Elder Law Report
Elder Law Report
Protecting Your Wealth: Navigating Medicaid Crisis and Long-Term Care Planning
Can sudden illness or injury devastate your financial stability? Discover essential strategies to protect your hard-earned assets from the exorbitant costs of long-term care in our deep dive into Medicaid crisis planning. We break down the myths surrounding Medicaid asset limits and discuss how legal guidance can ensure your wealth, including real estate and investments, remains safe. Learn how to strategically plan to qualify for Medicaid benefits while securing financial stability for yourself and your spouse during tough times.
In our exploration of tax and long-term care planning, we highlight the importance of preemptive measures to safeguard your wealth. Understand the benefits of retroactive tax planning and how you can potentially reclaim some of the taxes you've paid over the years. This episode isn't just about preserving your assets; it's about ensuring a secure future for your loved ones. Tune in for invaluable insights and guidance on estate planning focused on taxation and long-term care, complete with free consultations to help you navigate these complex issues. Join us and arm yourself with the knowledge to face these challenges head-on.
Greg McIntyre, with my law partner, brenton Begley, and we're here today to talk about Medicaid crisis planning or really, as we like to call it, protecting your assets without having to lose them to the high cost of long-term care. Brenton, good morning, good morning. So we're elder law attorneys. We do estate planning and elder law at McIntyre Elder Law and we have a lot of experience for a lot of years in helping people, even in crisis situations. So, britton, why would we call it a crisis situation as opposed to just estate planning, when there's a long-term care issue immediately involved?
Brenton Begley:Yeah, so if someone needs long-term care, they're looking at paying tens of thousands of dollars a month to defray the cost of that long-term care. They're looking at paying tens of thousands of dollars a month to defray the cost of that long-term care. And if someone hasn't planned ahead to figure out a way to protect assets and pay for long-term care, then they face ostensibly a crisis situation of needing to pay possibly tens of thousands of dollars, liquidate assets, sell off the home you know, get rid of the inheritance they're going to pass to a spouse or a loved one, just to pay for the cost of long-term care. And that's where we come in to help them in that crisis situation to preserve as much of the money and property that they have saved as possible and figure out a way to pay for that very expensive long-term care.
Greg McIntyre:Okay, britton, you know I'm married. What if I needed care? I had a stroke, a fall, an accident, an illness, an injury that necessitated me to go to the hospital. They stabilized me in ICU and then they moved me out of ICU, as they should, into rehabilitation, which is a separate facility, private facility, maybe a wing of a nursing home. And then I, when I'm coming out of that, you know, I'm looking at ending my rehabilitation stint and coming out and going to assisted living or nursing home care. You know, is my wife in danger of losing um, our retire, retirement, retirement, our you know our home, our other things that we've worked hard for our whole lives? Is she in danger of not having availability to or is she going to have to spend all that down on my care?
Brenton Begley:Yeah, you know. So what? What a lot of people are afraid of. You know we hear people all the time say well, the government's going to get my money, the nursing home is going to come in and take what I got. And the fact of the matter is is that they can't just come in and reach in your bank account and take what you have. The problem is, the risk is just as high. But the problem is more practical. It's you have to pay to play right, if you're going to be in a nursing home, assisted living they don't do that for free. They have to get paid somehow.
Greg McIntyre:So if you kind of like it sounds like a landlord.
Brenton Begley:It's like like I'm renting a room there, right with nursing, nursing care, things like that, yeah, and they will kick you out if you don't pay. Uh, despite your condition and you know so, the in that situation your wife would be in jeopardy because you would need to use resources to keep you there. I mean, your wife would want you to have care. If you can't live at home, they can't. And even if you do live at home, you know you would have to have some type of care at home. So you'd be in a really dangerous situation with respect to your assets without doing something. You'd be in a very dangerous situation because you know the retirement that might have to be used to pay for the cost of care might have to use other savings, other investments, or, if you don't have that or you go through that, then you start looking at property and you know everything you got to be able to pay for that care.
Greg McIntyre:Okay, okay. And what are some of the methods? Let's say, in the situation with me and my wife, what are some of the methods that might be used or employed when we're working with the firm and our attorneys and our benefits department? What are some of the methods that can be employed to help me protect my real estate, to help me protect my home, to help me protect my other assets, my other liquid assets, investments, things like that?
Brenton Begley:Right. So it's important to understand, when it comes to qualification of benefit, what you're trying to do is you're trying to get a benefit to pay for care. So the first, one of the first strategies that help get a benefit to pay for the care instead of paying out of pocket for the care. And so it's important to understand that you can own quite a bit more assets than you would think and still qualify for a benefit to pay for care. So a lot of people think about Medicaid, for example, and they think, oh, I have to have nothing in my name whatsoever and then, and only then, can I qualify for benefit, pay for care.
