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.