Alzheimer's Care, Asset Protection, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Guardianships, Medicaid and Paying for Nursing Home Care, Nursing Home Admissions, Nursing Home Contracts, Probate, Estate, and Trust Administration, senior estate planning

Navigating the Long-Term Care Journey with Parents and Seniors

April 29, 2019

- Alzheimer's Care, Asset Protection, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Guardianships, Medicaid and Paying for Nursing Home Care, Nursing Home Admissions, Nursing Home Contracts, Probate, Estate, and Trust Administration, senior estate planning

Do you have powers of attorney in place?

I know it sounds simplistic, and we have all heard this before, but perhaps the most important document that you can have upon beginning the long term care journey is the power of attorney. This is the first matter we suggest to our clients in the Chicago and Park Ridge metropolitan areas who are on the long term care journey.

Why is the power of attorney so important?

Because a power of attorney is a legal document where one person called the “principal” legally authorizes another person called the “agent” to act on their behalf with regard to either financial or health related decisions.

Without these powers of attorney in place, no one has the legal authority to act on another’s behalf and therefore we may have to resort to a court guardianship proceeding where a person appointed by the court, usually a family member, called the “guardian” has the power to make personal decisions for another usually called the “ward”. Guardianship’s are expensive, require the testimony of physicians, the appointment of a Guardian “ad litem” to investigate and protect the ward’s interest, and many other formalities have to be observed, all in the interests of protecting the ward.

These court efforts are all well and good, but if you can avoid all of this by simply having created valid powers of attorney for property and finance and healthcare matters (this may not be possible in all cases), you can streamline matters during your long-term care journey, later on.

How many different types of powers of attorney are there?

In Illinois we have two types of powers of attorney one for health and one for property (and financial matters). Sometimes these documents are called statutory powers of attorney and at other times these documents are called durable powers of attorney. The difference lies in the type of form selected to draft the power of attorney. Most of the time we recommend you stick to the statutory form power of attorney because this is the one the doctors, other health providers, nursing homes, assisted living facilities banks and financial institutions most readily recognize.

Can I create my own powers of attorney?

Yes you can, however they will not contain the necessary language that Elder Law Attorneys put into such documents such as: the power to make gifts to family members and others in order to qualify for Medicaid eligibility, the power to remove and add assets to a trust, and the power to apply for public benefits and then appeal any decision on public benefits. Unfortunately your standard power of attorney forms do not have these provisions built into them. Worse yet, if these additional powers are not built into the power of attorney, then you cannot engage in these powers under the power of attorney. They must be expressly listed in the power of attorney.

What’s the take away?

Get powers of attorney in place immediately. You could wait until later when you I need them, however if you lose the cognitive capacity to legally and ethically execute documents like these, then you may never be able to have these types of documents and hence we are left pursuing an expensive and complicated guardianship process.

Get your powers of attorney in place now.

How old should you be when you start executing powers of attorney?

18 years of age. Most people don’t realize that at 18 they cannot make either financial or medical decisions for their children. But that is in fact the law, because at 18 children have reached the age of majority and without legal authorization nobody can make decisions for them as they are now adults.

Ask your adult children to have their powers of attorney done now, as well.

Asset Protection, Blog, Chicago, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Medicaid spend down planning, senior estate planning, Uncategorized

Seniors and Asset Protection Trusts for Long-Term Care

By Anthony Ferraro on

June 9, 2016

- Asset Protection, Blog, Chicago, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Medicaid spend down planning, senior estate planning, Uncategorized

Do you have the right kind of trust?

Many of our clients come into our office with trusts. Most of the time these trusts are what are called revocable living trusts (RLTs). These types of trusts offer no asset protection even though seniors are often ready to conclude that they have protected their assets with such a trust.

Only certain types of irrevocable living trusts (IRTs) provide asset protection for long-term care. Irrevocable trusts, if drafted properly, may be considered a complete gift by the senior to the beneficiaries of the IRT, and thus out of the senior’s estate permanently. If, however, the senior has any access to principal in the IRT, then the IRT will not provide any asset protection from the costs of long-term care.

It is possible to allow seniors to maintain an income interest in the IRT, as opposed to an interest in the principal of the IRT, but this creates a more complicated audit process if and when the senior ever needs to look to the Medicaid program to pay for the costs of long-term care.

