A New Illinois Bill To Protect Seniors From Financial Elder Abuse Please note that Governor Quinn signed a bill that was designed to protect seniors from financial elder abuse.  The bill will be handled with the involvement of the Illinois Department of Aging and Illinois Department of Financial Professional Regulation which will establish standards and trainings for employees at financial institutions to keep on the lookout for financial exploitation of the elderly.  The new law is requiring financial institutions across the state to become more vigilant and on the lookout for matters pertaining to financial elder abuse of our senior citizens.  The bill requires reporting when abuse is suspected.  This is a step in the right direction.  Let’s hope that the implementation will allow this to be a useful tool in protecting the elderly.  Continuing Care Retirement Communities (CCRC) The Senate recently held hearings on matters pertaining to Continuing Care Retirement Communities (CCRCs).  The investigation dealt with matters pertaining to the current market conditions and some of the financial risk associated with residents in CCRCs.  Recently there have been some failures in CCRCs.  This places the financial investment and also the continuity of care for the resident seniors at risk.  The CCRCs are a good concept, but be sure you review the contract for your care thoroughly and do your due diligence early on. NEW FREE E-COURSES We invite you to sign up for one of our three FREE e-courses: Estate Plan Essentials Guide, Veteran’s Benefit Report, and Medicaid Nursing Home Guide.  After signing up for an e-course, a series of letters will be emailed to you which discuss our areas of practices and services we provide clients.  http://www.estateplanessentialsguide.com/ http://www.veteransbenefitreport.com/ http://www.medicaidnursinghomeguide.com/ Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection  –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice. Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com  Email:  abferraro@abferrarolaw.com.   NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service. The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.

New Rules Are Coming to Illinois A Widow or Widower’s Worst Case Scenario The state of Illinois is about to propose certain rules that will penalize and place at risk our senior citizens who need or who have spouses who require nursing home stays.  Quite often, one spouse promises the other that “under no circumstances will you ever go into a nursing home”. The unfortunate reality is that many people will not only spend tremendous amounts of money and other assets in providing for the long-term care of their spouse, but will later go on to face their own challenges in the aging process. I am talking about clients that come into our office that have been frugal their entire lives, paid their bills, paid off their home, put the kids through college and now depend on their Social Security checks and modest pension to get through life.  The surviving spouse often travels on the elder care journey alone, depleted of energy, and often depleted of financial resources. This very same surviving spouse who cared for their ill spouse during their years of long-term care, must now become impoverished to the point of a mere $2000 or less in total assets and the misery of a $30 a month personal needs allowance before the State of Illinois or federal government provides any assistance for their long-term care.  This is becoming a modern day living nightmare for many of our clients. We can assist you in avoiding this nightmare. Worst Case Scenario The new rules that may be considered by the state of Illinois will create new ineligibility periods.  The penalty periods could last for more than 5 years after the date of gift!  5 years is a long time in the life of one of our senior citizens.  This would apply to any senior who has generously gifted their money to loved ones who need care or help in these difficult times.  To avoid falling into the potential ineligibility trap, it is our strong recommendation that you schedule an appointment for consultation about long-term care proactive planning or long-term care crisis planning. Nursing care costs are currently ranging anywhere from $6,000-$8,000 per month in our region. We will show you how our clients are currently adopting sound legal strategies such as “5 Year Advance Planning” to achieve peace of mind and asset preservation from the persistent threat of nursing care costs.  VA benefits for our veteran clients and their surviving spouses are also a resource to help defray costs. Please call Lori or Jennifer in our office at 847-292-1220 to set up a time for a consultation. This is about fighting for you to obtain fairness that will enable you to preserve your dignity and savings during a time of frailty and need.  You need to join the fight and let us help you. I am serving as a chairman on a subcommittee for a task force dubbed “The Task Force for Senior Fairness” that is comprised of a group of highly respected elder law attorneys throughout the state.  We along with others in the long term care community are advocating for fairness to seniors in the application of these new rules.  Change is coming, that is certain.  We can however together reduce the unintended consequences and undue harshness of the rules that are being proposed. I will be discussing these new rules and additional elder law topics that are critical to seniors, their loved ones, caregivers, and advisors at my upcoming workshops that are resuming next month. The workshops are called our Elder Law Basics Workshops. There are still a few spots available, call Jennifer or Lori at (847)292-1220 to register. Elder Law Basics Workshops  Tue 8/3/10, 6:00-7:00pm 10 Things Seniors Must Know In Planning For Their Care and Death!  Thu 8/4/10, 4:00-5:00pm Get The Real Scoop On Medicaid Eligibility For Nursing Home Care and VA Benefits Upcoming Workshop: “A Trust Is NOT A Trust, By Any Other Name…” or “What is a Trust, Anyway?” Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection  –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice. Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com  Email:  abferraro@abferrarolaw.com.  

