I. Do a Nursing Home-Medicaid Pre-Plan–Don’t Wait for a Health Crisis. After a nursing home resident dies, the state has the right to recover any assets remaining in order to reimburse itself for Medicaid benefits paid out. Not just confusing for the families – the states Attorneys for the various States, themselves, find it challenging to interpret Estate Recovery laws. As most attorneys for the Estate Recovery Units in the US will tell you – in order to understand Estate Recovery, you need to read both the federal provisions AND the state provision side by side to make sense of the ER laws. In addition to the states recovery monies after a Medicaid recipient has died, the states are now placing liens on the Medicaid recipient’s home (lien imposition is different then enforcement). What our office would like you to take from this discussion is that you have the opportunity to do effective pre-planning to avoid liens and other Medicaid spend down penalties. Many clients, however, wait until there is a health care crisis and then the only strategies to protect their assets, their monies and their home are crisis strategies. Crisis strategies do not allow us to protect as much of your money as comprehensive pre-planning strategies. Therefore, the moral of the story is since you have the time to engage in adequate pre-planning now, please do so. II. Elder Mediation Resolves Family Conflicts: A recent article of “Planning for Elder Care” indicates that they have seen an increase in requests from care giver children for help in solving disputes with siblings with regard to care giving issues for parents. A practitioner experienced in elder mediation is a perfect choice for solving disagreements due to issues with the elderly. Mediation is a non-adversarial approach to solving disputes. Mediation is a process of bring two or more disputing parties together and having them mutually negotiate a solution to their disagreement. The mediator is not a judge and does not render decisions but is there to make sure that the combination flows freely between the disputing parties. Elder mediators are trained in the art of negotiating resolutions between elderly parents and family members. III. Seniors Beware: Part D Costs Will Raise 30 – 60 % in 2009. A recent article issued by “Justice Newsflash” that the US Medicare Part D, medication benefit program will cost seniors 31% to 60% more for drugs next year. Some insurers are even sharply increasing medication co-payments. IV. IRS Announces 2009 Tax Changes. For 2009 personal exemptions and standard deductions will rise and tax brackets will widen because of inflation adjustments the IRS announced. Absent further legislation, personal dependency exemptions will go up to $3,650. The new standard deduction is $11,400 for married couples filing a joint return and $5,700 for married individuals filing separately. V. Internet Can Stimulate Aging Brains. A recent article from “McKnights Long Term News” indicates that researchers at UCLA have discovered that there may be a benefit for web active seniors. It indicates that web activity might stimulate brain function and improve cognitive ability. Scientists believe that the constant mental stimulation is a good guard against dementia cognitive decline. But for the first time researchers are counting on web surfing alongside more traditional mental stimulus such as puzzles and word games. VI. Rules Double Maximum Loan on Reverse Mortgage Payouts. Older homeowners who need cash may be able to get more assistance through changes implemented several weeks ago in the Federal Reverse Mortgage Program. Home values of up to $417,000 will be used nation wide as a basis for establishing the size of loan availability for reverse mortgages, which is more then double the $200,160 that has been used across much of the country. Be careful however with reverse mortgage loans, they are a great method of obtaining cash flow but do nothing for protecting assets. VII. Four Tips for reducing Holiday Stress for Alzheimer’s givers. According to Kansas Elder law attorney William G Hammond, “The holiday season is the most stressful time of year for anyone caring for loved ones with Alzheimer’s. That’s because there are so many demands on caregivers’ time during this busy season that it becomes difficult, if not possible to go at it alone”.Here are a few tips that can give holiday caregivers some help in avoiding stress or at least reducing it. Tips are as follow: 1. Learn “acceptance behavior“, an Alzheimer’s caregivers’ technique, designed to remove the stress from care giver and patient. 2. Caregivers need to take care of themselves first. They need plenty of rest to have the strength to go about their care giving chores. If you can’t get rest with your loved one there consider respite care or calling in a friend or family member to give you a break. 3. Be sure all of the appropriate planning documents are in place so you are not dealing with an emergency situation on your own during the busy holiday season. 4. Look in to any available benefits that are offered publicly. The general public is often surprised to find there are at home benefits available and that there are ways to cut the cost of nursing home care if they talk to someone skilled and knowledgeable in the area. Remember that this doesn’t have to be the most stressful time of the year. Holidays can be a wonderful time to reconnect with your friends and family. That’s doubly true if you have a loved one who has Alzheimer’s. Knowledge taken from experts, doctors and elder law attorneys empowers individuals and families to calmly face the situation. For a free consultation please call our offices at 847-563-4887. P.S. Also, don’t miss our workshop: “5 Step Plan – How to Get Medicaid Coverage for your Nursing Home Care… Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register. December 10, 2008 at 4:00 pm December 17, 2008 at 6:30 pm January 13, 2009 at 4:00pm Call (847) 292 1220 to make a reservation in our training room. – You don’t want to miss this workshop!