About 66% of all US citizens will be looking to the Medicaid program if long-term care is needed. Therefore, it is increasingly important to properly draft an IRT and also understand the time of the creation and funding of the IRT so that the creation of the trust will not interfere with a possible application for Medicaid to cover the costs of long-term care.

Seniors also have to keep in mind that there are significant issues in the drafting of an asset protection trust that deal with the following:

Income tax issues
Gift tax issues
Estate tax issues
Medicaid eligibility issues
Issues about the right beneficiaries, receiving the right assets, at the right time
Trustee issues
Using the IRT in a period of health for the senior versus a health crisis for the senior
Issues regarding selecting the right assets to place in the IRT

So you see, asset protection trusts are essential for many seniors, because they may be the only way assets can be protected, not only from the cost of long-term care but also the predators and creditors of their beneficiaries. But the drafting of an IRT is much more complex than the drafting of an RLT and seniors need to make sure that they retain an elder law attorney to maximize the chances that their trust is the right trust for them at that point in their life.

Blog, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Uncategorized

General Medicaid Eligibility Requirements for Long-Term Care

By Anthony Ferraro on

April 25, 2016

- Blog, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Uncategorized

Applying for Medicaid for long-term care in a nursing home is a complicated matter. This article will limit itself to describing the basic eligibility requirements. The eligibility requirements break down into four categories:

Medical Eligibility

This requires a demonstration of meeting the determination of need score, also known as the DON score, which is applied to decide whether or not someone is ‘needy’ enough, from a care standpoint, to be eligible to qualify for long-term care in a nursing home. This assessment may be administered by Catholic charities, nursing homes, and many other organizations.

Income Eligibility

The income eligibility requirement is to ensure that the amount of income that a person has does not exceed the private cost of care. For example, if the private cost of care in a nursing home is $8,000.00 a month and your income is also $8,000.00 a month, you have no need for Medicaid because your income will pay the monthly nursing home costs. Alas, for most middle-class Americans, there is not enough monthly income to meet an $8,000.00 a month nursing home bill, and therefore Medicaid eligibility is a necessity. Please note, income eligibility varies depending on whether or not someone is single or married.

Resource Eligibility

Resource eligibility requires an examination of all of the assets that you have had over the last five years, but focuses on what there is at the time of the application. At that point, Medicaid will break assets down between exempt assets and countable assets. Exempt assets are those that applicants are allowed to keep, such as the $30.00 a month resource allowance, personal belongings, life insurance that has no cash surrender value, life insurance that has a face value of no more than $1,500.00, automobile, etc. On the other hand, countable assets are everything else that is considered to be nonexempt. However there is a limitation on the amount of countable assets one is allowed to have—that limit is $2,000.00 a month for a single individual, and $109,564.00 for a married couple, where one spouse is in a nursing home and the other spouse can continue to remain in the community. Please note, there are many exceptions to this general rule and it’s important that you find a law firm, like ours, that is well-versed in these exceptions in order to preserve as many assets as you can.

Penalty Eligibility

Penalty ineligibility arises from what are called ‘uncompensated transfers’ by the Medicaid applicant. Uncompensated transfers are those where the individual made a transfer but did not receive a transfer of equal value in return. Gifts are the simplest example of an uncompensated transfer – the applicant gave something away but did not get something back in return. Also, there are penalties associated with uncompensated transfers, and the penalties are not imposed, or do not begin, until the applicant is in a nursing home or at least five years have passed since the uncompensated transfer. Medicaid audits all transactions during the prior five year period, thus there is a five-year audit that is quite substantial. If all of this seems confusing, it’s because it is. Qualifying for Medicaid for long-term care in order to cover nursing home costs is very complex and requires the expertise of an elder law attorney who focusing focuses on Medicaid asset protection planning and eligibility.