Dear Colleague: In our recent initial consultations we have been seeing a pattern in our intake process.  Prior to meeting us, clients often do not understand where long term care planning fits into the estate planning process they have been engaged in during prior years. To that end, we are enclosing what we refer to in our office as The Gap Illustration Tool.  This tool is designed to point out that there still remains a planning area that is incomplete. That planning area is what we refer to as the GAP in estate planning. The GAP represents the senior years that exist between maturing years and post death years. Hopefully, The Gap Illustration Tool will allow you to visually communicate to your clients in your consultations with them where their planning remains incomplete. This is especially true of clients who have done estate planning.  They believe that they have completed the wills, trusts, and powers of attorney and, therefore, have nothing more left to do.  This, as you know, is erroneous.  There is still a substantial amount of planning that must be done after estate planning is done and prior to time of death.  This type of planning is called long term care planning.  As we have discussed in prior memos, its preferable for clients to do long term care planning in the preplanning mode when there is plenty of time to plan.  Long term care planning in the crisis mode is also possible, but results in less options for protection of assets and continuity of care.  If you have any questions about the usage of this important tool, please let us know. PS: Please be aware this is also a useful tool that has worked well for us in educating our clients and we hope it will have the same positive impact for you.   Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection  –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice. Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com  Email:  abferraro@abferrarolaw.com.   To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice.

HOW NURSING HOMES AND ASSISTED LIVING FACILITIES CAN AVOID LARGE UNCOLLECTIBLE RESIDENT RECEIVABLES There has been a common misconception that when a resident engages in Medicaid planning, it is not in the best interest of a nursing home or assisted living facility. What has become clear to us in our practice, however, is that many nursing homes and assisted living facilities now recognize that, without proper Medicaid planning, many of their residents who are at spend down levels will not automatically be qualified for Medicaid. This has the disastrous effect of leaving the nursing home, in many cases, with large uncollectible Accounts Receivable. If the nursing home’s resident is unable to pay and cannot qualify for Medicaid, the nursing home has a very difficult, if not impossible task, of collecting the outstanding bill. Here are a couple of typical scenarios that have been reported to us by some of our colleagues: Case #1: A colleague of mine called us for assistance in connection with a case, where they received a call from a nursing home regarding one of its residents who had a nursing home bill that was over $30,000 in arrears. Apparently, the nursing home had been told several months ago that its resident had spent down all of her assets to the statutory $2,000 and had applied for Medicaid. However, the Medicaid application was denied and the resident had no money to pay the $30,000 outstanding bill. The nursing home then learned that the application was denied because the resident owned a piece of land that she viewed as worthless because she had been trying to sell it for over the last two years without success. Apparently, the resident had been listing the property for sale for two years but didn’t receive any offers and, thus, in her mind, the land was worthless. However, as we were able to demonstrate by a review of the Illinois Medicaid rules, the property was appraised at $30,000 and, therefore, was considered a countable asset, even though the resident was unable to sell it. The issue was taken to a fair hearing because the nursing home felt it was unfair to the resident who was trying to do everything possible to sell land; however, the resident died in the interim and the estate did not want to appeal. The nursing home was stuck with a $30,000 bill UNPAID. With proper Medicaid planning, the resident could have made an uncompensated transfer to a relative while she still had countable assets in her possession for spend down. Then she could have waited out the ineligibility period. With proper Medicaid planning, the resident would not have applied prior to transferring the land and would have qualified upon application. The resident would never have incurred such a large bill and the nursing home would not now have such a large uncollectible Accounts Receivable. Case #2: In this case, a colleague called us to explain that he had received a call from one of the children of an Illinois nursing home resident that was denied Medicaid. Apparently, the mother had spent down her assets to less than the $2,000 statutory amount and could not understand why the application had not been approved. By the time the child had received a denial from the state of Illinois, the nursing home bills had grown to over $14,000. The problem in this case was that, although the mother had less than $2,000 in her bank account, the mother also had an insurance policy with a face value of $3,000 that had cash value of $2,500. She thought that this policy would be exempt. However, under Illinois law, an individual having life insurance with a face value of more than $1,500 will be required to consider the cash value of the of the policy as a countable asset. Had the proper Medicaid planning been done in advance, the life insurance policy would have been cashed out and the proceeds would have been funded into a prepaid funeral arrangement or otherwise spent down before the application for Medicaid was submitted. Again, the nursing home would not have been stuck with such a large unpaid bill. Contact Mr. Ferraro to set up an IN-HOUSE Instructional Workshop at 847-292-1220.     Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice.