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, Medicaid, and Nursing Home Protection

– 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 abferrarolaw@abferrarolaw.com https://abferrarolaw.com/ Note: 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. 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.

Preparing for a Productive 2009

Dear Colleague: In 2009 we want to help our advisors grow their businesses. In anticipation of our planning for what we believe will be a very productive 2009 (not withstanding the current recession), please accept our firm’s invitation to you and your colleagues for: 1. Our lunch time telephonic conference call workshops (for advisors only) updating you on the most important issues facing both our clientele and your clientele in 2009 regarding long term care planning and asset protection planning. 2. Our in-service (or in-house) workshops for you and your colleagues or clients regarding long term care and asset protection planning for both the wealthy and the elderly (two of the fastest growing populations). 3. And, of course, continuation of our well received public workshop series entitled “How to Get Medicaid Coverage for Your Nursing Home Care…Without Selling Your Home or Leaving Your Family Without a Dime.” Whether in a tight economy or a booming economy, long term care planning andasset protection planning are essential for clientele and new prospects that need your advice and services in these fundamental areas of planning. Look for our invitations right after the first of the year. Upcoming topics will include: 1. Disability and Long Term Care Planning for Nursing Home Bound Seniors and Elderly 2. Special Needs Planning for the Disabled 3. Asset Protection of your Children’s Inheritance From Divorce and Creditors 4. Medicaid Asset Protection Planning for the Nursing Home Bound Senior From our firm to yours we wish you the best of health and happiness during the holidays and look forward to a very productive and exciting 2009. ABF

The “3 Phase” Lawyers

Legal Counsel Assisting You in the 3 Phases of Your Life:

•- Maturing Years

•- Senior Years

•- Post Death Years

“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 abferrarolaw@abferrarolaw.com https://abferrarolaw.com/ Note: 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. 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.

Dear Clients and Colleagues: This Elder Law Update is to invite you to our bi-monthly workshop regarding Long Term Care and Medicaid Planning. This workshop has been a huge success and is free to you and your friends and family. Please call immediately to sign up as the workshops fill up quickly. Please see the invitation below. Bring a friend or family member. IMPORTANT UPCOMING WORKSHOP REVEALS: “How To Get Medicaid Coverage For Your Nursing Home Care… Without Selling Your Home Or Leaving Your Family Without A Dime” How to pay the cost of nursing home care is one of the greatest fears families face today. It=s a shame when you scrimp and save for years, only to find out that your life savings is at risk if your health fails. But with nursing home costs running $6,500 per month or more in our area, it=s easy to see how your entire life=s savings could be gone in a matter of months if you or your loved one needs nursing home care. Then, to make matters worse, Congress passed a harsh new law recently…and this law changes the landscape of asset protection. It used to be that you could wait until you needed nursing home care before you took steps to protect your assets. That is no longer true. Smart families are now discovering that there are still steps to take to protect their assets, but they need to Act now. A new Free informational workshop is being offered by Anthony B. Ferraro, Attorney-CPA, of The Law Offices of Anthony B. Ferraro, LLC, in Rosemont, on January 13, 2009. Here is some of what you will discover at this meeting: • How to protect your assets from nursing home costs – you may be able to save more than you would expect…even if your loved one is already in a nursing home. • One of the most important legal documents you need – and the three things it should contain. • Why traditional estate planning may not work…And the life-care planning steps you should be taking instead. • How to avoid being disqualified for Medicaid coverage by properly structuring gifts. • How to help ensure your estate provides an inheritance for your heirs…and supports your nursing-home-bound spouse. • How to qualify for “hidden” veterans benefits to help you stay at home. Your attendance at this new workshop is Free, but seating is limited. To reserve your spot, call 847-563-4887. This workshop has been extremely popular and we expect it to fill up quickly. If there is no space available by the time you call, we will put you on the waiting list and notify you when we hold the next workshop.**Special Bonus** Attendees will receive a FREE copy of our “Easy Guide Outline of Issues for Medicaid Planning and Asset Protection for Long Term Nursing Home Care”. (Limit one Outline per household). To make your reservation, call The Law Offices of Anthony B. Ferraro, LLC at 847-563-4887.Call now. These workshops fill up quickly! Please call for additional dates and times. ***Advisors please call us for the upcoming lunch teleconference regarding the 5 Mistakes that Financial Professionals Are Making about Estate and Long Term Care Plans…and What You Can Do to Avoid Them. ***Advisors if you would like a sample email to use to send to your clients regarding our workshops please contact our office and we will send one to you.

