Feb
13
2017
0

Using An Annuity For Medi-Cal Eligibility For Spouses

In previous blogs, we have discussed various techniques, within the regulations, for obtaining Medi-Cal qualification for an ill spouse, when the couple has excess assets. These techniques include “spending down,” gifting and filing a court petition to obtain an order that allows the couple to keep all of their assets. In certain circumstances, especially between spouses, an annuity can be a useful tool to consider for Medi-Cal qualification.

As discussed in previous blogs, the ill spouse (Medi-Cal applicant) and the well spouse, can keep all of their qualified funds, like IRAs and 401(k)s, in any amounts, and still qualify for Medi-Cal. Then, the ill spouse cannot have more than $2,000 in non-qualified funds, like a savings or brokerage account in his name. The well spouse can have up to $120,900 in non-qualified funds in her name. So for instance, if the couple has $300,000 in non-qualified funds, they would have $177,100 too much for the ill spouse to qualify for Medi-Cal.

To use an annuity for qualification, the ill spouse would transfer his non-qualified assets to the well spouse. There is no Medi-Cal penalty for inter-spousal transfers. Then the well spouse would purchase an annuity with that money in her name, and name someone other than her ill spouse as the pay on death beneficiary of the annuity. Distributions would be made periodically from the annuity to the well spouse in payments scheduled to be exhausted during her life expectancy, pursuant to social security life expectancy tables. The well spouse can keep all of her income from the annuity, without penalty. In addition, as of January 1, 2017, there can be no recoupment by Medi-Cal against the annuity after the ill spouse passes away, because a pay on death beneficiary has been named in the annuity. This technique is not appropriate in all situations, and may be discussed with your elder law attorney along with other options.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com, we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help the older client and their families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Oct
10
2016
0

October, 2016 Medi-Cal Reference Guide

This Medi-Cal Reference Guide reflects some of the most frequently requested information we receive regarding Medi-Cal qualification.

Community Spouse Resource Allowance (CSRA) $119,220. This is the amount of non-qualified money or investments that the well spouse may keep. Either spouse may keep any amount of qualified assets, such as IRAs.

Monthly Maintenance Needs Allowance (MMMNA) $2,981. The well spouse is allowed to keep all of her income. The MMMNA is the minimum amount of monthly income that the well spouse is allowed to keep. If she is under this amount, the income of the ill spouse is applied to bring the well spouse up to the $2,981 amount. This calculation is set forth in the accounting that is presented with the application to Medi-Cal.

Divestment Penalty Divisor (APPR) $8,189. This is the monthly amount that the state pays to Medi-Cal nursing homes, minus a share of cost from the applicant. The APPR is also the gifting penalty divisor which is used in calculating periods of ineligibility for Medi-Cal, using the current 30 month look back period. So for instance, if the Medi-Cal applicant gifted $20,000 to a child in October, 2016, she would be ineligible for Medi-Cal for two months. Divide $20,000 by $8,189 and round down to two. The applicant would be ineligible in October and November, but would be eligible in December. There is no penalty for gifting between spouses.

Applicant Resource Allowance $2,000. This is the amount of assets that the applicant can keep, whether he is single or married.

Monthly Personal Needs Allowance $35. This is the amount of income the applicant can keep. The applicant is also given credit for his part B Medicare premium.

This off course is only part of the picture. Please feel free to contact our office for additional information.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com, we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help the older client and their families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Oct
22
2015
0

Alzheimer’s Disease – The 10 Warning Signs

Every 70 seconds someone is diagnosed with Alzheimer’s disease. The Alzheimer’s Association has a list of the 10 warning signs of Alzheimer’s disease, as follows:

  • Memory changes that disrupt daily life.
  • Challenges in planning or solving problems.
  • Difficulty completing familiar tasks at home, at work or at leisure.
  • Confusion with time or place.
  • Trouble understanding visual and spatial relationships .
  • New problems with words in speaking or writing.
  • Misplacing things and losing the ability to retrace steps.
  • Decrease in judgment or poor judgment .
  • Withdrawal from work or social activities.
  • Changes in mood and personality.

If you notice these signs in your loved one, the Alzheimer’s Association recommends that you consul a physician. An early diagnosis will provide better opportunities for treatment. In addition, estate planning, asset protection and financial planning opportunities through your elder law attorney are more available to the older client before dementia and memory loss becomes severe.

The modern developments in estate planning for the older client involve asset protection, and a plan to determine how an increased need for care will be paid for over time.