Picking a Strategy – In Order to Protect Against the Costs of Long-Term Care

By Anthony Ferraro on

January 14, 2016

- Alzheimer's Care, Asset Protection, Blog, Chicago, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Medicaid spend down planning, senior estate planning

Installment 8 of 10

In Our Series:

“Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection through Medicaid in Illinois, for Middle Class Seniors and Boomers”

Picking a strategy is not something one can easily do on their own. Selecting strategies in order to minimize the cost of long-term care requires an understanding of both the requirements of sophisticated estate planning and access to governmental benefits. However in order to provide an overview of how strategies are selected, you must understand that strategies will vary depending on whether or not the senior is in one of the following phases:

Preplanning Mode
Wait-and-See Mode
Crisis Mode

Preplanning can be done when there is no threat of a long-term care stay that is imminent. Wait-and-see mode exists when there is a diagnosis but the senior will not be leaving home in the near term, and crisis mode is when the senior is in a nursing home or soon to be in a nursing home. In preplanning, because time is on our side, we can engage in such strategies as looking for long-term care insurance to cover all, or part of, the cost of long-term care. Perhaps a long-term irrevocable trust that will put assets outside of the estate may be useful. Sometimes purchasing certain types of assets that are exempt non-countable is advisable. In wait-and-see mode, because there is often a diagnosis, good powers of attorney for health and property and the preparation of wills and trusts that bypass the ill senior are essential. Also, changing the beneficiary designations on various assets so that they do not pass automatically on the death of the healthy spouse to the ill spouse is another consideration. It may be even possible, at this point, for the healthy spouse to obtain long-term care insurance. In a crisis mode, it is essential that the ill senior be made eligible for Medicaid in order to cut the costs of long-term care. The only way a senior can be eligible is to be an asset level of no more than $2000, exempting non-countable assets like prepaid burial arrangements, personal effects, very small life insurance policies, and limited other resources. All other assets must be converted to a non-countable status. This is not always possible, so quite often it is necessary in crisis mode to transfer assets from the senior. You must understand that this will result in a period of ineligibility for the senior. However, with the assistance of competent elder law counsel who specializes in Medicaid asset protection planning, it is possible to transfer assets while at the same time retaining enough assets in a form that will allow the penalty period to be paid down and the transferred assets to be protected. Selecting a strategy for asset protection planning in long-term care is not an easy matter, but with the proper planning our office does it all the time. It is essential that Medicaid rules be followed strictly. This sounds like a heavy task, and it is, but the alternative of not selecting a strategy to protect assets from long-term care costs results in the impoverishment of seniors at a time in their life when they should not be destitute for such simple quality of life items, like hearing aids, eyeglasses, podiatry care, medications and certain therapies not covered by Medicaid. Plan ahead, it’s your quality of life that is at stake in your senior years.

Why an Inventory of Your Assets is Important for Long-Term Care Planning Purposes

By Anthony Ferraro on

November 10, 2015

- Asset Protection, Blog, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Uncategorized

Installment 6 of 10

In Our Series:

“Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection through Medicaid in Illinois, for Middle Class Seniors and Boomers”

Why create an inventory of your assets for long-term care planning? Often we go to the doctor thinking I feel fine. However as you are aware the doctor doesn’t take your word for it, rather the doctor will do a blood workup to see if he agrees with your assessment that you are fine. Likewise, the equivalent of a blood workup for legal and financial advisors professionals is a thorough inventory. You see, some think that by listing assets on a piece of paper that they have created an adequate inventory of what their assets are. This list certainly is a starting point for the creation of an inventory, but at this point is far from complete. And, like a doctor, your legal and financial professionals will not take your word for it when you say that you have an inventory, rather they are going to establish expectations for what that inventory should look like and what sort of information it must contain, so that they can agree with your assessment of exactly what your assets are and what can be done with them for various legal and financial reasons. A mere list of assets will not reflect all of the information that’s is needed for various professionals to make the judgments on how to best advise you. The more detail you can give a professional the more likely they will be able to interpret the positioning and nature of you assets, in order to give you guidance on planning strategies. How to create a proper inventory: In order to create a proper inventory of assets the following parameters should be kept in mind:

Ownership of assets: Husband, Wife, Joint, or Other
Types of assets: cash on hand, bank accounts, certificates of deposit, money market funds, brokerage accounts, stocks, government bonds, tax-free bonds, mutual funds, individual retirement accounts (IRAs), Roth IRAs, 401(k)s, keel plans, other tax qualified plans, immediate annuities, tax-deferred annuities, life insurance policies, real estate (primary residence, other real estate), passive real estate investments (such as limited partnerships, timeshares), automobiles, interests in closely held businesses, sole proprietorships, personal and miscellaneous assets of any value, miscellaneous intangible assets, etc.
Debts: mortgages on real estate, credit cards, credit lines, etc.
Beneficiary designation for each applicable asset: primary beneficiary, secondary or contingent beneficiary

There are many inventory forms that are readily available by commercial producers. Our office has its own type of form that we prefer to use. Conclusion While the steps we describe above may seem rudimentary and basic to a lot of our readers, I can assure you that most of the people that come into our office with an inventory of their assets really have no idea what they own, what the nature of the asset is, and what the flow of the asset may be in the event of either disability resulting in long-term care or death. It is for this reason that we have taken the time to suggest what an inventory can look like and for what purposes it can be used. A good idea would be to start with some sort of inventory, place this in a three ring binder and document every asset that you list on this inventory with a copy of a statement or evidence of the ownership of the asset so that in the future, your heirs or professional advisors can use this compilation or inventory of assets for your benefit and the benefit of your loved ones.

Creating a Blueprint – For Asset Protection from Long Term Care

By Anthony Ferraro on

October 12, 2015

- Alzheimer's Care, Asset Protection, Blog, Chicago, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburban Elder Law Attorney, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Guardianships, Medicaid and Paying for Nursing Home Care, Medicaid spend down planning, Nursing Home Admissions, Nursing Home Contracts, senior estate planning, Uncategorized

Installment 5 of 10

In Our Series:

“Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection through Medicaid in Illinois, for Middle Class Seniors and Boomers”

Why create a Blueprint (Medicaid asset protection letter) for your asset protection planning? Just like in building a home, you don’t hire a contractor to start slapping bricks together until you have decided on the number of rooms, type of rooms, location of the rooms, etc. Likewise, many are quick to suggest creating a will, trust, powers of attorney, perhaps an irrevocable trust, or an annuity, etc. This can be very costly and foolish. How can you create a plan consisting of various documents that are supposed to protect you without a design in mind? Mindlessly putting together layers of documents accomplishes nothing except large bills. Before our clients create any legal documents we suggest to them that they do a blueprint, which is in effect a Medicaid asset protection letter. In that letter we outline the following:

Planning strategies that can be done in preplanning mode, or crisis mode, depending on where you are in the long term care journey.
Planning strategies available for single individuals, or the community spouse when an ill spouse is going into a nursing home.
An outline of the current status of the law as it relates to Medicaid eligibility.
Finally, planning recommendations that are broken down into things that you must do immediately and things that you may be able to defer until later.

Below are some examples of our final recommendations in our Blueprint: Immediate Action

Creation of powers of attorney for healthcare and powers of attorney for property. However, our powers of attorney have many more powers and are more substantial than the average power of attorney that most people have.
Creating wills and trusts that have special needs trusts built into them for a surviving spouse or a minor or adult disabled child. This takes advantage of certain relief that Congress intentionally placed into the Medicaid laws.

Deferred Actions

The purchase of a Medicaid compliant annuity or a Medicaid compliant promissory note.
Our office files a Medicaid application.

Conclusion As you can see from the above, there are strategies that we rely on that result in the savings of a lot of assets for middle class seniors and boomers who are going into long-term care. However, because these measures are complicated, it makes sense to have a blueprint laid out describing them in detail using your asset and income numbers before actually engaging in these actions. We want our clients to go into strategies and solutions with eyes wide open. The only way that can be accomplished in most cases is to create blueprint that lays out all of the Medicaid asset protection planning strategies in the form of a letter that the client can study, and ask questions about. We usually resolve all of the questions the client may have at our subsequent “Design Meeting.” Make sure you look before you leap.

When to Revise Old Wills and Trusts and How?