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, Medicaid, and Nursing Home Protection

– 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 abferrarolaw@abferrarolaw.com https://abferrarolaw.com/ Note: 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. 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.

What are people calling our office about in order to get solutions and peace of mind?

1. Long Term Care Planning. Long Term Care Planning is the process of solving your problems with strategies for funding of in-home care and long term nursing home care. This is done without losing your home and leaving your family without a dime. Long Term Care Planning is vital for those who cannot qualify for or afford any or enough long term care insurance. The greatest fear of most of our clients is the high cost of long term convalescent care. On average in Illinois: $6000-$8000 per month, per person. Do your Long Term Care Planning. Let’s outline your options. 2. Dying in Pain. Through discussions with health care professionals, it is becoming clear that many people’s Powers of Attorney for Health Care may require change. Specifically, people are authorizing their agents under health care powers of attorney to withdraw nutrition and hydration so that they can pass on peacefully and not prolong life at the end of their days. However, is it wise to remove hydration in all cases? In many cases, painful deaths from cancer can be avoided with morphine drip and other drugs administered through an IV. Thus, do not automatically reject nutrition and hydration in your Long Term Care Planning simply because you “don=t want to suffer hopelessly like Terry Schiavo@. Please consider whether retaining hydration for purposes of pain relief is needed in your Power of Attorney for Health Care. Don=t send mixed signals to health care providers who are authorized by law to provide for comfort care and alleviation of pain. Review your end of life wishes with legal counsel. 3. Asset Protection Planning for Your Children’s Benefit. With the economy in turmoil and stock prices reeling, it is hard to find a silver lining in these events. However, as the Wall Street Journal noted in a recent article, these troubled times offer some of the best opportunities in years to transfer wealth to younger generations. Therefore, instead of leaving assets to children directly, it may be more prudent to leave assets in a spendthrift trust. So while the children do inherit the assets, it is through the vehicle of an Asset Protection Trust. This type of discretionary trust protects the assets, at the time of inheritance, from the children=s divorcing spouses, creditors, predators, lawsuits, and bankruptcies. But you choose who remains in control. Such a trust itself may be the biggest gift you can give to your children. •4. Estate Tax Planning. President Obama=s proposed estate tax changes are likely to set the federal estate tax exemption at $3.5 million. The proposal would also potentially include changes as to how the estate tax exemption would be treated for married couples. With fiscal pressure ever present, Obama could instead let the Bush 2001 tax cuts lapse thus, allowing the federal estate tax exemption to reduce down to $1,000,000 as in 2001. Enable your estate documents to automatically adjust to changes that are looming. P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Benefits Coverage for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

February 18, 2009 at 6:30 pm

March 5, 2009 at 4:00 pm

March 19, 2009 at 6:30pm

Call (847) 292 1220 to make a reservation in our training room. •- You don’t want to miss this workshop! 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 and Nursing Home Protection – 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) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: abferrarolaw@abferrarolaw.com Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code. 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. 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 Trust Administration without the advice of competent legal counsel.