Don’t Go Broke in a Nursing Home: Top 7 Secrets for Surviving a Nursing Home Stay Armed with these 7 secrets, you’ll be in a great position to protect your hard earned savings while gaining the peace of mind that comes with knowing the future of yourself and your loved ones is secure. 1. How to protect the healthy spouse.  Because they don’t know the rules, many couples become excessively impoverished by the first spouse’s long-term care costs.  We can show you how the rules allow you to actually spend money to make the healthy spouse’s life better.  The rules are complex. 2. Why giving your assets to your kids could leave you broke, sick, and on the street.  Make sure you do it right – because doing it wrong can have terrible consequences. 3. How to save money by transforming your assets.  Medicaid counts your money as either available for care or exempt.  You can convert available assets into exempt money (that YOU get to keep)! 4. Medicaid application timing is critical.  It may be hard to believe, but allowing a nursing home case worker to help you fill out a simple Medicaid application can cause you to lose thousands of dollars, and create a Medicaid penalty because you applied too early.  You must know when you should apply for Medicaid.  5. How to avoid cruel and unusual punishment.  The Deficit Reduction Act of 2005 (DRA) creates a Medicaid ineligibility penalty for seniors who give away their money to children, churches or charities within 5 years of applying for Medicaid.  Learn how to avoid becoming broke, sick, and on the street because you gave away assets in the wrong way.  Illinois will adopt DRA soon. 6. How to know if an annuity is really Medicaid proof.  Many financial advisors tout annuities as being safe from Medicaid spend-down.  The truth is not so simple – yes, annuities can be wonderful tools, but you have to select the correct annuity.  The Medicaid annuity rules are critical to obtaining the right type of annuity for Medicaid.  7.  Learn how Veterans and spouses can receive hard-to-understand benefits for in home or nursing home care.  A wartime veteran and spouse can receive up to $2,000 for in-home and/or nursing home medical care.  Finally: New Health Legislation That Impacts Long-Term Care We have read parts of the new health care legislation. The health care legislation, while having good points and bad points, has set forth a structure for improving the continuity of care in the healthcare system for our seniors. These changes also impact the country’s long-term care system which, before this legislation, has never been addressed head-on. What the new legislation does is pass some measures that could create meaningful long-term care reform. Many of our clients have expressed a desire for community-based long-term care. Most of our clients prefer alternatives to nursing home placement such as senior centers, transportation services, and home healthcare. The new bill addresses some of these issues. The new law creates a public and voluntary long-term care insurance program known as the Community Living Assistance Services and Supports program. This is known as CLASS for short. Individuals would be eligible to receive up to $50 a day after a five-year period of contributing to the plan. This $50 a day could be applied toward the cost of nursing home care, caregivers support, adult day care or residential care. While $50 a day is fairly small in view of the fact that the average stay in a nursing home costs about $200 a day, at least it is a start. This provision would allow all working adults over 18 to be able to enroll in this program, thus creating a large risk pool. In order to create an expansion of home and community-based services to avoid placement in a nursing home, that legislation creates a program called Community First Choice. This provides federal dollars for such care. There is also increased funding for organizations that help seniors and their families navigate the complex web of long-term care. Also included in the new legislation are anti-impoverishment provisions that prevent a healthy spouse from being forced to spend all of the couple’s assets in order to gain access to government funded community-based services.  Prior to this legislation, this type of impoverishment protection for community spouses was only available when the ill spouse needed nursing home care. Now the ill spouse can receive community-based care and still obtain the same protections for the healthy spouse. Another little-known provision of the act provides federal money for enhanced geriatric training for primary care providers and other health professionals. While this new legislation is just a start, at least matters of long-term care are finally being addressed. More needs to be done, though. Hopefully this legislation will transform our health and long-term care system into one that works better than what we presently have. We ask that all of our clients hope along with us, and keep reading our updates. Our job as Long-Term Care Planning Attorneys is to increase the quality of life of our clients, not just to figure out who gets what after you pass away. If you should have any questions about these materials and how they relate to your specific situation, please don’t hesitate to give me a call at 847-292-1220. Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice.

