HEFFNER &ASSOCIATESELDER LAW
Mark B. Heffner, Esq. , CELAHeffner & Associates
615 Jefferson BoulevardWarwick, Rhode Island
www.hefflaw.com
Planning for Incapacity:Wellness at Brown!
HEFFNER &ASSOCIATESELDER LAW
Disclaimer•Materials are for general education and should not be substituted for consultation with a competent estate planning attorney in your state•Materials presented from the perspective of Rhode Island•Rules and practice vary significantly from state to state and are subject to change
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Lifetime Planning: Health Care DecisionmakingAdvance Directive
Durable Power of Attorney for Health Care
Living Will
Selection of Agent
Selection of Successor Agent
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Lifetime Planning: Financial Decisionmaking
Joint accounts: Be careful!Durable Power of Attorney for
financesDetermination of Powers to
provideAgain, selection successor Agent
Selection of Agent (aka, “Attorney in
fact”)
Ex: Gifting and Estate planning
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Lifetime Planning: Financial Decisionmaking
Revocable Trust, aka, “Living Trust”Avoids/Reduces “Push-Back” of
Institutions with use of Durable Power of Attorney
Selection of Trustee & successor Trustee critical
Provide no protection for assets for nursing home cost
Instead, would need Irrevocable Trust
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Planning for post-deathWill—requires probate
Selection of Executor—same person generally as agent under financial
DPOARevocable Trust—if “funded” will avoid probate for those assets
Note: Need to check beneficiary designations (IRAs, life insurance, annuities), joint titling, as general “trump” Will or Trust provisions
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What happens if long-term care needed?
Medicare--limited long term care (LTC) coverage 20 days full
payment, up to 80 additional days with co-pay ($164/day)
Medicare LTC coverage initially applicable if individual has a three
day prior hospital admission & continues to require skilled care
After that….
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Private Pay costs for nursing home care
What is the average monthly cost of a nursing home in Rhode Island (according to the Rhode Island Department of Human Services)?
$9,113/month (approx $290/day)Actual costs range from approximately $7,500/month ($240/day) — $10,800/month ($360/day)
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Public benefits available for long-term care
Medicare: (limited) skilled nursing home & (potentially unlimited)
home careMedicaid: pays for skilled nursing
home and (limited) home & community-based services
Veterans benefits: (limited) nursing home and Aid and Attendance
benefits
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What is Medicaid?•It is not Medicare!
•Medicaid: in addition to general criteria (age, blind, disabled) & needing a level of care, must also fall within financial criteria (assets, income, transfer restrictions)
•Medicare: insurance model; no asset or income qualification requirements
•Substantial state to state variations
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Resources
Excluded (Single Person)•Home (equity value limit: $560K) if “intent to return”
•Household goods & personal effects( no value limit, unless exceptional)
•Vehicle (limit: $4500, unless used for transportation to medical appts)•Life Insurance ($4000 face limit)•Irrevocable Burial Contract, or funds set aside for burial ($1500)
•Funds otherwise available (limit: $4000)
Available
EVERYTHING ELSE
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Resources
Excluded (Married Couple)•Home: no equity limitation if residence of “Community Spouse” (CS) •Vehicle: if used by CS, no limitation on value•CS retains “Community Spouse Resource Allowance” (CSRA)
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Transfers of AssetsAny transfer occurring on or after February 8, 2006 is subject to five year lookback periodQ: What types of transfers fall within lookback period?A: Uncompensated (UV) transfers--i.e., those for which fair market value (FMV) not received by applicant or the applicant’s spouse Parent gives adult children each $10,000 Uncompensated transfer: $30,000
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Medicaid Planning TechniquesHighly individualized—one size definitely does not fit all!
• Spenddowns—debts, taxes, burial contracts. • Specialized annuities—married couples only
“Crisis planning” techniques include:
• “Reverse half a loaf” planning• Many more opportunities exist for married couples; however still “never too late” for single individuals
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Medicaid Planning TechniquesNon-crisis, or “pre-crisis” planning techniques include:• Make transfers, incur five year lookback
period• Transfers—must be mindful of tax implications, creditors—grantor Irrevocable Trusts useful device. • Durable Powers of Attorney with estate and Medicaid planning authority provided to agent
• Again, highly individualized as to what techniques to use & timing of use of techniques
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How to get startedArrange for consultation with competent elder attorneyPreparation: provide elder law attorney with individual family, financial and health informationInitial meeting should be at least an hourExpect fee for initial consultation
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National Elder Law Foundationwww.nelf.org
Locating competent elder law attorneyCertified Elder Law Attorney
Provides interactive state map of Certified Elder Law Attorneys (CELA)
in each state
HEFFNER &ASSOCIATESELDER LAW
Mark B. Heffner, Esq. , CELAHeffner & Associates
615 Jefferson BoulevardWarwick, Rhode Island
www.hefflaw.com