​ Does Medicaid Have a Right to My Father’s Life Insurance Policy?
 By Paul Lorrah







In some states, yes. 
​
Some states require the state to be named as first beneficiary of the policy if the death benefit is above $1,500.
Other states will only gain access to the funds if they are paid to the Medicaid recipients estate.
 
Types of life insurance;
Term policies [meaning they expire after a certain time period]. These policies do not build cash value [meaning they have no value until the person passes away].
 
Whole life policies - these policies generally do not expire. Additionally, these policies build cash value [meaning they can be "cashed in" or cancelled before a person passes away and they can receive a cash payment].
 
Because whole life policies have value, this amount counts towards a person's resource limits when applying for Medicaid benefits. Therefore, the policy may have to be cashed out prior to applying for Medicaid.
Term policies would not have to be cashed out because they have no value.
 
Additionally, the Medicaid agency does not allow for insurance premium payments when calculating the  Medicaid applicant's income so other plans must be made for payment.
 
Medicaid planning and approval can be difficult if the applicant owns resources.
 
We have strategies that would allow an applicant to retain their life insurance policies if our Asset Protection Plan calls for it.
 
Contact us today for expert Medicaid planning, asset protection services

                                                                          Estate planning for seniors - why it must be different
 








​If you're over 65 and you visit an estate planning attorney and they complete a traditional estate plan for you, you may be getting a disservice.

Why? 
traditional estate plans don't provide asset protection against long term care, nursing homes and Medicaid.
what is a "traditional estate plan" - 

Generally, a traditional estate plan for most people will include a financial Power of Attorney document, medical Power of Attorney document and a living Trust.

Both the financial and medical power of attorney documents are a must, no doubt, don't go without them.
However, the living Trust is what were having issue with.  

Many of you have probably heard of a  living Trust .  A living trust is a document that creates an entity that can own property, investments, cash, cars,  etc.  Almost anything, other than a tax deferred financial account can be owned by a Trust. it's meant to avoid Probate.

A trust has a Trustee who manages the items and beneficiaries who receive these items at your passing.

How does it work?
Ownership of an item is transferred to the trust. Let's say a house.  The deed is transferred to the Trust, the Trust now owns the home.  You are named as Trustee. You can live in the home, make repairs, etc. do anything that you could before.

The difference shows when you die. Because you're not the owner of the home, when you die, it passes directly to the named beneficiaries. It's not part of your estate.

This process avoids probate.  Probate is the legal process of distributing your estate, settling debt, etc. when you pass. Most people wish to avoid this process because it is very lengthy, costly and potentially messy.
So, a living Trust is meant to avoid Probate. That's great, you're all taken care of when you die.

But what happens while you're alive? 
if you need long term care you may have to spend all of your savings and sell your home to pay for the cost.
Nursing homes average $10,000 - $14,000 per month [depending on care needs and location].

A living Trust does not protect the items placed in the Trust because it's revocable. That means you can take the items out anytime you wish.

because of that, it does not protect your assets while you're alive.

What can I do? 
A properly drafted Asset Protection Trust will safeguard your assets against the cost of long term care.
How?
​
Because assets held by an Asset Protection Trust are shielded you can apply for Medicaid benefits to pay your long term care costs without spending or selling anything owned by the Trust.
 
Therefore, a "traditional estate plan" is obsolete.
 
if you're over 65;
You need Asset Protection planning along with long term care Medicaid planning infused into your estate plan.
 
long term care planning is complex, most estate planning attorneys are unfamiliar with it.
 
you need to work with someone who is a Medicaid and long term care expert.
contact us to today to learn more.  [email protected]

​Is A Revocable Living Trust Obsolete for A Senior's Estate Plan?

Currently the Revocable Living Trust is one of the most popular type of trust for estate planning but if you're a senior over the age of 70,  you're doing yourself a disservice by using one. 

Why? Let's review;

What is a Revocable Living Trust?
A revocable living trust, is a legal document that places your assets—investments, bank accounts, real estate, etc. in trust for your benefit during your lifetime and spells out where you'd like these things to go upon your death. Because it is revocable you can cancel or change it at any time during your lifetime.
 
