Elder Law Update – October 24, 2007

“LEGALLY AND EFFECTIVELY PROTECTING YOUR ASSETS FROM A LONG TERM NURSING HOME STAY”

Elder Law News

1.     Some experts are stating that the greatest threat to the financial security of middle-Americans is the cost of long-term nursing home care.

2.    VA Benefits Discovered.  Millions of wartime veterans (even those not wounded while serving) and their spouses may be eligible for special monthly pension benefits solely because they are over 65 years of age and are homebound, in assisted/supportive living, or in a nursing home.  Many veterans don’t know that they qualify.

3.     Long term care insurance is useful, even though recently a player in the long term care insurance industry raised its premiums for existing householders.  Many industry observers believe that there will be further industry repricing in the future.  Howevermake no mistake about it, long term care insurance, if you can qualify for it and afford it, is an important component in providing for asset protection for future long term nursing home care. Be sure to compare apples to apples.

4.     North Carolina has joined the long list of states that have issued another draft of rules regulating the transfer of assets provisions in the Deficit Reduction Act of 2005.

5.     With the Estate Tax set to expire in 2010 for one year and then revert back to a $1 million exemption amount in 2011, a new bipartisan bill has been introduced in the House that would increase the estate tax exemption by $250,000 every year from 2009 to 2015, and create two separate estate tax rates.  Here we go again.

6.     Certain studies have shown that pre-retirees significantly underestimatetheir life expectancy and long term care needs.

7.     Should you sign a nursing home admission agreement?  If you are putting someone into a nursing home, it can be a very stressful situation.  When signing an agreement on behalf of an incapacitated resident, you should sign only as the resident’s agent.  Do not sign the agreement as a responsible party. Nursing homes are prohibited from requiring third parties to guarantee paymenton nursing home bills.  Always have qualified counsel review this application first.

8.     More seniors are seen to have mortgage payments into retirement.

9.     The first boomer will become eligible for Social Security in 2008.

Elder Law Cases

1.     A Pennsylvania court recently affirmed the denial of Medicaid benefits, finding that the full value of US Savings Bonds that the applicant owned jointly with her children were an available resource for Medicaid purposes.  The court alsorejected the resident’s argument that US Treasury regulations require thatonly 50% of the value of the bonds should be attributable to the applicant as co-owner.  It is not always as it seems for Medicaid purposes.

2.    A New York trial court found that funds transferred from a guardian to a spouse for Medicaid planning purposes created a constructive trust for the benefit of the incapacitated person.  When the guardian transferred the resident’s assets to her husband’s name, the court felt that it was with the understanding that the husband agreed to pay for the resident’s one on one care with the transferred assets.  Because the husband did not do so, the guardian petitioned the court to transfer the assets back to the resident nursing home wife.  The Supreme Court of New York held for the guardian and ordered that the assets be transferred back to the resident spouse, holding that the funds transferred to the healthy spouse created a constructive trust for the benefit of the incapacitated spouse.  Do your long term care planning and your Medicaid asset protection planning so that you don’t need a guardian.

3.     Recently the Eleventh Circuit Court found that a provision in a long term care policy is ambiguous enough so that the policy had to be construed against the insurer.  Have your policy reviewed.

Mission Statement

Our firm is dedicated to the legal and effective protection of our clients’ assets from taxation, as well as planning for Medicaid asset protectiondue to a long term nursing home stay.

“Educate to Motivate”

Anthony B. Ferraro

Attorney-CPA

5600 N River Road, Suite 764

Rosemont, IL 60018

PH(847)292-1220

abferrarolaw@abferrarolaw.com

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.