Caring for A Veteran at Home

VA Benefits May Cover the Cost

As we discussed in a previous Elder Law Update, the Veteran’s Administration provides a wonderful pension benefit for those individuals who served at least one day during a period of wartime and are not disabled due to non-service connected reasons (aging related issues, Alzheimer’s, Parkinson’s, multiple sclerosis, and/or other physical disabilities). This pension, referred to as “Aid and Attendance Allowance”, will pay not only for the long term care provided in a nursing home or assisted living facility, but will also pay for care provided to the veteran in their own home. So, for those veterans and widows (widowers) who are eligible, these benefits will allow family members to be paid for the care they are providing a loved one, so long as certain criteria are being met. The “Aid and Attendance” (A and A) benefit is available to a veteran who is disabled and requires the aid of another person to perform the personal functions required in everyday living. A veteran can show they are eligible if they have a substantial need for assistance with the activities of daily living. Such activities include bathing, dressing, meal preparation, etc. A veteran would also qualify for this pension if they can show they need the attendance of another person in order to avoid the hazards of his other daily environment. The need for assistance does not have to be permanent. A family member can provide in-home care for a veteran who is applying for aid and attendance. In order to meet the disability criteria, the care services provided by an unlicensed relative must be prescribed by a health care professional (ex., doctor, RN, LPN or licensed physical therapist) and the professional must consult with the unlicensed relative caregiver at least once a month (in person or by telephone) to monitor the regimen. In addition, there must be a valid care contract in place and the caregiver must be receiving no more than fair market value for services he or she is providing. Simplified Example: Harry Smith is a 67 year old veteran and, due to his health needs, his doctor has stated he needs assistance with bathing, meal preparation, medication administration and other activities of daily living in order to remain at home. He and his daughter, Jane agrees that she will spend 5 hours a day with Harry, 7 days a week. The fair market value for her services is $12 per hour, and they enter into a contract reflecting those terms. Harry’s income is $1,800/ month, his medications are $200/month and he is paying his daughter $1,680/month. Rather than deplete his saving of $45,000, he applies for a service pension through the VA. The VA considers the $200/month for medications and the $1,680/month he is paying to his caregiver daughter unreimbursed medical expenses and “subtracts” the amount from his income. In other words, when calculating his pension, the VA considers his income to benegative $80. He applies for benefits and is eligible for $1,520/month to help cover the cost of his prescriptions and care contract! If you or someone you know is a Veteran receiving care in their home, please encourage them to file a claim for this benefit. It would be prudent to seek the guidance of an experienced elder law attorney who is familiar with veteran’s benefits. An attorney skilled in elder law can provide a veteran and the veteran’s family with pre-filing consultations to determine the appropriate steps that must be taken and to help determine if it would be right to apply for this VA benefit. P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Benefits Coverage for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

March 19, 2009 at 6:30 PM

April 8, 2009 at 4:00 PM

April 23, 2009 at 6:30 PM

Call (847) 292 1220 to make a reservation in our training room. •- You don’t want to miss this workshop!

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 and Nursing Home Protection – 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) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: abferrarolaw@abferrarolaw.com Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code. 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. 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 Trust Administration without the advice of competent legal counsel.

The Basics of Medicaid and Long Term Care Planning or…”What the Nursing Home Says You Can and Cannot Keep” In order to understand Medicaid qualifications for Long Term Care, you first need to know how Medicaid treats your assets. Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt and the second are those assets which are non-exempt or countable. Exempt assets are those which Medicaid will not take into account (at least for the time being). While the laws in Illinois differ in some respect, generally the following assets are exempt:

• The Home, (so long as the equity is not greater than $500,000.) The home must be the principal place of residence. The nursing home resident may be required to show some “intent to return home,” even if this never actually takes place.

• Household and personal belonging, such as furniture, appliances, jewelry and clothing.

• One vehicle, there may be some limitation on value

• Prepaid funeral plans and burial plots.

• Cash value of life insurance policies, as long as the face value of all policies added together does not exceed $1,500. If it does exceed $1,500 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.

• Cash (e.g. a small checking or savings account) not to exceed $2,000 in Illinois.

These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, however, that the estate recovery unit may come back to recoup payments made to a Medicaid recipient after the death of the recipient and the recipient’s spouse if they are married. Most other assets which are not exempt (i.e. the ones not listed earlier) are countable. This includes checking accounts, savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, bonds, IRAs, pensions, second cars and so on. While there are some minor exceptions to these rules for the most part, all money and property, as well as any item that can be valued and turned into cash is a countable asset, unless it is one of those listed earlier as exempt. While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it’s safe to say that you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash, (i.e. $2,000 in Illinois). For a married couple the community spouse (i.e. the one not needing nursing home care) can receive the “Community Spouse Asset Allowance” (CSAA) which is the amount of non-exempt assets the “resident spouse” is permitted to transfer to the “community spouse” without affecting the resident spouse’s eligibility. The current CSAA is $109,560. Of course, this does not mean there are not things which can be done to protect assets beyond these levels. Instead, this issue of the Elder Law Update is designed to review the basics in a way which a caseworker from the Department of Human Services in Illinois would do so. P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Benefits Coverage for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

April 8, 2009 at 4:00 PM

April 23, 2009 at 6:30 PM

May 7, 2009 at 4:00 PM

Call (847) 292 1220 to make a reservation in our training room. •- You don’t want to miss this workshop!

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 and Nursing Home Protection – 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) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: abferrarolaw@abferrarolaw.com Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code. 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. 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 Trust Administration without the advice of competent legal counsel.

Think You Don’t Need Long Term Care Planning?

Think Again!!