   Frequently Asked Questions Can Outright Financial Gifts to Children Jeopardize Eligibility For Government Benefits? THE SHORT ANSWER IS YES, IF NOT HANDLED CORRECTLY!! HYPOTHETICAL SITUATION: Background After her 73 year old husband, Harold, suffers a paralyzing stroke, Mildred and her daughter, Joan, consult an elder law attorney.  Dark circles have formed under Mildred’s eyes.  Her hair is disheveled.  Joan holds her mother’s hand. “The doctor says Harold needs long term care in a nursing home,” Mildred says.  “I have some money in savings, but not enough.  I don’t want to lose my house and all our hard-earned money.  I don’t know what to do.” Joan has heard about Medicaid benefits for nursing homes, but doesn’t want her mother left destitute in order for her father Harold to qualify for them.  Joan wants to ensure that her father’s medical needs are met, but she also wants to preserve Mildred’s assets for her mother.  The Family’s Questions “Can’t Mom just give her money to me as a gift?” she asks.  “Can’t she give away $13,000 a year?  I could keep the money for her so she doesn’t lose it when Dad applies for Medicaid.” The Correct Response Joan has confused general estate and tax laws with the issue of asset transfers and Medicaid eligibility.  A “gift” to a child in this case while maybe not taxable, is actually a “transfer” and Medicaid has very specific rules about transfers. At the time Harold applies for Medicaid, the state will “look back” 3 years to see if any transfers have been made.  The state won’t let you just give away your money or your property to qualify for Medicaid.  Any gifts or transfers for less than fair market value which are uncovered in the look back period will cause a delay in Harold’s eligibility for Medicaid. In Illinois, for example, every $6,000 given away during the 3 years prior to a Medicaid application can create a 30 day period of ineligibility.   So, for example, if Harold and Mildred give their daughter $30,000, Harold will be ineligible for Illinois Medicaid for 5 months (30,000 divided by 6,000).  What if Joans lose the money (gambling, drugs, lawsuit, divorce etc.)?  Instead, there are a number of safer steps that Harold and Mildred can take, ranging from proper gifting strategies using trusts (that protect the assets from the kids’ creditors), to personal care contracts (i.e. paying their adult children for care received), to raising the Community Spouse Resource Allowance(CSRA).  All these strategies and more will be discussed in upcoming issues of our Elder Law Update. PS:       Mr. Ferraro will be holding a FREE workshop titled “Don’t Go Broke in a Nursing Home” on March 11^th & 18^th, 11am and 6pm on both days! Call our office at 847-292-1220 and ask for Jennifer to make your reservation TODAY!     Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com  Email:  abferraro@abferrarolaw.com To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice.

