Increase in Veterans Aid & Attendance Benefits for 2012

12/29/2011 @ 3:10:PM By Moynihan_Lyons

We have just received notice of the amount of the 2012 increase to the Aid & Attendance benefit.  Starting in January, married Veterans can receive up to $2,019/mo. in reimbursement for unreimbursed medical expenses.  Single Veterans can receive up to $1,703/mo.  And Surviving Spouses may be eligible for up to $1,094/mo.

This is the first increase since 2009.  Those who are currently receiving Aid & Attendance should see this increase reflected in their January payments.

If you think that someone might benefit from accessing this benefit, please give us a call.  Too many people believe or have been told that “they can’t qualify” when that is just not true.

If you are interested in finding out more about planning for long-term disability and Safe Aging Now, please feel free to contact Terry Moynihan or Maureen Lyons, at (951) 781-1960.

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Safe Aging Now

10/27/2011 @ 10:38:AM By Moynihan_Lyons

Join Maureen Lyon for an informative seminar at Olive Grove Retirement Resort in Riverside,  CA.  She will be discussing the 3 components of Strategic Planning for Safe Aging.

Does your estate plan “really” address your needs when it comes to health, finance and autonomy?  Learning how a strategic plan using custom drafted trusts and powers of attorney can make a real differnce in the quality of your senior years.  Learn, too, about qualifying for the VA Aid and Attendance Benefit and other government benefits.

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10 Critical Questions You Should Ask Yourselves & Your Clients About Being Healthy, Wealthy & Wise

4/26/2011 @ 11:49:AM By Moynihan_Lyons

J. Terrence Moynihan presents to the Care Community on issues of critical importance regarding Safe Aging. Knowledge is power. So is planning. Good planning requires more than “filling in the blanks” regarding Who? What? When? and Where?. Learn how-to have those discussions that help your clients address these critical issues.

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Benefits of Final Expense Trusts

11/29/2010 @ 4:45:PM By Maureen Lyons

Most Americans have never discussed what should happen when they die. There are many decisions to make, yet they have very little help in making those decisions.

Studies show that more than 90% of Americans believe that pre-funding their funeral is a good idea, yet only 12% have done it. Studies also show that elder law and estate planning clients would prefer that this discussion take place in the context of their other planning. This creates an opportunity for the planning team to work together to fill this unique planning need.

According to a survey conducted by the National Funeral Directors Association, clients identified the following as the most appropriate times to pre-fund a funeral:

80% find it appropriate to pre-fund when afflicted with a serious illness.
71% find it appropriate to pre-fund with their trusted advisor.
61% find it appropriate to pre-fund at retirement.
58% find it appropriate to pre-fund when planning retirement.
9% find it appropriate to pre-fund when solicited by a funeral home.

Only 12% of Americans have worked with a funeral home to pre-plan, and only 9% find it  appropriate to pre-fund when solicited by a funeral home. However, 71% of Americans would like to set aside funds with their trusted advisor for this purpose.

A conversation about Final Expense benefits the following individuals: clients over the age of 55; adult children worried about their parents; those who don’twant to burden their family at death; those afflicted with a serious illness; and those with a funeral home aversion.

What is a Final Expense Trust?

A final expense trust (aka a funeral trust or burial trust) is specific-purpose, guaranteed-issue  insurance product that is irrevocable, un-assignable and provides dollar-for-dollar coverage that is readily available to pay the actual costs of a person’s final funeral, cremation, burial, or related expenses. Simply stated, it is a product designed to ensure the availability of funds to pay for the client’s desired final expenses when needed.

The benefits of a Final Expense Trust include:

- Death benefits are payable to the funeral home of the client’s choice; any excess funds will be returned to the client’s estate or designated beneficiaries.

- Funds are protected from all creditors, probate, nursing homes, and even Medicaid (Medi-Cal in California). Funds are immediately excluded as a resource in determining qualification for Medicaid. There is no Medicaid penalty for purchases of final expense trusts for the client and other members of the client’s family. Policy limits vary by product.

Final Expense Trust Considerations

Here are several questions you might think about relating to this planning tool:

What is important to you about how funeral arrangements should be conducted, or how do you picture the most appropriate final arrangements?

1. Is it important to you to have a traditional funeral?
2. What are your feelings regarding burial or cremation?
3. What needs to be purchased to fulfill your final wishes?
4. What do you believe these final arrangements will cost, and how do you plan to pay for them?
5. Do you know that Medicaid requires the spend-down of all liquid assets (including cash value life insurance and CDs), but actually encourages paying for a funeral with a pre-paid funeral and burial insurance trust?

Final Expense Trusts allow seniors and their families to address one of their significant planning
concerns – what will happen when they die. By working together, the senior’s “planning team” or advisor can address this issue without affecting  eligibility for Medi-Cal/Medicaid or other  government benefits.