1. Alzheimer’s Projections. Recently during a Senate Special Committee on Aging hearing, a couple of prominent politicians noted that there is no single effort that would do more to lower the cost of entitlement than preventing the onset of Alzheimer’s disease. They noted that Alzheimer’s will cost Medicare and Medicaid a projected $19 trillion between the years 2010 and 2050. It was noted that a five year delay of onset would save approximately $8.5 trillion over that same period. It was further noted that the human pain and financial burden of Alzheimer’s is so great and the potential breakthroughs in science are so encouraging, that a Manhattan type project approach to Alzheimer’s is justified. 2. More Coming. A respected report says that 5.3 million people in the U.S. have Alzheimer’s. An estimated 5.3 million Americans have Alzheimer’s and each patient on average costs Medicare three times more than patients without the disease. 3. Kin Using Elders’ Funds in Downturn. Recent studies show that family members are often inappropriately using an elder’s funds in economic down turn. It has been noted recently by some long term care ombudsman that children don’t have the legal authority to make some decisions for parents. Worse yet, some of the decisions that are made by children on behalf of their parents are purely economically motivated. One case was noted where a nursing home resident was blocked from receiving antibiotics because her daughter cited a “do not resuscitate” clause in her mother’s Living Will. The suspicion is that the daughter was trying to hasten her inheritance. Seniors are advised to be cautious because sometimes the power of attorney given to a family member can give an unscrupulous person license to exploit. This is not a reason not to have a power of attorney but rather should signal that caution and counseling are required in providing such power. 4. Impact of Long Term Care. A recent report indicates that nearly two-thirds of U.S. households are at risk of being unable to maintain their standards of living due to long term care costs. 5. Avoid a Crisis…Talk to Mom & Dad. It is recommended that children sit down and have a heart to heart talk with mom and dad as their capabilities for maintaining independence in their household begin to dwindle. Joint accounts are dangerous. Adding a loved one to a bank account can affect Medicaid planning, as well as expose your account to the loved one’s creditors. When a person applies for Medicaid for long term care coverage, the state looks at the applicant’s assets to see if the applicant qualifies for assistance. If your name is on a joint account and you enter a nursing home, the state will assume the assets in the account belong to you unless you can prove that you did not contribute to the account. Furthermore, if you are a joint owner of a bank account and you or the other owner transfers assets out of the account, this can be considered an improper transfer of assets for Medicaid purposes. Another problem with joint accounts is that the account can become vulnerable to the joint account owner’s creditors. Finally, be sure you can trust your joint account holder because he or she will have full access to the account. In our opinion, there are better ways to conduct estate planning and planning for disability. The power of attorney is a better approach and will provide your agent access under power of attorney to your finances in case of your disability. If you are trying to avoid probate, a trust may be better than a joint tenancy account as well. You need to discuss these issues with an elder law attorney. 6. Ways To Pay For Long Term Care. Remember the possibilities of covering the cost of long term care. The most common ways are:

1. 1. Paying out of pocket
   2. Carrying long term care insurance
   3. Qualifying for Medicaid by obtaining legal guidance and a legal spend down of your assets. Strict compliance with state laws is necessary.
   4. Lastly, getting a reverse mortgage.

Note: for Veterans who qualify for nursing home care in a Vet Nursing Home, the closest facility of which we are aware is in Manteno, Illinois. 7. Is It Time to Update Estate Plans? Because of the uncertainty regarding estate plans and laws that may shift treatment, formula clauses in Wills and Trusts can become problematic. The current Federal Estate Tax exemption amount of $3,500,000 creates this situation, but there are a number of solutions to this problem. One is to put the full exemption amount into a family trust while making sure that your spouse is a major beneficiary of that trust and can receive distributions liberally and for broad purposes. 8. Watch Your CDs. Not all Certificates of Deposit are the same. Recently, the SEC accused a former Texas financier of fraud. The allegations are that the scheme revolved, in large part, around the sale of suspicious high yielding CDs. The CDs were not insured by the FDIC, resulting in a lot of people being unable to protect their life savings. Some CDs are covered by the FDIC, which currently offers insurance of up to $250,000 per person, per bank. Additional coverage can be obtained depending on how you hold the CD. 9. What you Need to Know About Estate Planning. You need to have a Will and maybe a Trust. You also need either a standard, enhanced, or comprehensive Power of Attorney for Property for Long Term Care Planning. You need to have Living Wills and advanced medical directives to avoid a situation like Terry Schiavo. Special Needs Trusts are often essential when there are family members who are physically or mentally challenged. The estate tax right now is as favorable as it has been in a long while. Each U.S. citizen is entitled to up to $3.5 million of assets before they have to pay estate tax. For a couple, that adds up to $7 million,if planned properly. Please remember that the federal exemption amount under current law is scheduled to go back to $1 million in 2011. 10. Housing Bubble Impacts Elderly. Because of the recent housing slump, many elderly are not obtaining the needed support and care which they would be afforded by moving into retirement communities or assisted living facilities. Many are effectively stranded in their own homes. Without the ability to sell their houses or condominiums, many cannot afford to buy into retirement homes that require substantial down payments just to move in. So they are taking themselves off of waiting lists and staying at home. The inability to sell their home or condo is isolating a lot of the elderly. At present count, there are 4.2 million unsold homes in the United States, but it is unknown how many of those are occupied by people 65 years or older. P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Benefits Coverage for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