  As a courtesy to our readership we are posting some sample frequently asked questions that comprise part of our “Consumer’s Guide to Planning for Long Term Care.”  We think these questions are relevant for you to examine when considering long term care and all that is related to it.  We hope this cuts away a lot of the rhetoric.  We’re also including a courtesy copy of one of our firm’s illustrative planning tools that helps us clarify the need for Long Term Care Planning for our clients.  1. What are the greatest threats to most people’s money and home today? A: Taxes, Inflation, and Costs of Long Term Care 2. What is long term care? A: Long term care is the assistance you may need to go about everyday activities.  It is not acute medical care.  Most long term care services do not require doctors or nurses, although they often are provided by skilled and trained caregivers.  It is the care you may need as a result of an accident, chronic illness, disability or advancing age.  3. What is Elder Law? A: The area of legal practices that deals with the issues of aging. 4. What is the “Gap” in most people’s planning? A: Failure to plan for long term care.  See The Gap Illustration Tool attached to this update. 5. What is Long Term Care Planning? A: Planning for the efficient use of long term care insurance (if available), your own assets and public benefits to obtain seamless delivery of care as you age.  We help your loved ones get the nursing home care they deserve while legally and ethically protecting your family’s assets.  6. What is the difference between Estate Planning v. Long Term Care Planning? A: Estate Planning is the process of enabling your estate (the things you own) to transfer to the next generation.  Long Term Care Planning is the process of making sure you use your assets and public benefits efficiently so that (a) you have continuity in your care that you might need due to chronic illness, disability or advancing age, so that you, your spouse, and your loved ones are cared for and (b) as a byproduct, there remains a legacy consisting of assets that you own that can be passed on to the next generation. P.S.  –  Mr. Ferraro will be holding two FREE workshops called “Don’t Go Broke In A Nursing Home” on TUESDAY, FEBRUARY 23 at 11am and 6pm.  Call us at 847-292-1220 or email us at Jennifer@abferrarolaw.com to make your reservations!  Bring a friend, advisor or client!     Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This communication is advertising material.  This is not intended to be, and cannot be, used as legal advice. NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service. The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.    

Compare the Old Trust vs. the Modern Trust: Old Trust = Probate Avoidance + Estate Tax Savings Modern Trust = Probate Avoidance + Estate Tax Savings + Asset Protection! Dear Clients, Friends and Colleagues: Old Trusts Many of you have prudently chosen to create a revocable living trust during your lifetime.  Please recall that the motivations for creating trusts were primarily: 1.         Avoidance of estate tax; and 2.         Avoidance of probate. These objectives for your trust, while still valid, may not be a primary concern any longer for the following reasons: First, estate taxes no longer impact as many Americans because, as of this writing, there is no federal estate tax in 2010.  But in 2011 the estate tax will return with a tax free exemption amount of $1 million.  At the time your trust was created, the estate tax exemption could have been as low as $600,000.  Thus, the need for “A/B trusts,” as they were called, to minimize estate taxes may no longer be necessary for many Americans.  Thus, a simpler, less complex trust may be available to you. Second, probate can be easily avoided with upgraded trusts that I will discuss below.  Also, many of our clients have the bulk of their retirement assets held in accounts such as IRAs and 401(k)s, which, if handled properly, avoid probate by themselves. Modern Trusts Can Provide for Asset Protection from New Challenges   You should consider upgrading you revocable living trust and creating a more modern asset protection  trust.  The reasons for using an asset protection type trust are due to new challenges and the needs that have emerged over time:

1. To  protect your assets from a spend down due to the costs of your long-term care;
2.  To protect your trust assets from the creditors, predators and divorcing spouses of your  children after you die; and

  3.    To do the ROTH IRA Conversions with the modern IRA trust protection planning. Modern Trusts Can Provide for New Income Tax Basis Requirements From a tax standpoint, the good news is that for the year 2010, as of this writing, there is no federal estate tax for decedents dying in 2010; the bad news is that there is no “step-up” in income tax basis for decedent’s dying in 2010.  There are, however, certain allowable limited  basis adjustments, but wills and trusts must contain certain provisions to allow an executor to take advantage of these allowable adjustments, which could result in  income tax savings.  You should at least review your plan to be sure that your priorities (i.e., asset protection or tax savings, etc.) are reflected in it. Modern Trusts Can Provide for Compliance with the NEW ILLINOIS ESTATE TAX Requirements Also, while the federal estate tax is eliminated for the year 2010, the Illinois estate tax exemption is capped at $2 million.  This is sometimes referred to as Illinois estate tax “decoupling”. Illinois has joined 11 other states in enacting a state-qualified terminable interest property (QTIP) election, which is different from the federal QTIP election of I.R.C. Section 2044. Now, a well drafted estate plan allows a married couple to leverage the estate tax exemption at both the federal level and the state level.  We can demonstrate this for you with a simple illustration in my office. The Illinois QTIP election will require that estate documents only fund the non-marital trust with the lesser of the federal or state exemption, with the balance passing to 2 QTIP-type marital trusts. Thus, while the new Illinois law provides options for dealing with Illinois estate tax decoupling, the QTIP legislation still mandates the need to review and possibly change the funding clause in your current estate planning documents. Conclusion As long-term care planning attorneys, we are experienced with matters of elder law, estate planning, estate tax planning, and asset protection planning, as well as with disability, Public Benefits and Veterans Benefits planning.  We can update your revocable living trust and possibly create one or more additional trusts that protect your assets from the new challenges and new legal requirements described above. It is important that you note that this more modern planning involves trusts and trust asset funding that adds increased value to what you may have done previously to avoid probate and reduce federal income and estate taxes.  Contact us at 847-292-1220 and ask for Lori to set up a consultation appointment for a review of your trusts or to discuss how creating trusts may benefit you and your family.  P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home”. Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life: –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764 Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service. The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.  