Brenton Begley:But we're talking about long term care Medicaid, or special assistance Medicaid, where the calculus is a little bit different, because you know, the program understands that you're needing to pay a lot of money out for long term care, so more people qualify for long termterm care benefits than would someone who's receiving Medicaid to pay for health insurance, something like that. So, that being said, you can own quite a bit and, more importantly, your spouse can own quite a bit of things, so you can transfer assets to a spouse, and I don't want to make it as simple as that. There's a few more steps there, but generally speaking, you can preserve assets under a healthy spouse. If one of the spouses needs care, setting that up correctly is important because you want to make sure that the assets are actually protected, not just that you qualify, so you know. Pause for a second.
Greg McIntyre:I can't just transfer them directly to the healthy spouse called the community spouse, right. Right, you know. But you know there's ways that that the the benefits program, special assistance and long-term care, medicaid allow for someone to transfer, um, really all the assets to the healthy spouse. You know, generally, right, real estate and money, okay, investments, things like that but there's specific ways that can be done that need to be organized correctly. There's some timing to that as well and it's not as simple as it's much more complex than just transferring the assets. Right, and that's where the legal work comes in.
Brenton Begley:That's correct. That's correct. And the other side of it is you want to make sure the assets are protected as well. So there's the front. There's two sides to this equation, really. The first side is does the person qualify with the assets that they have without getting rid of a majority of the assets? Okay, that's, that's, that's the goal. At the front ends to say, hey, we don't want to have to have this couple get rid of, you know, really, any of the assets that they have. We want to preserve as much as possible and get the you know, the applicant spouse care paid for. And then the other side of it is we want to make sure that, you know, the department of social services or any other medical creditor does not have the ability to come back after those assets that we have preserved. So it's important to look at both sides of that equation and solve for both sides.
Greg McIntyre:And and for people in this situation.
Greg McIntyre:We've created an entire department, our benefits department, and that has some really, really knowledgeable team members and paralegals in there that work closely with our attorneys, who are also very knowledgeable on how to preserve assets, even in a crisis situation, for a single person or a married couple, and transfers those to your loved ones in the end, but preserve them for the healthy spouse, for example, while both spouses are alive.
Greg McIntyre:And we can do that with the real estate, we can do that with investments and the money and really, I mean, I mean, you know we, we pride ourselves in being able to do that even in a crisis and emergency situation. But you know, brenton, it'd be ideal if, um, if, if we weren't cramming the night before the test, so to speak. You know, if we weren't doing it in an emergency, it'd be ideal. You know, planning ahead, uh, always, I think, begets better results. When you put that purposeful, contemplative thought into how you want to protect and still control your assets for the rest of your life, and, with an eye on and considering what happens if one of us needs long-term care, how do we plan ahead to make sure that we never end up in this crisis situation?
Brenton Begley:Yeah, in the same way that we've created a whole department for benefits, helping people preserve and protect what they have and, at the same time, get qualified for a benefit to pay for long-term care, we've also created an entire department for planning ahead. That's our estate planning department, and one of the ways that we help protect assets is we plan ahead with an eye towards the possibility of needing long-term care. I mean, we understand that over 70% of individuals who may get past the age of 65 will need some type of long-term care. So every one of us who is planning for the future should be planning with an eye towards paying very expensive long-term care or figuring out how to get around using your own money to pay for very expensive long-term care figuring out how to get around using your own money to pay for very expensive long-term care. And another thing that we do is keep an eye on how to also help the individuals qualify for a benefit.
Brenton Begley:Now, I'm not advocating that everybody plan to absolutely 100% get Medicaid to pay for their long-term care. However, it's good to keep it open as a possibility. You want options in the future and one of the things that a good plan can do is make sure you have those options and so planning ahead with estate planning tools like the foundational documents, the ones that everybody should have, the general durable power of attorney, healthcare power of attorney, living will and will, and then using things like deeds and trust to make sure that assets are protected. It's essential to ensure that you have a plan going forward If you do find yourself in a Medicaid crisis situation. The only crisis is the fact that the person needs that health care and it's not a crisis to the money and property.
Greg McIntyre:And you bring up a good point. You know, you know so. So we're we're talking about planning for potential benefits, but also, really at the heart of what we're talking about, regardless of how much money you have, I mean, if you're a multimillionaire and I'll tell you, I deal with a lot of them all the time, and so do you, Brenton as far as planning their estate plans, you know they're aware of the high cost of long-term care. Right, Even at that level, you're aware of the high cost of long-term care and you're going to plan for it. If you're smart, then you're smart with your money and you're smart with your planning, Then you're smart with your planning, then you're going to look out for what are the obstacles in the future that could really jeopardize my fortune, jeopardize my retirement, jeopardize my legacy, jeopardize my property, jeopardize my home.
