Deemed Available)• Certain Annuities (Most Deemed Available)

Spousal Impoverishment Rules

• Income of Community Spouse Protected (for now)

• Spousal Share of Assets Protected until

Death of Community Spouse

Spousal Impoverishment Rules (cont.)

• Income of Institutionalized Spouse may be

Allocated to Reach $1,940 Base Allowance

(for Community Spouse)• Additional Allocation to Provide Needed

Shelter

Costs up to $2,931

Asset Assessment Date

• First Day of Continuous Stay (of 30 Days) in

Skilled Care

or• Date of Long Term Care Consultation

and• Receipt of Community Services Covered

as Long Term Care

Asset Assessment

• ½ of Assets to Community Spouse or• Minimum ($33,278) or• Maximum ($117,240) or• Additional Allocation to Provide Needed Income• $3,000 Allowed for Applicant

(Skilled Care)

Look-Back

• The look-back period for transfers or gifts is 5 years (60 months)

Transfer Rules Exceptions

• To Community Spouse• To Representative of Community Spouse• To Disabled Child• Undue Hardship

Homestead Transfer Exceptions

• To Spouse• To Minor or Disabled Child• To Son/Daughter – 2 Year Caregiver Rule• “Equity Interest” Sibling Residing There

Asset Reductions

• Prepaid Funeral Plans• Vehicle• Household & Personal Items• Homestead Maintenance/Repairs

Asset Reductions (cont.)

• Care Costs• Personal Services Agreements• Debt Reduction• Pooled Trust

Estate Recovery Issues

• Claim Exists for Benefits Received

by Self/Spouse• Collectable only on the Death of

the 2nd Spouse

Veterans Benefits

Who Should be Assisting Veterans?

• Family member• Accredited Agent or Attorney• Agent through VSO• County VSO

Veteran’s Benefits

• Federal Benefits

• State Benefits

Veteran’s Administration

• Two Branches–Veteran’s Health Administration–Veteran’s Benefits Administration

• VA Hospitals/Nursing Homes• Prescription Benefits• Outpatient Dental• Services for the Blind/Hearing Impaired

Veteran’s Health Administration

Veteran’s Benefits Administration

• Compensation for Service Connected Disabilities• Home Loan Guarantees• Special Monthly Pension• Burial Benefits• Life Insurance

Veterans Administration Benefits

• Service Connected Disabilities

vs.

• Non-Services Connected Disabilities

Veterans Administration Benefits

• Basic Eligibility Criteria

- Low Income Pension

- Housebound Benefits

- Aid & Attendance

Veterans Administration Benefits

• Determining Eligibility

- Assets

- Income Limits

Veterans Administration Benefits

• Assets – Sufficient Means Standard

• Used to be approximately $50,000 for Single Vet

• Used to be approximately $80,000 for Vet with Dependent

Veterans Administration Benefits

• Assets – Example #1– 75 Years– $30,000 Assets– Medical Need

Veterans Administration Benefits

• Assets – Example #2– 90 Years– $30,000 Assets– Medical Need

Veterans Administration Benefits

• Income Limits (Low Income Pension)– Vet with No Dependents $12,652/year– Vet with One Dependent $16,569/year– Widow(er) with No Dependents

$8,485/year

Veterans Administration Benefits

• Income Limit (Housebound Benefits)– Housebound Vet with No Dependents

$15,462/year– Housebound Vet with One Dependent

$19,380/year– Housebound Widow(er) with No Dependents

$10,371/year

Veterans Administration Benefits

• Income (Aid & Attendance)– Vet with No Dependents $21,107/year– Vet with One Dependent $25,022/year– Widow(er) with No Dependents

$13,563/year

Veterans Administration Benefits

• Income:

Gross Income

Minus (-)

Ongoing/Recurring Medical Expenses

Veterans Administration Benefits

Income Example: Married Veteran $2,500 / Gross ( 192) Medicare ( 208) Supplemental Insurance ( 200) Drugs ( 700) Day Program ( 60) Over-the-Counter Medications $1,140 Net Income

Veterans Home Eligibility

• Minnesota Resident or

Service Credited to Minnesota• Honorable Discharge• 181 Days Active Duty• Spouse of Eligible Veteran

Spouse must be Age 55+

• Medical Need

Veteran’s Home Transfer Rules

• Prior to Admission – All to Spouse (Must be Income

Producing if Income Allocation Received)

• To Non-Spouse – One Year Prior to Admission

Veteran’s Home Transfer Rules

• No Gifting if Receiving Income Allowance

• No Services Payments Allowed

Veteran’s Home

• No Estate Recovery

• No Spousal Asset Limit

• Income Allowance

– Fixed Allowance and

– Individual Allowances – Certain Expenses

Elder Care Confusion

A Life Care Plan PutsThe Client First

Continuedcare

follow up

Action Plan

Addressproblemswith care

The Life Care Planning Process

6 monthfollow up VA

Benefits

Meet with attorney

and life care coordinator

Assessmentof needs

FinancialPlanning

Annualassessment

Change inFinancialsituationMedicaid

applicationhome

EstatePlanning

6 monthfollow up

Placement

Annualassessment

6 monthfollow up

MedicaidALF/NH

Disclaimer: This has been prepared for general information purposes only. This information is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. The information contained in this

presentation should not replace the advice of competent legal counsel licensed in your state.