We want to wish everyone a happy holiday and a safe, healthy and prosperous new year. Look for our newest Elder Law Update the first week of January.  Long Term Care Planning Attorneys The “3 Phase” Lawyers Legal Counsel Assisting You in the 3 Phases of Your Life –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration “Educate to Motivate” Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018  PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.    

Gentlemen and Ladies: I hope you enjoy this Elder Law Update.  This update is designed to bring you current on a potpourri of topics and issues that we have been keeping an eye on for the last month of November 2009.  We wish to thank our readership and colleagues for their confidence in us and for providing us with referrals over the last year.  We will be sure to maintain your confidence and respect in the forthcoming year. 1.         No Increases!  For the first time since 1989 the CMS (The Centers for Medicare and Medicaid Services) indicated there would be no increase in the community spouse resource allowance (CSRA) and the maximum monthly needs allowance for 2010.  Thereby, they will remain at the same levels they were for 2009, which are $109,560 for assets and $2,739 for income, respectively. The take-away:  Remember these numbers— we will continue to use them in our 2010 calculations for long-term care planning. 2.         Estate tax update.  There is some buzz in the Capitol indicating that there will be a bill introduced that will make the 2009 estate tax rules ($3.5 million estate tax exemption) permanent.  No word on whether or not this will pass.  The take-away: Estate tax planning as of this moment still has that topsy turvey quality because we don’t know ultimately what the estate tax exemption may be.  3.         Long-Term Care in the Health Legislation.  We welcome the presence of long-term care provisions in the health care reform legislation.  Both the House and Senate have provisions that will protect nursing home residents and other long-term care recipients from abuses and provide families of nursing home residents more information about the nursing home that their loved one may be in.  Both bills require background checks for nursing home staff and more public disclosure will be required for those who own and operate facilities. The Senate bill has a specific provision that is designed to end “Medicaid’s institutional bias”.  This “bias” refers to the fact that many elderly and disabled individuals have been unable to obtain assistance through the Medicaid program, unless in a nursing home environment.  Such bill would provide more federal money for community service and support of Medicaid recipients in their home.  There is a general push in the Senate bill to make long-term care services available in the communities, as well as in institutions.  The take-away: While the public option has taken most of the air out of the health care debate, it is comforting to know that at least there are some beginning discussions about long-term care in both the House and Senate bills.  Neither may go far enough at this point, but at least the nation is finally engaging in a dialogue about long-term care.  The Class Act feature of one of the bills provides that, after paying a modest monthly premium for five years, citizens could be covered under the program to be eligible to receive benefits equal to about $50 per day for a range of services that would help them stay in their homes.  $50 per day is inadequate in the minds of most long-term care planning attorneys, but at least it’s a start. 4.         Annuities Worked in This Case.  In a recent Third Court of Appeals decision, the CA3 affirmed the U.S. District Court Ruling allowing a community spouse to purchase a DRA (Deficit Reduction Act) compliant annuity to protect savings from the cost of her husband’s nursing home care. The take-away:  It appears that, at least in the state of Pennsylvania a community spouse may purchase a DRA compliant annuity of unlimited value to reposition excess assets into a protected income stream for Medicaid purposes.  Annuities are not good in all cases, but can work well in some cases.  5.         Home Care.  No surprise, a recent article indicates that the elderly are more likely to be happy when they are receiving informal care in the home from a family member than when receiving formal care in a skilled care facility from health professionals.  The take-away:  I think we will see a shift in long-term care planning in the future that will provide in home care through the expansion of the Medicaid and Medicare programs to allow for such care.  Hopefully, it will result in less cost and more satisfaction for the public at large. Note: There will be circumstances in which various needy long-term care recipients will have to be in a skilled care facility.  But for those cases that are not so extreme, home care and the funding of in home care is a welcome alternative if it can be implemented and funded.  