This type of Trust's main purpose is to avoid probate.  Probate is the legal process of disbursing your assets upon your passing.  A main goal of estate planning is to avoid probate because of the cost involved and the time frame. Attorney fees and fees that must be paid to the state in which you live which [based on the value of  your estate] will usually be very high.
Generally if a person's estate has real property and/or a value of anywhere from $30,000 to $50,000 [depending on your state] or more your estate must go through probate.

At one time a revocable living trust was an estate planning attorney's go to plan and included Power of Attorney documents and that was about it. Every attorney did it the same way and many, many still do.

If the living trust avoids probate, that's a good thing. So what's wrong with it?

It does not provide any asset protection.
It will protect your assets after you pass away but not at all while you're alive.  

Let's get into it a little deeper.

If you're doing your estate plan in your 30's, 40's, 50's or maybe even in your 60's it's perfectly fine and is recommended because you can make changes as you're life and financial circumstances change.

However, if you're in your 70's you need to be planning for long term care. Let's face it, we all hate talking about it but statistics show that 76% of all Americans over the age of 70 will require some level of long term care in their lives.

Because of that we have to include nursing homes in the scope of long term care planning. Nursing homes cost on an average of $10,000 per  month. Depending on where you live, it's not uncommon for the to be as much as $14,000 per month.

With those high costs, no one wants to make that payment each month very long.

So, what are your options?  Medicaid.  Long term care Medicaid programs pay 100% of the costs associated with nursing homes [in some states it will also pay for assisted living and at home care] once approved.

Let' s get one thing straight,  Medicaid is NOT welfare. Medicaid is part of the Social Security act and was initially designed solely to pay for Nursing home costs.

You've paid into Social Security your whole working life, you deserve to take advantage of all that it has to offer.

However, Medicaid approval may not be possible if you have assets, investments, real estate, etc.  

But if I placed my home and savings in the Living Trust, I'll be ok, right?
Actually, NO

That's where the Revocable Living Trust falls apart. 

Since it's revocable, everything in it will be counted as an asset and make you ineligible for Medicaid until it's been spent.

No one wants to plan to leave their assets to their children, family, etc, just to have it lost to long term care costs.
 
What's the Answer?
An Asset Protection Trust.
The main difference between the asset protection trust and living trust is that the asset protection trust is designed to protect your assets during your lifetime AND  after.

After your life time it will still accomplish all of your goals to avoid probate.

During your lifetime it will protect those assets from law suits, divorce, creditors and the big one - Medicaid - it will ensure that all of the assets placed in the trust are not counted for Medicaid eligibility.

What does that mean?  It means that when used properly,  the day that you have to enter a nursing home, Medicaid will make the payments each month.

An Asset Protection Trust does require a lot more thorough planning because what you don't place in the Trust is just as important as what you do.

Funds that you may need in the near future won't be placed into the Trust, it will not affect your current lifestyle.

However, when you're health deteriorates it will be the most valuable tool you've ever used.

Let's use a scenario.
John, age 75 has a house and $300,000 in savings. 
John visits his local attorney for estate planning and they suggest a Revocable Living Trust for his protection.
the attorney helps arrange for the transfer of the family home and $150,000 of the savings to go to the Trust.

John leaves the office feeling good about his decision.

Lets; fast forward 6 years
John has a stroke, goes to rehab and realizes he can no longer care for himself. He can't return home and must go to a long term care nursing home.

The nursing home says it will cost $11,000 per month for his care unless he applies for Medicaid.

John says to himself, I'll apply for Medicaid since the house and a large savings account was transferred to my living trust, I should be eligible.

Unfortunately, No.    Medicaid eligibility does not recognize a living trust as protection. 

The house and savings account will count and he is now not eligible for Medicaid and may have to spend the savings and sell the family house to pay the nursing home.

He now realizes that he may not have any inheritance to leave his children.

However, If john had placed those same assets in An Asset Protection Trust,   they would have been protected, not counted for Medicaid eligibility.

His children would be the beneficiary of the family house and the savings account NOT the nursing home. Medicaid would be paying John's bill, not his children's inheritance.  

