1. Not Covered? A U.S. Court of Appeals recently ruled that an assisted living facility was not considered to be covered under a long term care insurance policy. Stay tuned for more discussion on this.
2. Build a Strong Foundation for Care Planning. Special estate planning documents need to be put into place for the aging population. Durable powers of attorney need to be created, and they should contain provisions that enable the agent to take steps to protect assets and qualify the client for programs such as Medicaid. The preparation of a revocable living trust and advanced healthcare directives are necessary. Irrevocable trusts are sometimes useful in protecting assets. Finally, a letter of wishes from the elderly describing wishes for care addressed to caregivers and family can be useful. This kind of letter can go into matters such as activities, types of foods and entertainment that the elderly wishes to have if under the care of caregivers in or out of a nursing home.
3. Examination of Care Needs. In doing estate planning for clients that need long term care several areas need to be examined:
A. The type of care – will it be home care? Will it be nursing home care? Assisted living?
B. Paying for the care – an examination has to be made regarding the role of long term care insurance and paying as you go. Also looking into home equity loans and reverse mortgages, as well as life care and personal care contracts with family and friends, are all part of the mix.
C. Lastly, looking for public benefits and community services is mandatory.
4. Homecare Helps. Recent study suggests Medicaid sponsored homecare reduces nursing home use. A recent study indicates that when seniors have the ability to access homecare, their nursing home stays are more limited to cases of acute care and are also for a shorter duration at the end of life.
5. Capital Gains News. New law helps surviving spouses. A new tax law provides that surviving spouses have two years to sell their house and receive the full $500,000 capital gains exclusion that married couples are entitled to instead of the $250,000 exclusion that is available to singles.
6. Medicare Advocacy. Some attorneys are incorporating Medicare advocacy into their practice. Medicare advocacy can begin as soon as a client is admitted to the hospital. The attorney can be sure that the client is properly admitted under Medicaid Part A. If not, they can appeal the decision. Hospital discharge can also be subject to controversy. This can be appealed.
Next you have availability of coverage for home healthcare under Part B. You can argue for hospice care under Part A. Finally, you have the Medicare prescriptiondrug benefit under Part D.
7. Capacity Issues. Attorneys are often required to look into legal capacity of elderly clients. Mental capacity is broadly defined as the “mental ability to understand the nature and effects of one’s act”. When dealing in the field of elder law, mental capacity breaks down into several relevant functions:
A. Testamentary capacity, which is the capacity to make a Will;
B. Donative capacity, which is the capacity to make a gift or conveyance;
C. Contractual capacity, which involves whether or not the person possesses sufficient mental capacity to understand the nature of the transaction and to agree to its provisions.
In some states, the capacity to execute a durable power of attorney is the same required for contractual capacity. In other states, the capacity standard required to form a trust is more akin to that of testamentary capacity than contractual capacity.
In appropriate circumstances, lawyers will seek guidance from appropriate diagnosticians.
8. Estate Tax Update. Senate affirmed support for $3.5 million estate tax exemption. Senators rendered a vote in the Senate Finance Committee on a bill that is sponsored by Senator Max Baucss (D-Montana) to keep the estate tax at the exemption level of $3.5 million, which is the level that the estate tax currently scheduled to move to in 2009.
9. Son Is Liable. The U.S. Court of Appeals found that son of a Medicaid recipient was personally liable to return benefits paid. The court held that the son was personally liable to repay the state. The son’s role in dealing with his parents’ assets and applying for benefits, and personally benefiting from those assets, while at the same time ineligible benefits were provided for the benefit of the parents, triggered the son’s personal liability for repayment.
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
The Law Offices of Anthony B. Ferraro, LLC
5600 N River Road, Suite 764
Rosemont, IL 60018
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.