6.         Long-Term Care Insurance Update.  A recent report indicates that Americans are purchasing more affordable long-term care insurance.  The take-away: We continue to recommend to all our clients and prospective clients that they purchase long-term care insurance.  Not everybody will qualify, but everybody should at least try to purchase it.  The IRS also recently reviewed its limits for deductibility of long-term care insurance premiums thereby providing a tax incentive for the purchase of long-term care insurance.  Keep in mind that the average cost of a nursing home is approaching on a national basis approximately $80,000 per year.  When compared to long-term care insurance premiums of $2,000 to $7,000, for example, long-term care insurance, comparatively speaking, looks like a smart purchase. 7.         All Veterans Should Know About This.  Let’s discuss the Veteran’s Pension Benefit (this is commonly referred to Aid and Attendance).  It is estimated by some that approximately 11.5 million seniors, which is 33% of all people over 65, could qualify for pension or death pension by meeting the tests set out by the VA Administration for war veterans or their surviving spouses.  The bad news is that not many people are aware of this benefit or know how to apply for it.  Only 4.7 percent of individuals that could qualify for this benefit are actually seeking it.  What is this benefit?  These are disability income programs available for veterans or their single surviving spouses.  The veteran has to have served on active duty at least 90 days, with one of those days being during a period of war.  Service in combat is not required; only that the veteran was in the service during war time and was honorably discharged.  There is an additional benefit called Compensation.  Compensation is only for veterans who are disabled because of injury or illness incurred while on active duty.  A veteran cannot receive pension and compensation at the same.  The decision has to be made as to which benefit is better for the war veteran.  In order for the veteran to receive a pension benefit there is a medical needs test and also an income test, as well as an asset test.  Suffice it to say, it is complex calculation but it is worth pursuing for most vets. The take-away:  Advise every vet that you represent to look into the availability of this pension benefit.  Not every vet will qualify because they may have too much in the way of income or assets.  As a general rule, household assets cannot exceed $80,000, but there is no limit on how the vet can transfer these assets in order to qualify for the benefit.  This obviously needs to be done very carefully with a long-term care planning attorney that understands the VA rules on Aid and Attendance.  Spread the word to all the vets that you know so that they can look into this for themselves.  P.S.      Also, don’t miss our new workshop: “Don’t Go Broke in a Nursing Home” and “The Elder Care Journey”. Long Term Care Planning Attorneys The “3 Phase” Lawyers   Legal Counsel Assisting You in the 3 Phases of Your Life:   –           Maturing Years – Will, Trust, Taxes, and Asset Protection –           Senior Years – Long Term Care: Pre-Planning and Crisis Planning –           Post Death Years – Estate, Probate, and Trust Administration     “Educate to Motivate”   Anthony B. Ferraro Attorney-CPA The Law Offices of Anthony B. Ferraro, LLC The Estate & Trust, Elder and Asset Protection Law Firm Columbia Centre I 5600 N. River Road, Suite 764  Rosemont, IL 60018 PH (847) 292-1220 FAX (847) 292-1221 Website:  abferrarolaw.com Email:  abferraro@abferrarolaw.com NOTE: The information contained in this message is confidential and may be protected by the attorney-client privilege and/or the work product doctrine.  If you have received this electronic message in error, please reply to the sender and destroy this message. Pursuant to federal regulations imposed on practitioners who render tax advice (“Circular 230”), we are required to advise you that any tax advice contained herein is not intended or written to be used for the purpose of avoiding tax penalties that may be imposed by the Internal Revenue Service.   The Illinois rules of Professional Conduct require attorneys to identify unsolicited communications to prospective clients as Advertising Material.  If the context requires, please consider this letter and the enclosed literature to be Advertising Materials. To unsubscribe, please reply to this email.  In the subject line, please write your name and the word “unsubscribe.”  If you are responding on someone else’s behalf, please also include the email address that our message was sent to.  Thank you. This document is for discussion purposes only and is not intended to be, nor should it be, considered as legal advice.  You should never attempt Medicaid planning, Estate Planning, Probate, or Estate and Trust Administration without the advice of competent legal counsel.