Greg McIntyre:And you know, even at that level, they're aware of the exponential cost of that long-term care in relation to how much money they have and how much it's going to cost per month.
Greg McIntyre:And they're going to want to be smart to set up their plan so that, whether it's with a benefit they can access, or it's long-term care insurance they pay for, or it's it's a plan where they self-insure Right. We want to lay that out and set that up and we help them do that. Okay, we help them do that. The key is to sit down ahead of time and get a grasp on what's possible and the way assets need to be positioned to even minimize taxation as we pass assets and maximize, you know what you stay in control of and then can pass to your heirs as a legacy and minimize and avoid the high cost of anything out there in the future. Any bump in the road or I would say long-term care is much more than a bump in the road. That could be a brick wall you run into, but to plan around that and that's something that we help people do, regardless of your asset level- that's correct.
Brenton Begley:You know, I think there's stigma tied to trying to obtain a benefit, and a benefit like Medicaid is a hard benefit to get without some type of very intricate legal planning. So what that does is it gives us a good target to aim at, and so if we use that as a standard that we're going to plan where there's a possibility you could qualify for something like that, that means that we've put protections in place along the way, these legal tools in place along the way that could protect you in any other contingency when it comes to long-term care. And that's the goal is, if your assets are set up where you could possibly qualify for long-term care Medicaid in the future, then you're likely going to have substantial protection for your money and property for any other contingency that you run in with respect to your needs to pay for long-term care so it's a multi-faceted benefit and win from an estate planning perspective, which also right, which gets you also in a position to access a benefit.
Greg McIntyre:And the way I speak to that stigma a lot in my consults Brenton is and you do this too, I know is you know, man, I pay a lot of money in taxes. We all do. You can't breathe without you, can't buy something without paying sales tax. You can't own property without paying property tax. You can't buy something without paying sales tax. You can't. You can't own property without paying property tax. You can't earn a dollar in the US without you know giving a large percentage of it.
Greg McIntyre:You know a big chunk of it to the governments right, state and Fed. And so really you know you're giving all this out and then you get home with a little. You know maybe half of you know what you actually make and you're able to obtain a few things for yourself or your family over time. And then you know to be able to access some of that money you put in that tax bank and pull it back out, get some of it back out, look at it as a refund you know to use for long term care. It's the potential to do that, if you're pre-planning to put yourself in that position, which would also benefit you in a number of different ways, regardless of their creditor claims, if there were other things that happened in your life that gave you protection yeah, and you know, for for a lot of people out there you know if they're even if there is a stigma for medicaid, it might be a reality.
Brenton Begley:I mean the the average stay in a facility can be between four to seven years and you know if someone's in a facility for that long middle class individual especially, they could blow through all of their assets and still end up on Medicaid. So the question at that point is do you want to preserve the assets before you get on Medicaid or go through all the assets that you want to leave a loved one, you know, before you get on that benefit? So you know that there is a stigma there. Hopefully you know opening people's eyes to the benefit of planning in that way and again, just keeping open to the option. You know, because when it comes down to it and you're looking at paying hundreds of thousands of dollars, giving up inheritance for your spouse or your children, then you know a lot of times it reframes the issue in people's minds and they understand the benefit of going and planning for something like Medicaid or VA.
Greg McIntyre:You can look at it as tax planning, retroactive tax planning. Yes, that's the way I frame it. Yeah, retroactive tax planning. So I've enjoyed the conversation. Britain, yeah, you're very knowledgeable about this, and I feel like you have to be knowledgeable about this to even ask the questions about that. So, so, yeah, even for the the questions and navigating that, it's been fun.
Greg McIntyre:Um and uh, you know, if, if anybody out there would like to engage in estate planning, um, with the eye on taxation, long-term care, uh, and avoiding that crisis with you, or you and your spouse, we'd be glad to offer a free consult to do that. Or if you're in a position as a person who needs care, or a family member, a loved one of a person who needs care, who's been, you know, who's an agent under a power of attorney, or or a guardian we handle those situations all the time Give us a call, I'd offer a free consult. You can access that free consult by calling 1-888-999-6600, 1-888-999-6600, or schedule right on our calendars online on our website at mcelderdahlcom. Slash scheduling. And. Thank you very much, brenton, and stay tuned next week for our next Elder Law Report.
Brenton Begley:See you.