Elder Law is for the
third stage of an adult life, as set forth in the financial
planning page. It is a time after retirement, when one
has to determine how he wants to utilize his money for the
remainder of his life.
The concept's focus differs from that of basic estate
planning because there is a focus of the transfer of money
to the next generations, loved ones and charities.
For those with assets of $1,000,000 or less, there also
must be the consideration of Medicaid Planning. The reason
is that, at the present, the cost of nursing home care averages
$10,000/month or about $120,000/year. One who is in this
net worth bracket is concerned that he would have to pay
out his life savings to cover his medical costs. When that
is depleted, he would have to then go on public assistance
or Medicaid. The $50.00 a month that Medicaid allows one
to keep on a monthly basis, in truth, cannot sustain a person,
provide for his clothes etc.
As of February 2006, Medicaid laws have changed. The old
law allowed a person to transfer their assets, and be eligible
for Medicaid in three years. After February, 2006, the law
changed to extend that period of time to five years. This
makes EARLY Medicaid planning essential. If you are 60 or
older, you should not wait.
The great question that arises is how to keep as much
of his life savings, or access to his life savings, as is
possible while having the government pay for his medical
The solutions are extremely varied and specific to each
person's circumstances. The earlier you plan, the more options
you have, and the lest costly the plan.
Some of the options your attorney will likely discuss
with you are the following:
- Grantor retained Deeds
- Qualified Personal Residence Trust
- Irrevocable Trusts
- Spending Down your money
- Institutionalized Spouse: A married
person who is placed in a nursing home or similar facility.
- Community Spouse: A married person who is living in
a private home, whose spouse is living in a nursing home
or similar facility.
- Look Back Period: That period of time
for which the government wants financial records indicating
whether a proposed institutionalized spouse has transferred
any of his/her property. Presently, the look back period
is five years.
- Penalty Period: That period of time
during which a proposed institutionalized spouse is ineligible
for Medicaid because of a transfer of his property during
the look back period.
- Community Spouse Resource Allowance: This is the amount
of money or assets a community spouse is allowed to keep.
Any additional assets would be subject to claim for medicaid
by the government.
- Medicare: Is an health care entitlement
program. This means that once a person reaches a certain
age, he/she becomes eligible for this program regardless
of financial need. It covers only skilled care, care required
by a skilled professional like shots and rehabilitation.
- Medicaid: Is an health care program
for those in financial need. One cannot become eligible
with assets over a certain limit. If ever one who has
received medicaid money ever gets money or assets, the
government will ask for reimbursement for the medicaid
services and money spent for medicaid coverage.
- Long Term Care Insurance: Covers the
cost of daily unskilled care, or custodian care. It does
not cover skilled or professional care. Skilled and professional
care is rehabilitation with an eye to restoring a person
to his/her previous condition. Long Term care will cover
assistance with bathing, dressing, eating, those skills
which are part of a person's daily necessary care, which
does not require a skilled professional.
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