April 23, 2009 at 6:30 PM

May 7, 2009 at 4:00 PM

May 18, 2009 at 6:30 PM

Call (847) 292 1220 to make a reservation in our training room. – You don’t want to miss this workshop! 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 and Nursing Home Protection – 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) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: abferraro@abferrarolaw.com Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code. 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 Trust Administration without the advice of competent legal counsel.

“Change You Had Better Believe In” “The only constant is change, inevitable change, continuing change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is but the world as it will be.” No, this was not President Obama stating this, but rather this quote is attributed toIsaac Asimov who died in 1992. This quote illustrates that as we live longer, as our family changes and our needs change, as the law changes, we too must take action to change. All of our clients are now living in the present and the present has storm clouds on the horizon. This requires our clients to think again. The documents that you created for estate planning purposes when you were 65 may no longer serve the same purpose and worse yet could disadvantageous to you as you move on to possible long-term care. SAMPLE CASE STUDY: A woman came into our office and her documents were created roughly 10 years ago by another attorney. Her husband has recently died. The couple back in 1999 created two revocable living trusts, one for each of them. This was a good plan at the time and made perfect sense. The goal at the time was to shelter their estate from estate taxes and avoid probate. At that time, their combined estate was $1 million but the estate tax laws only allowed them to shelter $600,000. So instead of paying estate taxes, they prepared a trust designed to allow each them to shelter $600,000 so that no estate taxes will be paid. This was marvelous planning at that time, but now… 10 years later, the woman’s husband is deceased, and the surviving widow is now 9 years older and has chronic health issues. Also, there have been tremendous changes in the estate tax laws since she originally did her documents. Each U.S. citizen can now shelter $3.5 million in assets before any estate taxes are due. So the same $1 million in assets are sheltered from estate taxes but over half of those assets (approximately $500,000) are in her husband’s trust. The husband’s trust restricts how wife can use these assets! She cannot change the beneficiaries and the trust not only does not serve her purpose but is now becoming a problem as we look at planning for long term care. The woman’s Powers of Attorney are no longer adequate. They do not contain all of the tools that we routinely insert in the Powers of Attorney in order to make them effective for any situation involving Long Term Care. The Question for the Immediate Future: Have you planned for the issues and costs that will arise in connection with long-term care, either in your own home or at a skilled facility? Please recall that the greatest threat to most Americans is the cost on long-term convalescent care. Therefore, we urge you to get an update of your estate plan and take into consideration elder law issues and long-term care issues. The Medicaid laws have changed in many states and will shortly be changing in Illinois. It is best to obtain all of the tools necessary through an updated estate plan, long-term care plan and updated Power of Attorney while you are healthy and can deal with these issues. Our firm wants you to have the most updated and well written documents available so that you and your family can tackle every situation that will arise as more changes come. And come they will! Never doubt it! This is a Positive Message I hope you will take this communication as a positive message. In this update we are trying to inform you and the professionals that serve you that there are many steps that can be taken to protect you and your family as well as your assets. If we provide for change we can create a better future for yourselves with more control and thereby provide you with greater peace of mind. You have our best wishes! P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Financial Assistance for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

May 18, 2009 at 6:30 PM

June 11, 2009 at 4:00 PM

June 23, 2009 at 6:30 PM

July 9, 2009 at 4:00 PM

Call (847) 292 1220 to make a reservation in our training room. – You don’t want to miss this workshop!

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 and Nursing Home Protection

– 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) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: abferraro@abferrarolaw.com Much of what’s in this update is based on the work of a prominent Florida colleague. Any tax advice contained in this communication was not intended to be used, and cannot be used, by you (or any other taxpayer) to avoid penalties under the Internal Revenue Code. 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. 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 Trust Administration without the advice of competent legal counsel.