By Anthony Ferraro on

September 14, 2015

- Blog, Chicago, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Medicaid and Paying for Nursing Home Care, Medicaid spend down planning, senior estate planning

Installment 4 of 10

In Our Series: “Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection Through Medicaid in Illinois, for Middle Class Seniors and Boomers”

In this part of our ongoing series of how to deal with the looming crisis associated with long-term care costs for the middle class, I would like to talk about when it may be necessary to revise wills and trusts. Also, what should newly restated revised wills and trusts look like? First of all, we should remember that during our maturing years, most people, especially those with children, will prepare wills and trusts that deal with what happens to their assets upon death. This is a very understandable and laudable goal, especially for those people that are afraid of leaving small children behind. However, as we go beyond our maturing years and start focusing on our senior years, the focus is no longer “what happens when we die,” the focus now changes to “what happens if I don’t die and I need long-term care for a long period of time.” When that becomes the concern of someone going into their senior years, wills and trusts must be modified in few different ways.

For single persons, there needs to be the ability to withdraw assets from a revocable living trust, or various types of asset management accounts, like pay on death accounts at a bank, transfer on death accounts at a brokerage firm, and IRA accounts. The reason for this additional withdrawal power is so assets can be withdrawn from these repositories and used elsewhere in accordance with planning techniques designed to preserve assets so that eligibility for Medicaid long-term care benefits, such as nursing home cost coverage, can be achieved. This would be a satisfactory result.

In the case of married individuals, it becomes very important to be able to not only withdraw assets from various places, but also redirect assets in the event of the death of one spouse. Specifically, if we have two spouses, but one is in a nursing home, and the other spouse, who is otherwise healthy, should die unexpectedly, the assets of the deceased spouse will be transferred to the surviving spouse and those assets could be subject to a complete Medicaid required spend down for nursing home costs. This unfortunate circumstance can be avoided if the couple restates their wills and trusts. Rather than transfer assets to the surviving spouse directly, assets can be transferred to certain special needs trusts that are created for the surviving spouse who is residing in a nursing home. This type of special transfer will allow the surviving spouse to continue to receive benefits from Medicaid for their long-term care, and at the same time enjoy the inheritance left behind by the predeceasing spouse. This would also be a satisfactory result.

These types of more favorable results don’t happen automatically. They require very careful drafting by elder law attorneys who have familiarity with the Medicaid statutes and regulations. Careful drafting can allow people who need Medicaid for long-term care to, some extent, retain assets that can act as their lifetime “rainy day fund.” Again, this is planning that is done not for wealthy people, but rather is done for middle-class individuals who have few remaining assets and would like to preserve them to elevate the quality of their life should they be in long-term or nursing home care for an extended period of time. Remember Medicaid does not cover the cost of the television, hearing aids, eyeglasses, certain podiatry care and other essentials that add to a senior’s quality of life. That is why the planning for the creation of a “rainy day fund” for this type of circumstance is so crucial. Caution: This type of planning must be done while you are able to do it. It cannot be done once you have diminished mental capacity to the extent of not being able to make financial decisions for yourself all. Start your planning now!

Guardianship – The Last Resort

By Anthony Ferraro on

August 12, 2015

- Alzheimer's Care, Blog, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Illinois Hospice Care, Chicago Suburban Elder Law Attormey, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Guardianships, Probate, Estate, and Trust Administration, senior estate planning, Uncategorized

Installment 3 of 10

In Our Series: “Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection Through Medicaid in Illinois, for Middle Class Seniors and Boomers”

Many people ask, “What is guardianship in the state of Illinois?” Simply put, guardianship is the process of applying to a court to be able to legally assist an individual over the age of 18, if the person has a disability. A disabled person, for purposes of guardianship laws, is someone who cannot make basic life decisions or manage their own property or money. Due to the participation of the court system and the attorneys’ fees involved, this process is an expensive proposition and should be avoided at all costs, if possible. Guardianship is avoided by using other methods of surrogate decision making for disabled individuals such as powers of attorney, trusts, the Health Care Surrogate Act, and other related surrogate roles. Unfortunately, many people wait too long and do not have the authority to execute powers of attorney, trusts, etc. because they are incapacitated. In such cases, we are grateful that the guardianship court exists. Guardianship is achieved to the following general steps:

Filing of a petition for appointment of a guardian to be determined at a court hearing
Issuance of service of summons;
Appointment of a guardian and guardian ad litem, an unrelated individual who will be the eyes and ears of the judge in understanding the circumstances;
Obtaining the necessary physician’s report establishing that the individual does not have decision-making authority, and;
Giving notice to all spouses, children, siblings and agents under power of attorney so that they can concur or object with the guardianship itself.

