by Bill Miller | Nov 4, 2019 | Blog
The month of November is here. This means for Alabama seniors, and those who are Medicare beneficiaries, it is time for the annual Medicare Open Enrollment period.
This is the time of year when you may update, change, or find new coverage for yourself as a Medicare beneficiary.
This annual time occurs from October 15th through December 7th. It is critical for seniors and their loved ones to pay attention during this time as there are limited opportunities to change Medicare coverage outside this window of time .
Despite all the information surrounding the Medicare Open Enrollment period, many seniors and their loved ones are still surprised to learn what Medicare does not cover. During this time of year, every Medicare beneficiary needs to learn the ins and outs of his or her existing plan and verify if there are changes to coverage, providers, medications, co-pays, and other plan facets that could impact their health care circumstances.
Medicare has created a number of resources to help you during this time that you may access by clicking this link to the Medicare website.
What may be most important to know, however, is that in almost all circumstances Medicare will not pay for the cost of long-term care. The reason why is because Medicare is designed to be an acute payor system. Long-term care, and the associated costs, do not fit within this model. This means that for many seniors, who are counting on Medicare to help defray the cost of long-term care in the future, are not prepared for what the future holds.
How will you pay for long-term care should you need it in the future? Let us share some of the options available for you to pay for long-term care should you need it.
- Self financing and potential impoverishment. Long-term care inside or outside the home can cost thousands of dollars each month. Most families do not have it in their monthly budget or in their savings to be able to indefinitely afford this type of care. Yet, that is the situation many Alabama seniors are facing without advance planning. This is just one of the reasons why you need to meet with an elder law attorney as soon as possible so he or she can help you navigate this challenge.
- VA Pension. This is one of the benefits from the Department of Veterans Affairs that has nothing to do with disability or injury. Instead of being based on a compensation system, this is a monthly, tax-free benefit available to all veterans and their dependents should they meet a service record, health, income, and asset test. It may be used to help pay for the cost of long-term care. The qualification process was changed in October of last year and this is something you may also want to discuss with your elder law attorney.
- Medicaid. The Medicaid program exists to help seniors and their loved ones be able to afford the high cost of long-term care, such as care in a skilled nursing facility. To access these services there is, again, a health, income, and asset test associated and you will want to speak with your elder law attorney as soon as possible.
The first place to start is understanding what your existing health care coverage will or will not provide during this annual Medicare Open Enrollment time. Once you select the right plan for you for the next year, do not wait to schedule a meeting with an elder law attorney who can guide you through the complications that arise from the need to pay for long-term care. We encourage you not to wait to find the answers you need. Schedule a meeting with attorney William Miller at your earliest convenience.
by Bill Miller | Oct 21, 2019 | Estate Planning
When did you last review your estate planning documents? If you prepared a complete plan, you probably signed a Will, a durable power of attorney, and an advanced directive. However, maybe you signed all these documents years ago and you don’t know if they still fit your lifestyle. Read on to learn the 3.5 reasons to change your estate plan.
Reason #1: Your Finances Have Changed
Estate planning strategies vary depending on your estate’s value. If your net worth has decreased or, hopefully, increased substantially since your last estate plan review, review your plan with your estate planning attorney.
Reason #2: Your Family Structure Has Changed
Major life events typically trigger a good ol’ estate plan review. Marriages, divorces, births, and death – they all dramatically alter your family. It’s likely your estate planning goals are different, too. For example, the birth of a new grandchild might get you started thinking about college savings plans or even just adding the newborn to your Will or trust.
Keep in mind that it is not only your Will that might need some alterations. For example, if you are divorced, did you name your spouse or in-laws as agents or personal representatives in your durable power of attorney or advanced directive? If so, it may be time to name new ones.
Reason #3: You Haven’t Reviewed Your Plan in a Long Time.
Even someone with a fairly simple, ordinary, easygoing life faces triumphs and trials. It’s likely that your life right now is not the same as it was a year ago . . . or five years ago . . . and so on. Has your estate plan kept up with your life?
Reason #3.5: The Tax Man
Okay, this is only a .5 for a good reason: most of us will not need to escape the federal estate tax burden. However, this does not mean that you should ignore estate, gift, and income tax consequences of your plan:
- Tax laws could change, making your plan out-of-date.
