Dear friends of our firm:
In this month’s newsletter, we are bringing to your attention issues that have recently been making news in elder law. The topics below discuss elder care issues facing many of our clients and those who love them.
We hope you will find these of interest as we continue to “Educate to Motivate.”
1. Combining Elder Law and Veteran’s Benefits
Our office is combining our efforts as elder law attorneys with our expertise in the area of Medicaid qualification and Veteran’s Benefits planning (with emphasis in what is generally referred to as “Aid and Attendance”). We recently had a family that was ecstatic when they found out that their 85 year old mother (the surviving spouse of a WWII vet) would not have to spend $900.00 per month out of her life savings when going into an assisted living facility. The reason? Because the surviving spouse of a veteran can receive up to a maximum of $998.00 per month in “Aid and Attendance” benefits from the VA. Combining that benefit with an asset protection trust, which all her life savings of $200,000 could be transferred to without the creation of an ineligibility period for VA benefits, the family was very pleased. Bottom line-consult an elder law attorney to determine whether or not you as a veteran or the surviving spouse of a veteran are getting your “Aid and Attendance” benefits to which you are legally entitled for your years of service.
2. Nursing Home Reform Legislation is the First Major Industry Reform in 20 Years
A bill that the Senate Finance Committee is considering will create one of the largest reforms in nursing home care in the last twenty years. The bill is called the “Nursing Home Transparency and Improvement Act” (S2641). The bill would require nursing homes to indicate their ownership, complete standardization for complaints for residents, and improved information regarding staffing and reporting. The bill is designed to make it easier for those shopping for a nursing home to compare various facilities. Always have your nursing home contract reviewed by an elder law attorney.
3. Caregiving for “Long Distance Parents”
Consumer Reports has recently indicated that development of a support network, making use of technology to monitor your parents’ computer or make video calls, and other technological tools, such as monitoring devices, etc., can enable you to care for parents who may live out of state or far away. You might not be able to be there on a day to day basis by living across the country, but you can still help parents who need assistance with finances, taking of medicine, and general oversight. Of course, bringing in a geriatric care manager is a major step, but sometimes an initial assessment can cost $300.00. Remember that the average cost of a caregiver in the State of Illinois ranges somewhere from $15 to $21 per hour for basic assistance, to $150 for managed care or skilled nursing care. With regard to technology, there are personal emergency response systems and environmental detectors that can be installed for as little as $30-$100 per month.If you assist your parents and receive compensation you must consider creating a Personal Service Contract between you and your parents.
4. Status of Payment to Illinois Medicaid Providers
A recent Illinois audit confirms that the State of Illinois has a backlog of unpaid healthcare bills. The Auditor General found that Illinois ended each of the last three years with an average of $1.5 billion in unpaid bills. The State held bills without paying them for nearly two months before even starting the process of paying them. The Department of Healthcare and Family Services indicated it will make improvements. The State of Illinois could end up owing $81 million in interest on overdue bills.
5. Is This the End of Pooled Payback Trusts for Clients 65 Years or Older?
Recently, the Center for Medicare and Medicaid Services (CMS) issued a bulletin changing its long-standing position regarding pooled payback trusts. According to CMS, transfers to these pooled payback trusts created for individuals 65 years of older are now subject to transfer penalties as if the assets were gifted away to a third party. A pooled trust is an arrangement where a trust is established for a disabled individual. The pooling of funds in this trust enables the individuals to obtain Medicaid benefits while the assets still remain in the pooled trust. The state does have the ability to obtain a reimbursement for whatever it advances on behalf of the disabled person once the person is deceased. Then the balance of the funds in the pooled trust can be transferred to the family. This has been an effective planning tool. It seems that CMS is now curtailing with this new policy a long held and valuable planning technique. Stay tuned, as Illinois attorneys are expecting opposition to this notion.
6. Make Sure You Designate a Beneficiary
Advisors nationally are reminding all IRA and 401(k) owners to make sure that they have designated a beneficiary on their retirement accounts. If no beneficiary is designated, then your estate will become your beneficiary. The problem with having your estate become your beneficiary (instead of a person or an appropriate trust) is that the beneficiaries of your estate will be required to withdraw all of the money from the IRA or 401(k) within a five year period instead of being able to spread the payment of taxes over the life expectancy of the beneficiary themselves, thereby allowing for years of tax deferred compounded earnings. Have you considered a stand alone IRA trust to stretch out your IRA benefits and provide asset protection for your beneficiary?
7. Second Marriages and Life Insurance
Advisors are cautioning clients that second marriages create complications in determining beneficiary designations. Especially as it relates to life insurance, it is very important to ensure that you carefully draft beneficiary designations so that you can take care of your new spouse if you are remarried, while at the same time not neglecting your children from a previous marriage. Counseling on this issue is vital.
8. Watch Those Pre-Nup Agreements
In the State of Tennessee, a trial court ruled that a prenuptial agreement required the husband to pay for wife’s nursing home care. The prenuptial agreement between the parties indicated that the husband was responsible for the daily necessities of the wife. The court found that the expenses involved in being in a nursing home were considered to be daily necessities and ordered the husband to pay them under the terms of the prenuptial agreement.
P.S. Our Special Workshops.
As a notice to our readership, please be aware of the following upcoming dates for our free workshops entitled “5 Step Plan – Legally Protect Your Assets From Nursing Home Costs“:
June 11, 2008 at 4:00 pm
June 26, 2008 at 7:00 pm
July 9, 2008 at 7:00 pm
- – Call 847.563.4887 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
- – 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.