Oak Lawn Estate Planning | Medicaid Planning

You may anticipate that you or a loved one will have to go into a nursing home in the future. You are worried about how you are going to pay for nursing home care. You know it costs between $4,000 and $7,000 a month.  This cost is well beyond the means that most families have saved to cover their medical needs. At $84,000 a year, most families can not keep up with the rising long term care costs. I have already spoken on the benefits of Long Term Care Insurance in an earlier post with a follow up on Long Term Care Insurance in this post. The problem may arise if you are too late to apply for long term care insurance. Long term care insurance is mostly for those who are health now. If you did not get insurance, medicaid planning is the method for you.

Medicaid planning is a very technical type of planning. I will start off the section on Medicaid planning with this warning, you should consult a professional before doing any type of asset transfer. I know you may be skeptical because I am a professional who does Medicaid Planning, but rest assured there is a good reason to go to a professional on this area. If you improperly transfer assets, you could be penalized for up to three times the amount of the asset transfer. This penalty is converted into a period of time and you will be excluded from Medicaid benefits for that many months. The purpose of this post is not to talk about the penalty for an improper asset transfer, but know that the penalty is much greater than it probably should be.

So how does Medicaid planning work? There are assets that are exempt and non-exempt. In order to qualify, you must have a total of non-exempt assets that are below the threshold allowable by Medicaid. This threshold is state specific because each state administrates the federal Medicaid program In Illinois, the Spousal Impoverishment Act allows a community spouse to keep $109,560 in non-exempt assets. It also allows a community spouse to earn a monthly income of $2,739 without having to contribute any of their income to the cared for spouses bills. There are some ways to ensure that your community assets meet this level, but the order of asset transfer must be precise and exact. An "auditor" for Medicaid will look back on any transaction that is made that transfer assets for the five years preceding the application to Medicaid or entry into a nursing home. The key for qualification to medicaid if to transfer assets from non-exempt property to exempt property in a method and manner that will not disqualify you from Medicaid benefits. The problem is if you transfer property in an improper manner, even if the ultimate goal is a proper asset transfer, you will suffer a severe penalty from Medicaid.

The other aspect of Medicaid planning is timely action. If you plan for Medicaid five or more years before you will need it, you will have many more options for transferring your money. You will have a myriad of trusts available to you .These trusts can transfer your assets to anyone you choose. You will not be limited to your spouse or disabled adult children. This is a big advantage for many reasons. You may not have any disabled children and you want to take advantage of tax breaks when giving money to your family. Additionally, you are not limited and under scrutiny with what you do with the money you earned.

If you would like to speak to a professional about Medicaid planning, call me at:

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60453
(708) 529-7794

Oak Lawn Estate Planning | More on Long Term Care Insurance

In yesterdays post, I told you how having long term care insurance is one aspect of Estate Planning that is often overlooked. Today I will answe the top five questions I recieve about long term care insurance.

1. What are the odds I will need long term care? The answer is it is probably prettly likely you will need to pay for some long term care. As advances in medical technology increase the average age of the population, the numbers of individuals that that need long term care in increasing by leaps and bounds. A good number of individuals now have major surgery sometime throughout their lives and need to stay at a nursing home or need substantial help to stay at home.

2. Where can long term care services take place? A big falacy is that you must go into a nursing home to get long term care. This is not the facts. You can recieve long term care in a nursing home if you choose, but it is also available in your home or in a community living complex. There is a good deal of flexibility in where your care can take place. It is nice to know that you can be cared for in the comfort and privacy of your own home.

3. Aren't I covered by my medical insurance? As a general rule you are not. Long term care normally is not classified as medical treatment. Insurance companies usually do not cover the type of care that is needed. Hospice might be covered by your medical insurer but general long term care is not.

4. Can't I spend my savings on my care? Of course you can. There is no reason you shouldn't spend all of the money you saved your entire life on caring for yourself. In fact, I would encourage paying your own way and not being a burden on the Government. My suggestion is to purchase the proper insurance to achieve the same results, but still retain your assets. That way you can leave them to your children or favorite chairity. Or if nothing else, you can spend it on your hobby of collecting rare baseball cards.

5. So how does long term care insurance work again? There is a major difference between these two concepts, Medical Care and Activities of Daily Living (ALD). Long term care helps you pay for the ALD's you need when you are sick and recovering. You will need someone to help you get dressed in the morning, make breakfast, clean up after yourself, etc. These are not considered medical treatments but still are necessary to maintin a basic standard of living. Medical care pays for drugs and shots. Long terms care pays for lifes activities, and not just the fun ones.

 I hope this helps you understand the benefits of long term care insurance. Please consider it in your estate planning and call the Law Office of Jonathan W. Cole to get an estate plan in place.

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60463
(708) 529-7794

Oak Lawn Estate Planning | Long Term Care Insurance

You are probaby asking yourself, "Why is an attorney talking about insurance?" I thought attorneys estate planing was all about Wills, Trusts, Powers of Attorney, and eligibility for State and Federal programs. That may be true for most attorneys, but to have a real comprehensive plan your attorney should consider every aspect of your future. This includes your life insurance, health insurance, IRA and pension, title of your home, finacial future of your children and even your long term care. If your attorney is leaving out a portion of your future, how can you trust him or her to help you plan.

 You future planning is like a boat. You need everything to be right before your boat leaves the dock. Only a fool would have a great hull on a boat but leave without a motor. No one in their right mind would leave the dock without fule for their engine. Who would like to be on the sea with no fresh water? Obviously, no one would think of heading out into the sea with this type of preperation. So why would you accept only partial planning for your future.

Now you know that a comprehensive Estate Plan includes long term care insurance, but what is long term care insurance. The nutshell version of long term care insurance is that it provides funds for you if you become incapacatated and can not take care of yourself. This insurance does not just apply to the elderly. If you were in an accident and needed to be cared for 24 hours a day for a couple years while you are recovering, long term care insurance will cover it. If you develop a disease where you need help injecting yourself and getting dressed. Long term care insurance will cover it. I could go on and on about the benefits of long term care insurance, but I will give you this fact and let you think about it until my next post. The national average annual cost of a private room in a nursing home is over $79,000.00 a year. That is $217 dollars a day. This type of expenditure can quicky depleate the asses of any size estate. Especially if you multiply this cost by two for a married couple.If you would like to have an estate to leave your children, consider long term care insurance as an integral part of your estate plan. Look for more about long term care insurance in upcoming posts.

 If you would like to know more about how to start your own estate plan. Call the Law Office of Jonathan W. Cole to find out how a will trust and power of attorney can get you on the right tract for the future.

Law Office of Jonathan W. Cole
5013 W. 95th St.
Oak Lawn, IL 60463
(708) 529-7794