The Basic Concept 2006
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 expenses.
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 |
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Qualified Personal Residence Trust |
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Irrevocable Trusts |
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Spending Down your money |
Definitions:
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Institutionalized Spouse: A married person who is placed in a nursing home or similar facility. |
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Community Spouse: A married person who is living in a private home, whose spouse is living in a nursing home or similar facility. |
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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. |
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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. |
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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. |
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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. |
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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. |
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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. |