Financial Advisor’s Can Instill Hope and Consumer Confidence.

There is Still A Lot to Protect Out There.

Why not Grow Your Business?

At The Law Offices of Anthony B. Ferraro, LLC, we have taken a number of steps over the years to try to help Financial Advisors round out and deliver services to their clientele. In our opinion, the most important thing you can do in this depressed economy, in our humble opinion, is to create a very proactive message and let your clients know “We are out here, and we can take steps to protect your assets.” Financial advisors can take the very deliberate step of helping clients protect their assets through the usage of several simple techniques that I will talk about in this update. Remember, these strategies are designed to provide peace of mind to clients who feel that everything else is working against them. As an advisor, I would offer my clients the following:

1. Trust Protector for Existing Trusts. You may want to have all clients consider adding a Trust Protector to their existing trust or trusts. This Trust Protector can do a couple of different things. First, in connection with irrevocable trusts, the Trust Protector can provide discretionary asset distribution that the Trustmaker himself cannot undertake. Second, the Trust Protector can make changes to the trust provisions that, again, the Trustmaker himself cannot make. This creates flexibility and peace of mind for clients.
2. Dynasty Trust Planning. This is not just for the Rockefeller’s and Carnegie’s. Let’s assume you have a client that desires to deliver an estate of $300,000, $500,000 or $700,000 to their children. The problem is that the client doesn’t trust their daughter-in-law or son-in-law, or for that matter, they may not trust their child. A Dynasty Trust is a way of holding back a trust distribution at the death of the parents. This enables the monies to be available for the children or grandchildren, but does not distribute outright all at one time. This gives parents the peace of mind of knowing that everything that they strived and worked for to accumulate over the years will be available for their children and not squandered shortly after their deaths. This type of planning may also afford you the opportunity to obtain an introduction to the next generation or two of your client’s family.
3. Grantor-Type Trust. Explain to clients that grantor-type trusts are advantageous because they will not result in having to file an additional tax return during the life of the Trustmaker (Grantor). Also explain that a grantor trust is something advantageous and that can be toggled on and toggled off at different points during their life such as for example in connection with planning for veterans benefits. This is another widely used tool offering protection for clients at a time when all clients are looking for ideas regarding protection.
4. Multiple Trusts. Sometimes a trust is a great idea. Sometimes that idea no longer works. It is a shame to terminate a trust simply because one idea does not work. Perhaps having several trusts with slightly different objectives can avoid the need to totally eliminate otherwise perfectly valid trusts.
5. Trust as a Beneficiary. Either in connection with beneficiary designation assets or tax-qualified assets such as IRAs or 401(k)s, a lot of work needs to be done in connection with beneficiary designations. It really does not matter what is written into wills or trusts if the beneficiary designations are inconsistent with the client’s objectives. You have a lot work to do as an advisor in connection with beneficiary designations, so let your clients know that you care enough to have reviewed such designations and will even go through the expense of preparing new ones, if necessary.
6. Second Marriages. These are very common in our society. A second marriage raises a whole host of issues on which the client needs counseling. In order to provide protection to the client, the issues associated with second marriage need to be understood and discussed with clients. This is fertile ground for advisors to be adding value to clients and how they perceive your services. Please give consideration to second marriage planning as a special niche.

The common theme throughout the six items described above is that they all deal with long-term care planning. Long-term care planning is not just protection from a nursing home, as we have written about in recent Elder Law Updates. Long-term care planning involves the long-term, and in the long-term there are all of the issues described above that need to be taken into consideration. Again, we are here to help you communicate with your clients so you can grow your business. We hope you will continue to serve clients that need hope and ideas in tough economic times. Let us know if you think that this type of message to your clients would be something of value to them. Don’t hesitate to share with them this update or invite them to one of our free workshops that we offer. Please recall that we offer 2 workshops: 1) the “Elder Care Journey” and 2) the “New Estate Planning Essentials,” both of which I think can spread the message of hope and protection that clients are so desperate for. P.S. Also, don’t miss our workshop: “The Elder Care Journey – How to Get Financial Assistance for your Nursing Home Care…Without Selling your Home or Leaving your Family Without a Dime” set for the following dates. Please contact our office at (847) 563-4887 to register.

May 18, 2009 at 6:30 PM

June 11, 2009 at 4:00 PM

June 23, 2009 at 6:30 PM

July 9, 2009 at 4:00 PM

Call (847) 563-4887 to make a reservation in our training room.