 So, if you're a senior age 70 or more, An Asset Protection Trust will serve you much better than a living trust.

Questions?  call us today to learn more about asset protection strategies to guard against the cost of long term care.
​855.471.6771    

​
Caution!!  Caregiver Burnout Is Alarmingly Dangerous

According to a recent agingcare.com article, 30% of caregivers die before those they are caring for. 


Most of these deaths are contributed to “caregiver burnout,” a type of extreme stress common to many caregivers even under normal “non-pandemic” conditions.

Caregivers often don’t good care of themselves or take time to go to their own doctor appointments.




​Self-care is essential for caregivers, especially during this time.


Are You Experiencing Extreme Stress as a caregiver?
If you’re a caregiver  and you are experiencing excessive exhaustion and feelings of hopelessness, you are not alone.

The National Alliance for Caregiving documented states being a family caregiver can be high stress. It can also, in some cases, bring on Post Traumatic Stress Disorder (PTSD), an anxiety disorder caused by trauma. 
A report from AARP can be found here -  Caregiving in the U.S. 2020 report 

Because COVID-19 reduced or eliminated in-person interaction the symptoms of anxiety disorder and depression, as well as serious consideration of suicide have been much higher for unpaid family caregivers than the public in general.
A report can be found here - Centers for Disease Control and Prevention (CDC) report 


Resources to Help Support Caregivers at this Time
● AARP offers various resources such as articles and tips about family caregiving. Learn more at www.aarp.org/caregiving.
● The Institute on Aging Friendship Line at 1-800-971-0016 is a 24-hour toll free accredited crisis line for people 60 and older.
● 211 is a resource hotline for referrals to human, health, and social service organizations. Call 211 from your phone.
● The Caregiver Action Network is also a great resource for helpful information. Check them out at caregiveraction.org/covid-19 or call their front desk at 855-227-3640.


Are You a Caregiver for a Loved One?
If you care for a loved one, it is wise to plan in advance. Nursing homes average $10,000-$12,000 per month, which can be financially catastrophic.

Asset Protection and Medicaid Planning is the process of protecting your assets from having to be spent for long term care costs while also helping ensure that you or your loved one get the best possible care and maintain the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home.

Please call us to make an appointment for a no-cost initial consultation:    855.471.6771      [email protected]

Delaware Medicaid Estate Recovery, How Can We Avoid It?
​By Paul Lorrah


​It is an unfortunate reality of aging, if we live long enough most of us will eventually have a chronic condition or illness that requires us to have assistance with our daily living or health, known as Long-Term Care.

How Can My Parents Preserve Their Savings If One Must Enter A Nursing Home
By: Paul Lorrah


How will we pay for the cost of long-term care? 
With rare exceptions, Medicare does not pay for the cost of long-term care. At most, on certain occasions it will pay for only a portion of your stay and only for a limited time. Long-term care insurance can be expensive, and it may be difficult to obtain. Medicaid is a medical assistance program that will help you pay the cost of long-term care once you qualify. Veterans aid and attendance benefits are available to Veteran's and their spouses.
 
Planning ahead is the best way to preserve assets from the high cost of nursing homes and long-term care.  A solid asset protection plan will allow your parents to protect their savings and home for each other. In the event one spouse must enter a nursing home, the other spouse's quality of life must be protected.
 
Long-term care costs continue to rise each year. According to Genworth's cost of care, the average for at-home care is $4,100/month, assisted living is $3,800/month and skilled nursing is $7,200/month for a shared room, and depending upon the state that you live in it can be much higher.  We have offices in Delaware, Maryland, Pennsylvania and New Jersey - each of those states have much higher averages with skilled nursing as much as $12,000 per month.
 
At those rates, the average family will deplete their savings very quickly and the last thing anyone wants to do is leave their spouse broke with no means of support.
 
What can we do?
A solid Asset Protection Plan is essential in today's world. An asset protection plan will allow you to preserve your savings, investment, life insurance and most important, your home.
 
What makes this plan most effective is when you combine it with the medical assistance programs that are available such as Medicaid and Veterans benefits. Both of these programs have financial eligibility requirements, however when a proper plan is in place, when the time comes for a spouse to require long-term care services on paper, they will qualify for these programs, but in reality they will still have all of their savings and home tucked away in an Asset Protection Trust.
 