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Medi-Cal Planning – Part 3

10/25/2010 @ 2:48:PM By Maureen Lyons

Medi-Cal (or Medicaid) “crisis planning” can be precipitated in the case of a senior who has either been admitted to a nursing home or is about to be placed in a nursing home — while being told that they have too much in assets to qualify for the program.

Given the high expense of  nursing homes, (upwards of $70,000 per year) many people look for ways to defray the costs of  long term care through Medi-Cal.  Through proper crisis planning, a senior’s hard earned savings may be protected from Medi-Cal.

There’s a lot of misinformation circulating out there. It is important that you consult with a qualified elder law attorney who is familiar with the Medi-Cal process.

There are strategic approaches that can help. While transfers either outright to a family member or to an irrevocable trust can create a penalty period for the person making the gift, sometimes a planned strategy involving gifting and the use of an annuity can provide a valuable planning tool.

For example, assume Mr. Jones suffers a stroke and ends up in a nursing home, and his cost of care exceeds the couple’s existing monthly income. However, the their total assets may be over the state’s allowable limit for a married couple.

One approach is to purchase an annuity, thereby converting excess assets into an income stream. This may enable Mr. Jones to qualify for Medi-Cal. In addition, the annuity can provide Mrs. Jones with extra income to supplement the loss of her husband’s income (which must be paid to the care facility).

For a single person in crisis planning, a plan of partial gifting plus the purchase of an annuity may also be appropriate. It should be noted, however, that any time a Medi-Cal applicant makes a gift, whether it is to a person or a trust, there can be a corresponding “penalty” or waiting period based on the size of the gift. The larger the gift, the longer a Medi-Cal applicant may have to wait to obtain eligibility.

The above examples should not be attempted without consulting a qualified elder law attorney. These are just used as illustrations to demonstrate how a legal advisor can help a senior fund long-term care requirements.

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Planning for Disability: Who Makes the Decisions?

9/20/2010 @ 6:27:PM By Maureen Lyons

There are two issues in planning for potential disability, as it relates to long term care:

1) The senior’s estate planning should thoroughly address disability from the point of view of decision making.

2) The senior should add HIPAA language and authorizations.

Decision making. When a client becomes disabled, he or she is often unable to make personal and/or financial decisions. If the client cannot make these decisions, someone must have the legal authority to do so. Otherwise, the family must apply to the court for the appointment of a guardian for either the client’s person or property, or both.

At a minimum, clients need broad powers of attorney that will allow agents to handle all of their property upon disability, as well as the appointment of a decision maker for health care decisions (the name of the legal document caries by state, but all accomplish the same thing).

Alternatively, a fully funded revocable trust can ensure that the client’s person and property will be cared for as the client desires, pursuant to the highest duty under law – that of a trustee.

Authorizations. Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), absent a written authorization from the patient, a health care provider or health care clearinghouse cannot disclose medical information to anyone other than the patient or the patient appointed under state law to make health care decisions for the patient.

The penalty for failure to comply with these rules is severe: civil penalties plus a criminal fine of $50,000 and up to one year of imprisonment per occurrence, and worse if the disclosure involves the intent to use the information for commercial advantage, personal gain, or malicious harm.

As a result, doctors, hospitals and other health care providers now refuse to release any information absent a release from the patient. For example, hospital staff will go so far as to refuse to disclose whether one’s spouse or parent has been admitted to the hospital. The inability to receive information about a loved one could become very troubling when the information concerns treatment as part of long term care.

A  “personal representative” for health care decisions has the same rights to receive information as the senior who has been disabled. Therefore, it is important that the  planning document authorize an individual to receive HIPAA-protected information.

HIPAA authorization for the release of medical information to other than an appointed personal representative must also be considered, so that loved ones and others who potentially need access to one’s medical information during a time of disability.

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Medi-Cal Planning for Long Term Care

9/6/2010 @ 2:19:PM By Maureen Lyons

In previous posts I discussed how long term care needs of seniors can be met through self (or third-party) insurance. But what if these are not possible options?

A senior can use a planning technique called a “Medicaid” trust. (Here in California, it’s called “Medi-Cal” trust). This is part of a comprehensive wealth planning process that your legal advisor can help you with.

In this kind of trust, the trust maker retains the right to all of the trust income for life. However, the senior will irrevocably give up the right to receive or benefit from the principal of the trust. By using this type of trust, a senior can preserve capital and still qualify for Medi-Cal. This will happen only after expiration of the “look-back period” for the transfer of the trust.

This means that if assets have been transferred or given away during the period before applying for Medi-Cal, coverage can be denied. This period can be as much as 5 years.

There is a specific method to calculating this “penalty period” depending on your state’s provisions. Your legal advisor can give your the specifics of this calculation. The variables that will affect the time period are: (a) nursing home cost in your state, and (b) the dollar amount of the transfer.

