Long-Term Care Planning – Facing the Expense of Long-Term Care

For individuals who may be needing care in an Assisted Living Facility (ALF) or in a nursing home, fearing that they will become penniless paying for this care may be one of the biggest issues at hand.

MEDICAID benefits exist for those who qualify and can be used to pay for the majority of the expense of long term care or at least defray the expense significantly. Qualifying for these Medicaid benefits can bring peace of mind to those who were sure they would have to go into poverty before receiving assistance. Being in a long term care facility and totally financially dependent upon the government for one’s comfort and welfare is not the best situation for anyone.

It is not necessary to face these concerns alone. By consulting with a qualified elder law attorney, all available options can be explored and explained and the way can be paved to access these benefits while protecting assets and providing the desired level of care and comfort for the individual.

Fact or Fiction?

I can only have $2,000 in assets to be eligible for Medicaid benefits.
This may be factual in part but it does not tell the whole story. First, $2,000 is only the maximum for countable assets. The key here is understanding what is countable and what is not. A qualified elder law attorney can explain how this works.

I’ll have to sign my home over to the state before I can be eligible for Medicaid.
This is FICTION because the home you own as your residence is protected as “homestead” under the Florida Constitution. Without taking additional steps, however, your home could be used to “pay back” Medicaid after your death.

If I have more than $2,000 in my name, I should give everything above that amount to my kids and then I’ll be within the eligibility limit.
This is FICTION. In fact, giving the money away could actually bar you from receiving benefits for a significant period of time. You should talk to an elder law attorney to learn about permissible gifting and about other options for obtaining Medicaid eligibility.  

If I simply transfer all of my assets above $2,000 into a trust, they will no longer be in my name and I will be eligible for Medicaid.
FICTION. If you do this you could incur a lengthy ineligibility period! While there are certain special types of trusts that may be used for Medicaid planning purposes, only an attorney experienced in this area will be able to assist you in setting up the right type of trust for your circumstances and one that is permitted by Medicaid rules and procedures.

If I transfer all my assets to my spouse, I will immediately be eligible for Medicaid.
This could be FICTION if your spouse ends up with more than the specified limit of assets since Medicaid looks at both spouses’ combined assets in determining eligibility.

If I just don’t tell anyone about certain assets, they won’t be counted in determining my Medicaid eligibility.
FICTION. While it might be possible to obtain Medicaid benefits by not revealing all of your assets, it’s more likely that you will eventually be found out. The legal name for withholding such information is “FRAUD” and the state can charge you with this crime for which serious penalties can be imposed. Instead, consult an elder law attorney for legal methods of obtaining Medicaid eligibility.

Medicaid and SSI (Supplemental Security Income) Benefits

If a person is receiving SSI benefits and Medicaid, is there a problem if that person later receives an inheritance, wins a lottery prize, recovers money from a lawsuit or even gets an award of alimony or child support?

There could be a very serious problem for an SSI beneficiary if any of the above occurs. And it’s not just the SSI beneficiary’s receipt of these assets that could cause problems. If a spouse, parent or other member of the beneficiary’s household receives these new assets, the SSI beneficiary could lose both the SSI benefit and their medical coverage from Medicaid. The only way to avoid such an unwanted outcome is to set up the proper kind of protective trust before the assets are received. Setting up such a trust should be handled by an appropriately skilled legal expert.

More Information on Long Term Care Planning

Durable Power of Attorney

This is a key document which gives a trusted person the tools to assist someone who is no longer able to handle his or her daily affairs, such as banking bill paying, collecting income or debts, presenting a claim or signing a contract.

It’s always best to have, in addition to the primary agent named in this document, at least one or two back-up persons to serve “just in case”.

The agent named in this document is known as “the attorney-in-fact” although that person is not usually really an attorney—it’s just a legal term.

The “principal” or the one signing this document must be able to understand the basic purpose of the document and should only entrust the authority to someone they know, trust and who has no personal motive to serve nor any conflicts of interest.

The Durable Power of attorney is only good so long as the person who signed it is alive or until he or she revokes it.

Advance Directives

In addition to a Will and a Durable Power of Attorney (neither of which a mature adult should be without), there are three other personal documents, referred to as “Advance Directives” which are important for peace of mind and to save friends and family members unnecessary grief and pain should something happen to you.

Living Wills

If you have definite ideas about what you would or would not want done to you were you to be suffering from a terminal illness for which there was no cure or were you to become irretrievably brain-damaged, then you most definitely should have a Living Will. If you would shun the tubes, machines, artificial feeding and /or hydration processes that may only serve to prolong your dying then you must express those wishes –before they are needed– in a properly worded and legally executed Living Will.

Make sure that any Living Will you sign fully and accurately expresses your wishes. Take care to discuss and understand the legal significance of this document with an elder law attorney who will also make sure that the Living Will is properly executed with the necessary formalities to make it legally binding. An attorney will also be able to advise you on what you are to do with this document once you have signed it.

Designation of Health Care Surrogate

A related document, but one which is used in distinctly different circumstances than the Living Will, is the Designation of Health Care Surrogate. Should you suffer a health condition which, although not terminal, makes it difficult or impossible for you to discuss possible treatments, therapies and medical protocols with your physician, this document allows you to designate someone whom you trust to do that for you. This document is not a substitute for a Living Will but the two documents work together nicely to cover the health situations you may encounter.

Designation of Pre-Need Guardian

This document is particularly vital for individuals who are elderly or disabled and whose family members may be some distance away and not able to visit regularly. It is a sad but well known fact that there exist predators who try to take advantage of older people, particularly those who live alone and who may be lonely for companionship.

To keep such predators from gaining legal access to a loved one’s assets or taking control of their person by obtaining a voluntary guardianship, a Designation of Pre-need Guardian, when filed with the court, will offer some protection to the loved one. This document names a trusted individual to be that person’s guardian should the person ever need one. Thus, would-be interlopers with bad intentions will be prevented from obtaining legal control over the individual.