- Watch for state estate tax and inheritance tax if you own property in another state.
- If your estate will even come close to the federal estate tax exclusion of $11.18 million per person, adjust your estate plan accordingly.
- So, pay attention, review your plan for tax issues, and watch for tax laws to change.
There’s No Time Like the Present. If you have not reviewed your plan in many years, this is the time.
Make an appointment to have your estate plan reviewed or to finally have a new plan prepared.
The attorneys at Miller Estate and Elder Law understand the estate planning needs of their clients. Contact Bill Miller at 256-251-2137 to schedule an appointment. Though our office is now located at 818 Leighton Avenue in Anniston, we serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
Check out our website for information and free resources.
by Bill Miller | Oct 4, 2019 | Uncategorized
When Grandpa Joe died last year, his children assumed they could immediately take possession of his property – the family home and the fishing cabin down by the lake. They were dismayed to learn they had to wait until Grandpa Joe’s estate went through probate. Without some advance planning, there was no way to go about transferring property without probate.
Transferring property after the owner’s death often happens through probate.
When someone dies, their property passes to their heirs. If the deceased person left an estate plan, the whole process is typically easier than when there’s no Will. However, the personal representative of the estate cannot pass ownership of the property to the heirs until probate is completed. This can take months and, occasionally, years. It is simply not the best way to transfer property to your heirs. Fortunately, you have options that help you avoid or minimize your heirs’ probate nightmare.
There are ways to pass property without probate.
Estate planning is where you can make this happen, especially when your estate plans are coordinated with your financial plans. Some of the ways you can transfer your property more easily and quickly than probate include:
Property Titles. You can own property, particularly real estate, in several ways. For example, a married couple might choose to own their home through joint tenancy with right of survivorship. When one spouse dies, the other spouse takes full ownership of the home. Joint ownership can be tricky, so talk to your attorney before titling your property.
Beneficiary Designations. Financial institutions and insurers allow account holders to name beneficiaries. By completing a few forms, usually online now, you can make sure that funds remaining in your account and insurance payouts go directly to your heirs without becoming probate assets. Make sure you coordinate your beneficiary designations with your estate plan because beneficiary designations trump your Will.
Revocable Living Trust. This common trust is fairly easy to form and fund. The grantor signs a trust document prepared by an attorney, then transfers ownership of his or her property to the trust. When the grantor passes away, the assets transfer to beneficiaries based on the terms of the trust without going through probate.
Curious about estate planning and probate?
It helps to have an experienced, knowledgeable attorney at your side. For a free consultation with Attorney Bill Miller, contact us at 256-472-1900. Miller Estate and Elder Law is now located at 818 Leighton Avenue in Anniston, but we serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas. Also check our website for free resources like Seven Steps to Handling Your Loved One’s Estate.
by Bill Miller | Sep 30, 2019 | Blog, Long-Term Care, Medicaid
Did you know a Baby Boomer is a person who was born between 1946 and 1964?
This means the Boomer is now between the ages of 55 and 73. Unfortunately, the reality of the aging process is he or she could possibly be facing a greater potential need of skilled nursing home assistance in the future. While this is a future none of us want to contemplate at any time, it is important for Boomers to understand the possible need to pay for long-term care early on.
Perhaps the most concerning issue surrounds how Baby Boomers use their personal funds.
A well intended gift could both deprive them of the money they need to pay for care in the nursing home and penalize them in their attempt to access public benefits such as Medicaid. For example, did you know a Boomer’s choice to give money to help a child with unplanned family expenses or to help a grandchild with the high cost of college tuition could result in him or her being penalized for making a gift? This can be the exact situation the Boomer is facing if he or she makes gifts like these within five years of needing nursing home assistance, as there is a penalty for uncompensated transfers when applying for public benefits.
Gifts, or uncompensated transfers, are just one of the potential threats to the success of the application for public benefits. In these situations, the child or grandchild who received money from the Baby Boomer would likely need to be able to immediately repay the gift to avoid the application for public benefits being denied. Likewise, it is important that the Boomer who received a gift from an aging parent have ready access to cash to immediately repay the loan or gift.
