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PROBATING A WILL: Elder Law Report Unplugged

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PROBATING A WILL: Elder Law Report Unplugged – First Episode of a 6 part educational series. Tune in every Friday at 10am on FB and Insta.

Alzheimer’s & Dementia… When is enough, enough?

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Alzheimer’s & Dementia… When is enough, enough? A tough question I and clients have struggled with lately. No easy answer here. Healthcare POAs and Living Wills don’t function the same in this situation. Should they?

Medicaid Divorce: Maybe . . . Maybe Not.

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Harry and Wanda got married late in life. This was their second marriage, and both had children from the prior marriages. The couple wanted their children to inherit from their respective parents, so Harry and Wanda signed a prenuptial agreement to keep their property clearly separated.

 

Unfortunately, Harry was then diagnosed with Alzheimer’s. Medical bills piled up, his condition worsened, and soon Wanda was no longer able to care for him at home. But the cost of nursing-home care was formidable.

 

The Medicaid program is designed to help pay for that staggering cost. However, before a couple can be eligible, the rules require that the assets of both spouses are counted to pay for the care of one, even if only one spouse needs the care. Prenuptial agreements do not matter. The Medicaid rules count the assets of both spouses together. Wanda would be permitted to keep some of her property for her own use – but this would not be enough for her to maintain her standard of living, pay for her retirement, and still leave enough for Wanda’s children to inherit.

 

Image result for medicaidWanda heard that divorce might solve this dilemma. The couple’s assets would get separated in the divorce proceedings and, after that, only the property designated as Harry’s would be applied to the cost of his care. He would spend that down, Medicaid would then step in, and Wanda’s share would remain her own.

 

But Wanda didn’t like the idea of a divorce that would be only “on paper,” because she had no intention of deserting Harry in his time of need. Harry’s children weren’t happy, either. And if the divorce was going to work as intended, the couple should probably consult not just one but three professionals – an elder law attorney, a financial planner, and a divorce lawyer.

 

But this plan would involve expense, possible family unrest, and uncertainty as to whether a court would approve the plan. The divorce strategy comes with significant downsides.

 

Early planning is best, to consult an elder law attorney at least five years before the need for Medicaid arrives. If that is not possible, an experienced elder law attorney can find other, less-fraught ways than divorce.

 

Early planning if possible, though, is always best. If we can be of assistance, please don’t hesitate to reach out.

Greg McIntyre

greg@mcelderlaw.com

Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street

Shelby, NC 28150

704–259–7040

Making the Most of The Time You Have: Hayden Soloway talks candidly about making the most of the…

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Making the Most of The Time You Have: Hayden Soloway talks candidly about making the most of the time you have with the ones you love. Hayden shares personal stories from her experience with her father and how they made the most of the time they had together. Hayden offers ideas on how you can do the same. #ElderLawReport
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#estateplanning
#planningahead
#nursinghomecare
#hospice

Creative Financial Approaches to Long Term Care Services

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Long term care insurance was sold aggressively in the 1980s, 90s and thereafter to offset the costs of seniors needing to live in a nursing home, assisted living or needing at home health care. Now, however, the business of long term care insurance has dramatically changed. What was once over 100 insurers providing LTC policy for sale has shrunk to a pool of less than twenty insurers who continue to sell the health care product. The big financial problem was that the majority of insurers had badly underestimated the longevity of these long term care policy holders and how many claims would be filed during their lifetime. The model became unsustainable from a business perspective.

As reported by the Wall Street Journal (https://www.wsj.com/articles/millions-bought-insurance-to-cover-retirement-health-costs-now-they-face-an-awful-choice-1516206708) the industry is now in financial turmoil and has turned to the old adage of privatize the gains and socialize the losses; the translation being that millions of people age sixty-five or older with long term care policies are facing steep rate increases. It is not uncommon for a policy holder to face a fifty percent increase in their premium while some of the worst cases are upwards of ninety percent. Because the industry itself used such poor benchmarks and miscalculated projections, policy holders are seemingly left with two choices: Pay the money or leave your coverage after paying into it for years, and sometimes decades.

What if you want a different choice? Everyone would agree that being priced gouged for premiums as you age is inherently unconscionable but if the policy is discontinued what then will happen to the peace of mind long term care brings? What was once the safety net of senior aging care (without becoming a burden to family members) is rapidly disappearing.

CNBC has recently reported about this very issue and suggests getting financially creative for long term care. (https://www.cnbc.com/2018/02/27/heres-a-surprise-source-you-can-tap-for-long-term-care-services.html) There is a surprising source that you can tap in order to maintain protection for yourself but it requires planning, professional help and time. Do not delay.

The financially creative premise is to become asset poor, impoverished, and qualify for Medicaid which pays for nursing home care and services. This does not mean the legacy you built during your lifetime will not go to your selected inheritors. On the contrary the assets you own must move out of your name to qualify for Medicaid. The assets will then shift to your designated beneficiary since to qualify you as an individual cannot have over $2,000 in assets.