You don’t want to miss this workshop!

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 and Nursing Home Protection

– 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) 563-4887 FAX (847) 292-1221 Website: https://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. 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.

Pending Medicaid Law Changes Pose Risk to Nursing Homes and Residents In prior issues, we wrote about the new pending Medicaid law changes (the Deficit Reduction Act of 2005) as they relate to gifts or asset transfers. Illinois has not yet adopted the new law but may have to. Under the current Illinois law, a gift creates a period of ineligibility beginning on the date of the transfer. Thus, a $30,000 gift in Illinois would create a 5 month penalty from the date the gift was made if the nursing home monthly cost is, for example, $6,000 a month. So, if the gift was made 12 months ago, the penalty would have already expired. Under the pending law, for gifts made after February 8, 2006, the penalty period will not begin until the person is in a nursing home and has spent down to $2,000 in Illinois!! Only at that time will the penalty period start. In other words, if the same $30,000 gift was made after February 8, 2006 but the new law is finally adopted in Illinois, then, the person making the gift must spend his or her assets down to $2,000 and be in a nursing home. Only at that time would the penalty period begin tolling. In that case, the gifted funds would have to then be used for the cost of care to get through the penalty period. But what if the funds are no longer available…for instance if they were paid for college tuition or given to charity or to an individual who simply no longer has them? What will happen then? This is a major problem and one that nursing homes will have to face in the coming months. Prior to this law, minor asset transfers would not cause major problems for the nursing homes, since the penalties would have expired by the time the applicant was spent down. Under the new law, however, every transaction will have to be scrutinized. Even small gifts or transfers will cause penalty period which won’t even being to expire until the person is otherwise spent down. It has been common practice to have the nursing home help the potential Medicaid applicant apply in the past. This was probably not a huge risk under the previous laws. The new laws, however, will make this very risky from both a legal and cash flow perspectives. That’s because it will now be much more important to verify exactly what has been spent and given away, as the law will have no “grace period” for asset transfers. The following example, assuming the new law has passed, will suffice to show where the problem lies: Mrs. Jones is a resident of Shady Acres Nursing Home in Cook County, Illinois. Let’s say that, a few months from now, she has spent down and is applying for Medicaid. But in March of 2010, assuming the new law was passed; let’s say she has made a gift to her granddaughter for tuition at Rockhurst College. Assume that the amount of the tuition payment was $6,000. Under the old law that would have meant there would be a penalty of 1 month (i.e. the $6,000 gift divided by $6,000, assuming 6,000 is the average cost of a nursing home in Illinois.) Under the old law there would have been a 1 month penalty from the date of the transfer. Under the new laws, however, the penalty won’t start until her assets are spent down to $2,000. Now if the social worker at the nursing home fills out the application and doesn’t realize how the new law will affect these situations, then the application will be filed in anticipation of the receipt of Medicaid benefits. Imagine the shock of the nursing home administrator when he or she later finds out (usually some 30 to 45 days after filing the application) that the application was correctly denied according to the new rules now in effect. What will the nursing home do in this case? Well, their recourse is to file a request for a hardship waiver. The new rule provides for this. The problem is that, in the past, the granting of hardship waivers have been few and far between. What’s more…the hardship is for the resident in that he or she will be denied needed care if the application is approved. The hardship is not, however, for the nursing home to help their cash flow. You can imagine the issue this will cause in the coming months when nursing homes begin to deal with the documentation required for their residents who may or may not have the ability to reconstruct their financial records to the extent called for by the new law. In addition, the granting of hardship waivers is a process that has been very tedious and will certainly serve to slow down the approval of the Medicaid application. All of these reasons have led some commentators to call the new law “The Nursing Home Bankruptcy Act of 2006.” While we’re not sure it’s that dire…we are sure that it will cause challenges fornursing homes and their residents. That’s also why Medicaid applications should no longer be viewed as simple. The services of an elder law attorney who thoroughly understands the new rules regarding the Medicaid changes is recommended. P.S. Also, don’t miss our workshop: “The Elder Care Journey” set for the following dates. Please contact our office at (847) 563-4887 to register.

May 18, 2009 at 6:30 PM

June 11, 2009 at 4:00 PM

June 23, 2009 at 6:30 PM

July 9, 2009 at 4:00 PM

Call (847) 563-4887 to make a reservation in our training room.

You don’t want to miss this workshop!

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 and Nursing Home Protection – 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) 563-4887 FAX (847) 292-1221 Website: https://abferrarolaw.com/ Email: abferraro@abferrarolaw.com 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. 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.