How can Baby Boomers plan to provide for their loved ones and still maintain access to long-term care benefits?
One of the ways to do this successfully is to work with the Boomer’s elder law attorney to create a contract for services with a child or grandchild who is caring for the Baby Boomer at home or in a long-term care facility. Another way to effectively spend down excess resources is by purchasing non-countable assets.
Non-countable assets can include, but not be limited to, any of the following:
- A homestead having an equity interest less than state allowed amount after deducting the mortgage,
- A vehicle regardless of its age or value,
- The cash value of a whole life insurance policy having a face value of $2,500 or less,
- The full value of an irrevocable burial contract regardless of the amount contributed to the policy, and
- A $2,500 exclusion for the Boomer’s bank account that has been designated for burial expenses.
It is important for Baby Boomers to know that there are ways to successfully spend down their assets and still be eligible for nursing home expenses. While gifts, or uncompensated transfers, are just one of the potential threats to the success of the application for public benefits these are murky waters that need the guidance of an elder law attorney who understands the challenges Baby Boomers and their loved ones’ face. We encourage you not to wait to get the answers you need and to reach out to our office to schedule a meeting.
by Bill Miller | Sep 2, 2019 | Blog, Medicaid, Medicaid Qualification, Nursing Home
There is never a “right” time to enter a skilled nursing home. For most of us, we wish to live our lives in the comfort of our own homes and never have to contemplate a time when we would leave them because we need long-term care. Unfortunately, as we age, our needs, especially when it comes to our health, may not match what we want.
There may come a time when you or a loved one will need care outside the home. This could be due to a health care crisis, a cognitive decline, or for many other reasons. The question then changes to a more immediate issue: how will you be able to afford this care for your spouse in addition to your monthly bills?
Medicaid has a fixed amount of countable assets you are allowed to own and also receive Medicaid assistance.
What happens, then, should you have more than this amount? Did you know that in our state a Medicaid “spend down” of countable assets can be done to make sure the spouse entering into the skilled nursing facility is immediately eligible for Medicaid nursing home assistance? This is done because the spouse in a nursing home, often referred to as the “institutionalized spouse”, cannot own more than $2,000 in countable assets and the healthy or “community” spouse can only own countable assets that do not exceed $126,420.
A “spend down” scenario exists when the community spouse purchases assets that result in there being less cash or available assets that would otherwise disqualify the institutionalized spouse from Medicaid nursing home assistance. The “spend down” is accomplished by the community spouse paying for things that are allowed. For example, he or she could pay cash to improve his or her residence, pay off a credit card balance, or purchase a new automobile. There is no limitation on the ways in which a spend down can be accomplished. However, the spend down cannot result in a gift being made. This would constitute a penalty that would make the nursing home spouse ineligible for assistance.
The risk of a spend down is that the nursing home spouse may suddenly die. In such an event, the cash that could have available for the community spouse’s needs over the ensuing years of comfort may no longer be available for the community spouse’s medical or other emergency needs. There are alternatives to spending down. Rather than spending down the assets and subsequently not having the cash for emergencies, the community spouse should consider using the proceeds received through an allowed Medicaid strategy. For example, he or she could utilize a reverse mortgage on the residence to pay the nursing home costs rather than leaving the community spouse without sufficient funds for future expenses.
Another strategy could be creating a non-countable asset such as a Medicaid Qualifying Annuity.
This annuity can be owned by the community spouse, regardless of its value. This annuity must meet strict rules including being irrevocable, non-assignable, have no cash value, and payable over no more than the owner’s life expectancy. Since the community spouse may also eventually need long-term care, the community spouse’s purchasing a Medicaid Qualifying Annuity may be the best solution for protecting assets since the investment in the annuity, if not used for care, could be paid back to the community spouse and then be available for his or her subsequent long-term care.
We know this article may raise more questions than it answers. There is never a wrong time to plan for the potential need for long-term care in a skilled nursing facility and, often, pre-planning can help you achieve the strategies you need early on. Whether you are in a crisis or pre-planning today, know that we have solutions available for you. Do not wait to contact our firm and schedule a meeting to discuss your needs.