For additional information please feel free to contact our office. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

May
11
2015
0

Medi-Cal, Capital Gains and the Home

In previous blogs, we have discussed how we can establish the home as an “exempt asset” for qualification for Medi-Cal. Your elder law attorney can help you take the steps necessary to exempt your home and help you qualify for Medi-Cal. However, if your home is in your estate when you pass away after having been on Medi-Cal, the state can pursue a recovery lien against your home. The state will want to recoup the funds they have paid to the nursing home on your behalf.

Keep in mind however that the state cannot pursue a recovery lien against your home if your home is not in your estate when you die. The remedy for this may be for you to transfer your home to a child or other family member after you have established the home as an exempt asset for qualification for Medi-Cal. But beware, there could be a tax problem. If you make such a transfer to a child, the child will assume your tax basis on the property. This means that if the child then sells the property, he or she may have to pay capital gains tax on the sale. This tax is basically calculated on the difference between the purchase price you the parent paid for the property, and the sale price the child obtained. The child would not be able to take advantage of the $250,000 capital gains tax exclusion on the sale that the parent had under Federal Tax Code Section 121.

To remedy this problem, the property could be transferred to a child with a reserved life estate in favor of the parent. The deed for this transfer from the parent to the child would create a split interest on the record, wherein the parent retains a life estate in the property, and the child is the grantee of the remainder interest in the property. After the parent dies, the child should receive a full step up in basis on the property under IRS regulations. The child could then sell the property at the time of the parent’s death, without incurring capital gains. The home would not be available for Medi-Cal recoupment after the home is transferred to the child with the reserved life estate in favor of the parent. This procedure is recognized by Medi-Cal provided that the prescribed procedure is used, and the correct language is utilized in the deed. There are of course other issues you will need to consider regarding the transfer of the home. Your elder law attorney can help you through this process if it is appropriate for your situation.

This information is not to be taken as legal advice, and you are encouraged to see your Walnut Creek Elder Law Attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Jan
22
2015
0

My Dad Has Already Done Some Gifting! Can He Still Qualify For Medi-Cal?

California does have gifting penalty rules. If the rules are not followed, you could create periods of ineligibility for Medi-Cal. If you follow the rules, Medi-Cal can pay for your stay in a skilled nursing facility, minus a share of the cost that you would pay. We have seen monthly bills of $10,000 and more from skilled nursing facilities.

You can gift any amounts of money or assets to your spouse without penalty, and she can keep up to $119,220, plus her IRAs and “exempt assets, and you can still be qualified for Medi-Cal.

If you gift your money and other non-exempt assets to someone other than your spouse, penalties may apply. The Medi-Cal application asks if you have made any gifts of non-exempt assets to someone besides your spouse, within the last 30 months. If you have, that amount is divided by $7,628. This is the amount that Medi-Cal pays monthly to nursing homes, minus the share of cost paid by the Medi-Cal recipient. It is called the Approximate Private Pay Rate, also known as the APPR.

So for instance, if you gave $40,000 to a grandchild for college tuition during January of 2014, you would not be eligible for for Medi-Cal for the next 5 months. You would not be eligible for the months January through May. You would be eligible however in June, 2014. To figure this out, divide the gifted amount of $40,000 by $7,628 and you will get 5.24, which rounded down is 5 months of ineligibility. You can also give the same amount of a gift on the same day to two children, and still only get 5 months of ineligibility. There are also other rules which can be employed which allow us to transfer monies over time, and thereby significantly reduce the number of months of ineligibility. The nice thing about these rules, as they presently exist, is that the penalty begins to run during the month that you made the gift.

When the Deficit Reduction Act (DRA) is adopted in California, which could be any time, there will be a five year look back instead of a 30 month look back penalty period for gifting. If we take the above example under the DRA rules, of the $40,000 gift to a grandchild, you would be ineligible for 5.24 months after you have entered the nursing home. If you gifted that amount to two people, you would have two periods of ineligibility of 5.24 months each. Also, under the DRA, the more liberal rules for gifting over time will be severely restricted.

As a result, you should proceed now with your long term care planning with your elder law attorney.

For additional information, you can contact your elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the law offices of Michael J. Young, 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA http://www.WalnutCreekElderLaw.com, 925-256-0298,lawyoung1@gmail.com, we practice elder law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with “Sustainable Estate Planning” TM, long term care planning, asset protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order to help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension Benefit.

Jun
09
2014
0

How To Convert Your Life Insurance Policy To Help Pay For The Cost of Senior Care

Some of our clients have asked whether they should let their life insurance premiums lapse, as part of budgeting for the cost of care for their loved one. Many of our clients have been making premium payments on their life insurance policies for a long period of time.

My answer is to first find out whether their life insurance policy has a value that can be converted to a long term care benefit. As part of the process, we present a copy of the policy to a Life Care Funding Company along with a simple application. The company underwriters will determine whether they will make a cash offer to you for the purchase of the policy. If they make such an offer and you accept it, the cash is then placed into a benefit account that is professionally administered by the company.

