August 4

Could You Afford a Nursing Home if You Had to?

 

In 1900, average life expectancy in the U.S. was about 47. Today, it’s nearly 80. As we are getting older, the chances of needing long-term or nursing home care has increased dramatically. In fact, one estimate projects that 70% of people turning 65 will need long-term care at some point. If that is you or a loved one, you may be wondering how to pay for nursing home care should it become necessary.

While no one wants to think about end of life, it is inevitable. So is the rising cost of nursing home care. Spending one’s last years in a nursing home facility translates to about $7,000 to $12,000 a month (that’s $84,000 to $144,000 a year). For most families, that cost can quickly deplete the spouse’s or extended family’s resources.

Long-term care insurance is highly recommended and can assist with both home care and nursing home care, but not everyone can afford the monthly premiums.  Traditional health insurance and Medicare do not cover custodial, long-term nursing home care.  Medicaid is the only government program that will pay for long-term nursing home care, but the nursing home resident must be financially eligible to qualify for coverage.

To be eligible, a single Medicaid applicant’s monthly income must be below certain income guidelines (in New Hampshire, this is tied to the Medicaid reimbursement rate for the particular facility involved), and the applicant may only have $2,500 in countable resources with certain physical assets (home, car, tangible property) at least partially excluded.  The rules are much more complex for married couples since the community spouse is entitled to both an “income allowance” (currently at least $2,003/month up to a maximum of $3,023/month) and a “resource allowance” (currently up to a maximum of $120,900).  Excess assets must be “spent down,” and the community spouse should review all available options.  It also is important to mention that there is a financial transaction “look-back” period of five years further complicating the planning and application process.

So, when it comes to how to pay for a nursing homes, the vast majority of families find themselves between qualifying for Medicaid and the ability to comfortably self-fund the high cost. Often, these families spend down their assets to the Medicaid limits, and, while the nursing home resident may qualify for Medicaid, his/her spouse or loved ones could be left with a bleak financial future.

There is help. The rules governing Medicaid are complex and this is not a time to risk eligibility and assets by going it alone. Hiring an experienced elder law attorney is a critical first step. Elder law attorneys are experienced estate planners who are knowledgeable about Medicaid rules and can help you legally protect your assets. CELAs (Certified Elder Law Attorney) are elder law attorneys who have earned special certification through demonstrated knowledge and a stringent ethical and professional review.

While planning for end-of-life requires deliberate and long-term action, the circumstances that lead to the need for nursing home care are often sudden and unpredictable. The sooner families take action, the more options they will have to ensure their loved one will get the best care while protecting valuable assets.

Understanding NH Medicaid Rules - Updated Jan 2020

February 16

Transfers to Spouses Under Medicaid

Is it too late to plan for Medicaid if my spouse already is in a nursing home?

Many individuals fully intend to take care of their spouse until the end of life, but ultimately must make a very difficult decision to place a spouse in a long-term nursing facility when the caregiving needs become overwhelming or there is a change circumstances. Frequently, the “at-home” or “community” spouse comes to our office believing it is too late to do any planning for Medicaid eligibility, having been advised that all planning had to have taken place five years in advance.  With respect to a married couple, this simply is not the case.

To be eligible for Medicaid nursing facility benefits, an individual must meet financial eligibility guidelines, including having only a certain amount of resources/assets remaining in his or her name. It is true the Medicaid laws generally impose a period of disqualification if the Medicaid applicant (or a spouse) has transferred assets out of his or her name within the prior 5 years in a deliberate attempt to reduce resources.   However, there are exceptions to these transfer-of-asset disqualification rules and Medicaid penalties, and one such exception relates to spouses.

 Assets can be transferred – or “gifted” – in many ways. For instance, the removal of someone’s name from a joint account constitutes an asset transfer to the other joint owner.   Similarly, one person’s name can be removed from a deed held in joint tenancy, and that would constitute a gift of one-half the value of the real estate to the remaining owner.  If an IRA or 401k is cashed in and the net proceeds are deposited into someone else’s bank account, the net proceeds have been gifted (and unfortunately, income taxes may be accelerated).