The benefits of guardianship are that the day-to-day management of financial affairs can be handled by the guardian of the estate, and the day-to-day management of health matters can be accomplished by the guardian of the person. Sometimes the same individual is the guardian of both the estate and the person and sometimes different persons are appointed to these roles because of their different skill sets. Guardianship can consist of both:

Uncontested guardianships: when everybody agrees with the process of the person selected, or
Contested guardianships: when the Ward (the person that is the subject matter of the guardianship process) or someone known to the Ward may object to the guardianship, in which case the guardianship process becomes what is called a contested guardianship (which results in expensive litigation)

The guardianship process is a last resort when people have not taken time to do the appropriate estate planning. I recommend that people get powers of attorney for property and powers of attorney for healthcare in place at age 18, in order to avoid guardianship in the event they become incapacitated. Remember, at age 18, you are an emancipated adult and you can make decisions for yourself and nobody else can make decisions for you, unless you authorize them to do so. It is for this reason we recommend powers of attorney whenever we can. Don’t allow your personal and health matters to fall into guardianship. We are grateful that guardianship exists for tragic situations where proper planning has not taken place. But, now that you know that you can avoid guardianship through proper estate planning, prudence would indicate that you take the steps to do such planning.

When to Contact a Physician

By Anthony Ferraro on

July 27, 2015

- Blog, Chicago area, Chicago Elder Law, Chicago Elder law attorney, Chicago Suburban Elder Law Attormey, Chicago Suburbs, Chicagoland Elder Law, Elder Law Articles, Eldercare Attorney, Estate Planning, Estate Planning Attorney, Guardianships, senior estate planning

Installment 2 of 10

In Our Series: “Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection Through Medicaid in Illinois, for Middle Class Seniors and Boomers”

In this part of our 10 installment series I would like to discuss when it is necessary to invoke the services of a physician in the estate planning, long-term care planning and eldercare journey. Obviously if there are immediate health concerns a physician should be contacted straightaway, before legal counsel is sought. However, there are circumstances where, in the process of delivering not only medical services, but also in the process of offering legal services, that we discover that the involvement of a physician is necessary. This generally arises in cases where clients come in to execute powers of attorney for property and powers of attorney for healthcare. In cases such as this, generally speaking, most clients will be able to walk into my office, introduce themselves to me explain to me what they wish to request from our law firm regarding services and engage us for those services. However there are instances in dealing with aging seniors and disabled adults where it becomes clear to me, as a lawyer, that I cannot be sure that the prospective client has full mental capacity. Sometimes, diminished capacity manifests itself by being unable to express your thoughts, comprehend thoughts that are presented, or formulate judgments based on facts that are presented. As a lawyer, it is my duty to suggest that the client be evaluated to determine the level of their capacity when I suspect that a potential client may not have the ability to comprehend what I am recommending to them. This is unfortunate, because sometimes the physician will give an opinion that indicates that the potential client no longer has the ability to make sound decisions or comprehend matters set before them. When that happens, I, as a lawyer, cannot present a document, such as powers of attorney, to such a client for signature, because I may be asking them to sign something they do not understand— which is prohibited under the professional rules of conduct for lawyers. The client’s inability to sign these documents will often result in the failure to do further planning and may create the need to seek a guardianship through the court process so somebody can act as a surrogate decision-maker for this person who has now lost their cognitive capacity. Thus, it is my recommendation that you seek counsel as early as you can in your life to obtain and put in place documents that will reflect your choice of surrogate decision-maker so that if you can no longer make decisions for yourself, your choice will prevail. Unfortunately, many of our clients do not come into our office and request powers of attorney and other advanced directives, so that later on they are left to request the court system to assist them in surrogate decision matters through a full-blown guardianship proceeding. This is very expensive, time-consuming and impersonal. Conclusion Don’t leave your decision-making authority to the court system unless it’s an absolute last resort, because this is a very expensive and impersonal process. You are better off putting in place powers of attorney for healthcare, powers of attorney for property and other advanced directives that will allow the person you choose to seamlessly proceed to make decisions for you pursuant to the guidelines you have set forth. Don’t wait until it’s too late. Coming up in our future blogs in this series:

Revise Powers of Attorney – See Previous Article
Contact a Physician – See Above
Seek Guardianship
Revise Old Wills and Trusts
Create a Blueprint
Inventory Assets
Seek Placement in a Facility
Select a Strategy
Prepare and File the Medicaid Application
Prepare for the Post Application Audit

Powers of Attorney – Your “Lifeblood” (Financially and Legally Speaking)

By Anthony Ferraro on

June 17, 2015

Installment 1 of 10

In Our Series: “Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection Through Medicaid in Illinois, for Middle Class Seniors and Boomers”

Problem: We had six families of aging seniors come in to our office this week all of which had powers of attorney that amounted to nothing more than a simple document that would be much more appropriate for clients who are 25 years old. This is a devastating problem that I can correct if the aging Senior has the requisite mental capacity to execute new documents. If, however, the Senior has diminished capacity, then we are left with these almost worthless powers of attorney that do not permit any repositioning of assets in order to properly plan for long-term care, and a path to Medicaid to fund such long-term care. Solution: Revise Any Powers of Attorney and Healthcare That You Currently Have, and While You Can. Powers of Attorney for Property: Most of the powers of attorney that we see in our office, while valid, are inadequate to allow the necessary repositioning and reclassification of assets to gain eligibility to Medicaid, VA, and other governmental benefits. Your power of attorney for property must permit, at a minimum, the following powers: the transfer of assets to family members and nonfamily members, with or without compensation being received in exchange; the transfer of the personal residence; the creation, funding, and revision of revocable and irrevocable trusts; the authority to apply for various governmental benefits, including Medicare, Medicaid, VA benefits and other benefits; and the ability to change beneficiary designations on various assets. This is only a small list of must-haves in your power of attorney for property. To give you an idea of the importance of this, we attach an additional five pages of these types of powers so that every client we have has a full toolbox of resources available to carry them through their maturing years and senior years. These tools are most often needed in the senior years when long-term care planning is a necessity so as to avoid having our seniors rendered penniless due to the devastating costs of long-term care. Be careful about selecting an effective date for your power of attorney. Remember you can sign a power of attorney today that either (1) takes effect today, or (2) takes effect upon a future event, such as when your doctor determines you are unable to make financial decisions for yourself. The approach you select will depend on your particular circumstances and your family composition. Remember, anyone can create a document, but correct elder law counseling about that document will help you achieve the best results. Contact your Chicago elder law attorney or Illinois elder law attorney today to discuss this. Powers of Attorney for Healthcare: In January 2015, the State of Illinois legislature enacted a new power of attorney for healthcare. However, some bar associations have found this version of the power of attorney to be ineffective in five or six important areas. As of this moment, these defects are being cured through pending legislation in the Illinois General assembly. The healthcare power of attorney is your authority to express your wishes about your care and your end-of-life wishes. Please keep your eyes peeled to this blog for an update on the changes that are forthcoming to make this important document better in the future. Summary: I hope this gives you a simplistic view about the importance of powers of attorney in the state of Illinois. These documents are critical to enable your agent to use Medicaid asset protection strategies to qualify you for Illinois Medicaid should you need institutionalized care. Remember, most of our clients are trying to preserve some assets for a “rainy day fund” in their senior years, and they are entitled to do so as a matter of exercising their civil rights so long as they do this legally and ethically. This planning is not done by wealthy individuals, as those persons can pay their way through any costs associated with long-term care. Rather, this planning is best done by middle class individuals who have worked to accumulate some savings, only to find that the cost of long-term care will make their life’s work disappear in no time. Our goal, as asset protection attorneys for the middle class, is to allow seniors to gain access to the Medicaid program, to use some of their own assets for their cost of long-term care, but also to enable them to preserve some of their assets, so that in their senior years, after a lifetime of work, they are entitled to some dignity and some resources to make a life in a nursing home more livable. Coming up in our future blogs in this series:

Revise Powers of Attorney – See Above
Contact a Physician
Seek Guardianship
Revise Old Wills and Trusts
Create a Blueprint
Inventory Assets
Seek Placement in a Facility
Select a Strategy
Prepare and File the Medicaid Application
Prepare for the Post Application Audit