 Payments from the benefit account are then made monthly to the care providers for the benefit of the individual receiving care. Payments can be made for instance to assisted living communities, nursing homes, retirement communities and home health care providers.  

Once the life insurance policy is converted to a long term care benefit, you will no longer make premium payments to keep the life insurance policy in effect.

For additional information, you can contact elder law attorney Michael J. Young. This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Apr
28
2014
0

Special Needs Trust & Inheritance & Workshop 5-8-2014

Special Needs Trusts and Inheritance:

Q: Our father just passed away and left $400,000 in his revocable living trust to myself and my brother. My brother is on SSI and will lose his benefit when he receives the inheritance. What should we do?

 A. There is a remedy for this problem when someone dies, and their revocable living trust does not have a special needs trust provision for a special needs beneficiary. Under the law, the revocable living trust became irrevocable when your father died. As a result, it is too late for you to amend the trust to include a Special Needs Trust for your brother.

 However, the California Probate Code does allow the Court to amend the trust to include a special needs trust upon a petition to the Court from the special needs beneficiary. The special needs beneficiary files a petition with the court requesting that the trust be modified to include a special needs trust for himself for his part of the inheritance. Your brother, who will be the petitioner, will tell the court in the petition that had your father gone to an elder law attorney who would have advised your father about the addition to his revocable living trust of a special needs trust for your brother, that your father would have requested that addition.

The courts have been willing to grant these petitions. After the court signs its order for the modification of your father’s trust, the inheritance for your brother will flow into his new Special Needs Trust and he will not lose his public benefits. Your Walnut Creek Elder Law Attorney can advise you and help you in the preparation of a petition for the modification of a revocable living trust after the maker of the trust dies.

This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers, Seniors and families through their Elder Care Journey. We help families with long-term care planning, asset-protection plans, special needs trusts, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Nov
04
2013
0

Peace of Mind Now For Baby Boomers and Seniors Facing Retirement

A big issue now facing Baby Boomers and seniors is, surviving in retirement. We should have our “Ducks In A Row” now regarding health and financial issues, and there are many things we can do.

 Most of our clients do not have long term care insurance to pay for a stay in a nursing home. If they do, the policy would probably not pay the full cost. Fortunately however, California has Medi-Cal, which will pay for a stay in a nursing home provided that you qualify. You can now set up a long term care plan through your elder law attorney, as part of your estate plan, to provide for asset protection and qualification for Medi-Cal. For veterans, the plan will also help for qualification for the VA Aid & Attendance Pension Benefit to help pay for in home care and assisted living facilities. Your plan will also confirm your overall desires regarding how your assets will be spent for your care at home and otherwise. If you lose capacity, your loved ones will have the authority to follow through with your plan.

 The home is often our clients’ largest asset. You can take steps now through your estate planning documents to assure that your home will pass to your loved ones as a legacy, without a Medi-Cal lien, so that the state will not be able to recoup the nursing home payments it has made for you.

 Many Baby Boomers’ do not have sufficient savings to live on through retirement. The stock market has hurt many portfolios in the past. Fortunately however, Social Security is still in existence. Some analysts say that the program can pay for benefits for the next 25 years for the general populace. There also seems to be a consensus of opinion, that any changes in the law should not affect Baby Boomers, and that the fund will be available for them. Although you can begin taking benefits at age 62, this could be a 25% reduction of what you would receive if you waited until you are 66. If you wait until age 70, this could raise your benefit by 8%, so wait longer if possible.

 For additional peace of mind, you can change your life style just a little bit, and try to keep more of what your earn. I recommend reading The Millionaire Next Door by Thomas J. Stanley in this regard. Stanley gives examples of how changing your lifestyle somewhat, and giving up certain luxuries, will allow you to put more money into your retirement accounts on an ongoing basis.

 This information is not to be taken as legal advice, and you are encouraged to see your elder law attorney. At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers and families through the Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Jul
19
2013
0

Baby Boomers Predict The Future!

Baby Boomers Predict The Future!

Wouldn’t it be nice to be able to predict the future for us Baby Boomers, and start planning for it! But we do know certain things about our future …

  •  On average, 10,000 people are turning age 65 every day.
  • It is predicted that at least 70% of people over age 65 will need long-term care services.
  • Currently, the median cost of long-term care for one year in the United States is $83,950.00.
  • In 30 years, when the last of the Boomers reach age 65, the price of long-term care is expected to be at an all time high of $190,000 per year.
  • Currently, the average amount of time a person needs long term care is 2.7 years.

 As my grandson would say, “OMG!”