The Medicaid rules expressly permit these types of asset transfers and gifts to be made between spouses without any penalty at all. When an application for Medicaid is filed on behalf of someone who is married, the assets of the couple are considered when determining Medicaid eligibility, even if the assets are titled solely in the name of the non-applicant spouse.  Moving assets between spouses does not shield those assets from being counted as an available asset when applying for Medicaid nursing facility benefits, but it ensures that after some additional planning is conducted, the transferred assets remain available for future use by the “at-home” spouse.  So, it is important to know that when spouses are involved, Medicaid planning can occur even after a nursing home admission because transfers between spouses never triggers a Medicaid disqualification or penalty.

There are other important exceptions to the transfer-of-asset disqualification rules, and you may wish to consult an elder law or special needs planning attorney to evaluate whether any exceptions are available in your circumstances.

 

 

February 7

What is the Difference between a “Living Will” and a “Durable Power of Attorney for Health Care”?

Question: What is the difference between a “living will” and a “durable power of attorney for health care?”  Do I need both and, if so, which is more important?

Answer:

It is important to know about “advance directives” and how they work. Advance directives are specific instructions about the type of future medical care you want, or do not want, if you become unable to make decisions for yourself.  These are documents you prepare and sign in ADVANCE of when you actually need medical care.

Living wills and durable powers of attorney for health care are types of advance directives.

A durable power of attorney for health care names one or more people to make decisions for you if you become mentally incapacitated. The document empowers a person of your choice to speak with members of your care team, obtain second opinions, sign consents, and to make decisions if you are unable to do so.  A healthcare power of attorney ensures you can provide instructions on the personal health care decisions that matter most to you.  This advance directive also may authorize a loved one to direct doctors to give or withhold life sustaining treatment if were you determined to be near death or permanently unconscious. It is important to note that without this advance directive, loved ones only have a few months in which they can make decisions for you, after which time a court ordered guardian would be required.

 

In New Hampshire, a living will provides instructions to your medical team if you have not named an individual to make decisions for you, or if there are no individuals available to carry out your wishes. This document focuses on end-of-life care were you to be declared near death or permanently unconscious.  A living will provides instructions to your medical team about care choices, but does not name an individual to make any decisions on your behalf.

 

In New Hampshire, these two advance directives now comprise two sections of the same form. You do not have to fill out both sections but if you do, the instructions should be consistent. You can find these documents at hospitals or nursing homes, and on line at www.healthynh.com.  An attorney also could prepare these documents for you when preparing other estate planning documents and help you ensure the documents express your personal wishes.

 

 

February 2

What is Elder Law?

What is elder law and how do I find an elder law attorney?

Elder law is a focused practice for lawyers who choose to handle issues commonly faced by elderly and disabled individuals. Attorneys may advertise that they specialize in elder law if they have met specified qualifying criteria, which usually includes a written examination and evidence of extensive experience in the area.

Like any other person, an older adult may need assistance with many types of legal issues, but an elder law attorney focuses his or her practice to meet these needs. Most lawyers who consider themselves elder law attorneys are familiar with Medicaid and long-term care planning, Medicare benefits, guardianship, estate planning and probate.  Elder law attorneys also are likely to be familiar about special needs trusts, advance directives and estate planning for disabled family members.

In New Hampshire, the only formal way an attorney may demonstrate a specialization in elder law is to be certified by the National Elder Law Foundation as a Certified Elder Law Attorney. Ann Butenhof has secured this certification, as have a handful of other New Hampshire attorneys.   You may find a list of Certified Elder Law Attorneys at www.nelf.org.   Another good resource is the National Academy of Elder Law Attorneys. www.naela.org which provides an online resource for locating members of that organization.  NAELA is the only national organization of elder law attorneys.  As with other legal practice areas, the best method of locating a competent elder law attorney is to speak with friends, relatives and colleagues, and then to interview the prospective attorney about his or her specific experience and training.