What are the implications of this “look back period” in terms of the senior’s need for long term care?

For the trust strategy to work, there must be sufficient funds to pay for the long term care needs of the individual during the waiting period before applying for Medi-Cal. This can be met through insurance, an income stream, or other assets.

If a Medi-Cal trust is not desired, it is still possible to make “outright” gifts of property, wait until the look-back period expires, and then apply for coverage.

If the home is the senior’s only asset, there are still certain techniques to protect the property in the context of Medi-Cal eligibility.

What is important to note is that with any of the “advanced” planning strategies available, the senior must have sufficient funds to cover  long term care costs during this ‘look back”  time segment.

Its critically important that seniors consult with a qualified attorney, even when they think that they are engaging in “simple Medi-cal planning.

Long term care strategy, and specifically Medi-Cal planning is a highly specialized field. Laws are constantly changing, and there are a lot of myths and anecdotal “advice” circulating out there that can lead you down the wrong path.

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Meeting Long Term Care Needs with Insurance

8/30/2010 @ 7:56:PM By Maureen Lyons

In the previous post, we discussed Medicare’s limitations in covering long term care needs. There are several options available, each differing in terms of coverage and complexity. These alternatives are all part of a comprehensive life care planning and wealth management strategy.

Here are two basic options available:

Self-insurance for possible long term care expenses. This requires a close collaboration of financial planning and estate and tax professionals to ensure that there are enough assets available to cover possible costs for as long as needed. This requires a comprehensive look at the overall financial condition of the senior, as well as a thorough understanding of the person’s health and wishes regarding care in the event of incapacity. The main consideration is to create an investment strategy that will produce asset growth and income sufficient to fund the individual’s long term care expenses

When working with an advisor, detailed information will be needed for the initial analysis. This will included client assets, current and anticipated income and expenses, and other data, such as where care will occur, the level of support available from family caregivers, and any family history of incapacity. This information will provide the foundation for the planning required to maximize the value of Social Security income, fixed pensions, dividend, interest, and other income streams, as well as maximizing tax deductions for such things as medical expenses.

Long term care insurance. The majority of seniors may not be able to fully self-insure for their long term care needs. Those who cannot but are insurable and can afford the premiums should integrate a long term care policy into their comprehensive wealth plan.

There are two types of policies available: (a) cash payment, and (b) reimbursement. The former pays cash to the insured. The latter reimburses the insured for actual costs incurred.

Policy benefits to consider in a long term care policy include: nursing home and home care coverage; sufficient daily payouts; elimination periods (the number of days you must be in a nursing home before benefits begin, typically 0 to 100 days); duration of benefits; renewability; waiver of premiums (insured pays no premiums while receiving benefits); and inflation protection.

In a future post, we will discuss some of the “advanced” methods available for long term care planning, such as the “Medicaid” trust and other asset protection strategies.

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Planning for Long-term Care Needs: Will Medicare Cover Me?

8/23/2010 @ 4:26:PM By Maureen Lyons

Two out of every five Americans reaching the age of 65 will require some type of long-term care. Though most seniors prefer to stay at home, the staggering price tag of full-time in-home care can make this an untenable option for most families.

Is Medicare an option for financing a senior’s long-term care needs?

Many seniors think that Medicare will pay for long-term care if and when they need it. This is incorrect. It does not cover hospital costs beyond 150 days, skilled nursing home costs beyond 100 days, or any custodial nursing home or non-skilled home health care.

This is what Medicare specifically covers:

-Qualified medical expenses (80% of an approved amount for doctors, surgical services, etc.)
-Hospitalization for 90 days per benefit period with a total deductible of $1,024.00 for the first 60 days, and a co-payment of $256 per day for the remaining 30 days
-An additional one-time, lifetime benefit of 60 days of hospitalization, with a co-payment of $512 per day, for a maximum of 150 days

Medicare only pays for a limited period of “skilled” nursing home care that begins within 30 days following a hospital stay of at least 3 days. The maximum period is 100 days per benefit period.

“Skilled” care is that provided under the supervision of a doctor that requires the services of skilled professionals such as physical therapists or registered nurses. Medicare does not cover “custodial care,” which is basic personal care and other maintenance-level serices.

If the patient is eligible, Medicare will pay 100% of the costs for up to 20 days of skilled nursing home care. After that, from day 21 through day 100, the patient has a $128 per day co-payment, assuming eleigibility.

If a patient stops needing skilled nursing home care, the patient ceases to be eligible and Medicare stops paying. Home health care may be available in limited amounts, but only if “medically necessary.”

For all Medicare benefits there are deductibles and co-payments, which can be substantial. Lifetime limits can easily be reached in the case of catastrophic illness.

The bottom line is that one has to look beyond Medicare to finance long-term care needs. In our next blog post we will cover other options available to seniors to meet this basic requirement.

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