As a senior estate planning attorney, and a Baby Boomer, we need to ask ourselves what we can do to plan for our long term care. GE Long Term Care Insurance conducted a study and found that nursing home costs are rising at a rate of 5% every year, outpacing inflation. With the rapidly growing elderly population this is the simple law of supply and demand.

 So, what can we do to prepare for the second half of life? If you or your spouse are age 65 and one of you goes into a nursing home, do you have a spare $513,000 lying around to pay for your or your spouse’s care.

 We still have Medi-Cal in California, which pays for the cost of a skilled nursing facility. The VA Aid & Attendance Pension benefit is still available to help pay for in home care and assisted living facility costs.

But you need to “get your ducks in a row” ahead of time to plan for qualification for these benefits. For starters, Baby Boomers are now taking advantage of modern asset protection and government benefits planning qualification techniques, which are incorporated into their estate planning documents. Also, one of our main goals is to preserve our homes for our children, without a lien for payback to Medi-Cal. With the modern language in your estate planning documents, if you become incapacitated, your spouse or loved one can follow through with qualification and asset protection techniques under the Medi-Cal and VA regulations.  

This information is not to be taken as legal advice, and you are encouraged to see your senior estate planning attorney before attempting any of these techniques. 

At the Law Offices of Michael J. Young, at 1931 San Miguel Dr., Ste. 220, Walnut Creek, CA www.WalnutCreekElderLaw, 925-256-0298, lawyoung1@gmail.com we practice Elder Law and we help Baby Boomers and families through the Elder Care Journey. We help families with long-term care planning, asset-protection plans, comprehensive estate planning, wills, trusts and powers of attorney. We also help Baby Boomers and families get their “Ducks in a Row” in order help them qualify for Medi-Cal and the VA Aid & Attendance Improved Pension benefit.

Apr
22
2013
0

Start Walking for Your Health!

People are living longer and are enjoying healthier lives for longer periods of time. George Burns, who lived to be 100 said, “I’m going to stay in show business until I’m the last one left!” I see attorney friends at the courthouse who are over 80. When I talk to them, I discover that they have no intention of retiring. Mickey Mantle once said, “If I knew I was going to live this long, I’d have taken better care of myself.” This is a funny line, but by exercising, we can expect to live long and productive lives.

 A report by the American College of Sports Medicine says that by the year 2030, there will be more than 70,000,000 people in this country who are over the age of 65. And, the fastest growing segment of the population will be people who are over age 85! But, we want to be healthy as we grow older.  

 Walking has been reported to be the easiest exercise to do, which also has the greatest benefits. According to a report by the Mayo Clinic, you can literally walk your way to fitness and good health. Several reports say that by merely walking 45 minutes per day, you can maintain a healthy weight, control blood pressure and type 2 diabetes, strengthen your skeletal system and improve your coordination and balance. Walking also helps to elevate your mood.

 You can easily create a walking routine. My wife walks around the Lafayette reservoir with her friends two times a week. They don’t go around the reservoir once, but two times! I am trying to catch up with her with my walking routine, by walking to downtown Walnut Creek and back for lunch every day. If I stretch it, I can have a 45 minute round trip walk. I believe that in the future, I will be one of the attorneys at the court house who is over 80, and in great shape!

 At the Law Offices of Michael J. Young, located in Walnut Creek, Ca, we talk about the Elder Care Journey with our clients, and in our workshops. Over the years, we have helped many families, and we can help you too with long-term care planning, asset protection plans, assistance with Medi-Cal and the VA, comprehensive estate planning, wills, trusts and powers of attorney.

 Michael J. Young, Attorney at Law, is an estate planning attorney and Medi-Cal qualification attorney in Walnut Creek, CA. For additional information, please visit our website at  www.WalnutCreekElderLaw.com LawYoung1@Gmail.com Our address is at 1931 San Miguel Dr., Suite 220, Walnut Creek, CA 94596. 925-256-0298. Mr. Young serves Contra Costa and Alameda Counties, including the cities of Alamo, Walnut Creek, Concord, Danville, Pleasant Hill, Brentwood, Antioch, Clayton, etc. Mr. Young advises clients regarding Medi-Cal, Probates, Probates with Real Estate, Medi-Cal, nursing home costs, asset protection, the VA Aid and attendance pension benefit, and long term care planning. Mr. Young is an Elder Law Attorney and Probate Attorney with offices in Walnut Creek, CA. Walnut Creek Elder Law Attorney, Walnut Creek Probate Attorney. Senior Law Attorney. Walnut Creek Medi-Cal attorney. Mr. Young is certified by the VA and is a member of the National Academy of Elder Law Attorneys (NAELA).

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