If planning ahead, single individual can enjoy all of the same protection techniques available to married couples.
 
What if we didn't plan ahead?
Many of our clients come to us with a loved one needing long term care who didn't plan ahead, and although there are still many techniques available to preserve some of the assets, the cold hard truth is that in most cases you will not be able to preserve all of the assets. So, if you did not plan ahead, please call us, there are still options available to you, but my no means is that a reason to neglect planning ahead if you still have time.
 
What do you mean by planning ahead?
If your plan is to utilize the Medicaid program, there is a 60 month "look-back period"  [30 months in California] which means the Medicaid agency will examine all of the applicant's financial records for the previous 60 months from the day the application is submitted. Because of that, you want to put a solid plan in place at least 60 months before you will actually need long-term care. Now we can't always predict when we will need long term care but a plan that is put into place before an individual is actually receiving long term care or just as they begin needing a very low level of assistance will usually survive the 60 month period and this will also depend on a person's current savings and income.
 
Does Medicaid have an estate recovery?
Yes. What this means is, if an individual passes away after receiving  Medicaid benefits the Medicaid agency will pursue reimbursement for those benefits paid on behalf of that individual. So, if John was receiving Medicaid benefits to pay his nursing home costs of $5,000 per month and e passes after 1 year, the Medicaid agency will attempt to recoup that amount [$60,000] from his estate. If John owned a home with his spouse, the Medicaid agency may place a lien on their home in that amount. However, it John and his spouse had pre-planned and placed their home in a Medicaid Asset Protection Trust, it would be safe from estate recovery as well as all of their other assets.
​

​If you have a loved one that is receiving or may need some level of care or assistance, please contact us today to learn how to preserve their savings, income and house for their spouse and family.

​Caring for aging parents? ​By protecting assets, you may be able to qualify them for Medicaid which will pay their care costs in an assisted living or nursing home in New Jersey and Delaware.

Read these tips for protecting your assets from nursing home costs.

Did you know that more than 70% of seniors will need long-term care assistance at some point in his or her life? Illnesses, disabilities, or a severe cognitive impairment, like dementia, often keeps people from living independently. Because of this, many seniors need help with basic self-care tasks.

The government program that pays for nursing home or assisted living care is called Medicaid. This federal and state medical program is for those who meet certain asset and income levels. Rules differ by state, New Jersey and Delaware Medicaid planning requires in depth knowledge of the state rules due to the very strict income and asset guidelines, however, by employing certain strategies to structure your assets, you may be able to qualify for Medicaid nursing home benefits sooner than expected and shelter some of your family's hard earned savings.

                          Frequently asked questions about protecting assets from nursing home costs

Can you really protect your assets from the high cost of nursing home care?
Yes, the strategies used for Medicaid planning in New Jersey and Delaware and the amounts protected will depend on things such as, your marital status, whether you are already in a nursing home, how your assets are structures and others. Both single individuals and married couples can own some property and still be eligible for Medicaid. There are trusts, financial products and other legal ways to protect your assets depending upon what stage of planning you are in due to the 5 year look back period that Medicaid has. 

Is my house protected?
Yes, for the most part a Medicaid applicant can retain a principal residence, which is exempt property. Rules differ for single and married applicant's and equity values differ by state. In New Jersey the Medicaid equity limit for a primary residence is $828,000 in Delaware it is $525,00.

Can I transfer or Gift my assets?
Yes, but only under certain strict guidelines such as a spouse or disabled child. Transfers or gifts without the supervision of a qualified specialist should not be done, ever.
 
Why you should hire an attorney to help you?
With advanced planning, many people have been able to protect their home and assets from expensive nursing home costs. IN New Jersey and Delaware Medicaid planning These strategies for protecting your assets from nursing home costs are best handled by an elder law attorney. Since certain planning options may be better for your family than others, it’s important to speak with a knowledgeable elder law attorney to figure out the best option for you and your family.

Questions about Medicaid planning and asset protection in Delaware or New Jersey?  Contact us today! 855.471.6771