To begin you will need to retain the services of a qualified elder law attorney, who may also bring in an accountant and a financial advisor. Ideally, you will be able to wait five years before needing long term care and the help of Medicaid. If there are assets transferred during the “five year lookback” it may be subject to penalties or make the applicant ineligible for some period of time requiring them to pay out of pocket.

Now with time on your side it becomes critical to select the right vehicle for transfer. These can be annuities but more often tend to be irrevocable trusts. The assets in the irrevocable trust are no longer under the control of the older person and can provide protection from certain creditors. The vehicle chosen for transfer of assets is very important not only for the older individual but the recipient as well. In the case of an outright gift of appreciated assets (i.e. stocks or real property) there would be no stepped up cost basis which could lead to crushing capital gains taxes when it is time to sell. An elder law attorney with input from your accountant and financial planner can help you choose the right transfer of wealth plan.

Elder law attorneys are closely watching changes in Medicaid,, as Congress is often proposing legislation to change the program.. Be certain your elder law attorney is up to speed on the current requirements, as the eligibility requirements can change very quickly in each state, and sometimes each county.

Though you may never have thought you would find yourself creatively trying to qualify for Medicaid while protecting assets, the current long term care premium prices preclude a large portion of seniors from being able to pay the cost of the policy. Genworth Financial reports the national median cost of a private nursing home room to be $97,455 a year. It doesn’t take long to be wiped out at that cost without long term care. Medicaid may be your solution and time is of the essence for planning.

Contact our office today and schedule an appointment to discuss how we can help you with your planning.

 

Greg McIntyre

greg@mcelderlaw.com

Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street

Shelby, NC 28150

704–259–7040

IDENTITY THEFT! It is a reality we live with today. Seniors are especially susceptible.

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IDENTITY THEFT! It is a reality we live with today. Seniors are especially susceptible. In this Elder Law Report, Greg & Hayden call an identity theft provider and ask questions. We plan to bring our clients a discount to these services.
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#ElderLawReport
#assistedliving
#independentliving
#longtermcare
#activities
#estateplanning
#assetprotection
#assetpreservation
#elderlaw
#savingthefarm
#hometownheroes
#identitytheft

Success!!! Great Education Breakfast this morning…

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Great group to of folks today and great discussion and conversations about the 2018 tax laws and other important issues. Call our office to sign up for next month’s topic. 704-259-7040.

ALEXA HELPING SENIORS?

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ALEXA HELPING SENIORS? That’s exactly what we explore in this Elder Law Report. Amazing some of the ways this little device can help with reminders, locking the house and turning on and off the lights (among many other things).
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#seniors
#care
#qualityoflife
#elderlaw
#estateplanning

GAME SHOW EPISODE

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GAME SHOW EPISODE: Learn about Estate Planning, Elder Law and the firm in today’s game show episode of the MEL Feud. So much fun today!

Three Questions “The Elder Law Guy” gets asked the most:

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1. If I Don’t Have Debt, Should I Still Worry?

Does not having debt protect you?

A lady and her husband were shrewd, with little or no debt. They lived right, had rental houses, paid everything in cash with no mortgages.

Question: Did they have to worry?

If you or your husband have a long-term care event costing $75 to $100,000 per year, will that dent your finances?

Are the rental houses, bank account, savings going to be okay?

No.

At that rate of spend-down, it’ll be hard maintaining your lifestyle.

So what can you do? Separate the liability with the rental houses and your personal income.

That way if the renter sues, it wouldn’t come back against your personal assets.

Separate your business liability. Maybe set-up an LLC and put all rental houses in it.

Separate it so your house, car, savings can’t be attacked.

How many layers of protection can you add? It’s up to you. The more layers, the more exhaustive to another plaintiff’s attorney to get at your nest egg and assets.

Another consideration is using an Irrevocable Asset Protection Trust to protect assets from a healthcare crisis requiring long-term care?

2. What If My Attorney-In-Fact Predeceases Me?

If the attorney-in-fact under a Power of Attorney passes away before you, then it ceases to have any power… unless you have appointed within the document second or third backup agents to serve as your attorney-in-fact. Think about it. If a player fouls out of the game you always want players on the bench to take their place.

3. I Already Have A Will…

People think they’re protected with a Will.

A will is great but can be a dangerous place to pass property.

If we’re passing your home through your will and open it to a probate estate in court, you must go to the courthouse, pay to open the estate, publish it in the paper, and wait 90 days (at least). That’s when liens such as Medicaid liens which may have paid for long-term care during your lifetime attach and force the sale of that property to pay that lien.

For information about other ways to easily avoid probate with real property (land/homes) and liquid assets (money/investments) contact:

Greg McIntyre

greg@mcelderlaw.com

Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street

Shelby, NC 28150

704–259–7040

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