long-term care planning options - starchapter..."planning strategies for accessing medicaid...

"Planning Strategies for Accessing Medicaid Benefits and VA Aid & Attendance Benefits"

September 28, 2016

by James Voeller & David Voeller -Voeller Law 1

Long-term Care Planning OptionsLong-term Care

Planning Options

The Voeller Law Firm210-651-3851

www.voellerlaw.com

• VA Pension with Aid and Attendance

• Medicaid

Potential Beneficiaries of VA Pension

United States Armed Forces Personnel who served and came back home:

WWII 15,000,000

Korean War 1,500,000

Vietnam War 3,000,000

Two Types of Disability Benefits

• Compensation

Service-Connection

Injured during Service

• Pension

A disability benefit for wartime Veterans

No Service-Connection

Means Tested


September 28, 2016


V.A. Disability Compensation

Veteran suffered a service connected injury

Veteran’s injury is rated as a percentage of loss 10%, 20%, 100%

• Disability compensation is not limited by Veteran’s income or assets

• Surviving Spouse/ Dependents may be eligible for Dependency and Indemnity Compensation (DIC)

V.A. Disability Compensation (cont.)

• Wartime veterans

• Surviving spouses of wartime veterans

The key is to qualify!

There Is Money Available For


September 28, 2016


Requirements for Extra Money

• Wartime Service (or widow of wartime Veteran)

• Medical expenses• Based on

household income and assets

Service RequirementsService Requirements

• Served at least 90 days of actual duty• Served at least one day during a war period• Other than dishonorable discharge

Wartime Veterans

Start EndWorld War II 12/07/1941 12/31/1946Korea 06/27/1950 12/31/1955Vietnam 08/05/1964 05/07/1975


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Age And Medical Criteria

• Permanently and totally disabled or over age 65

What “Housebound” Means

• Veteran is substantially confined to his or her dwelling and immediate premises

• Needs Assistance to leave home

What “Aid And Attendance” Means

• Needs assistance with 2 or more activities of daily living

• Examples:– Inability to feed yourself or prepare

meals for yourself – Inability to dress yourself– Inability to bathe/shower– Inability to toilet yourself– Inability to walk or get around– Inability to remember to take your

medications


September 28, 2016


Extra Money for Veterans

Married Wartime Veterans may be eligible for up to $2,120 per month

Extra Money for Single Veteran

A single Veteran may be eligible for up to $1789/month.

Extra Money for Spouses

A surviving spouse may be eligible for up

to $1149/month.


September 28, 2016


Married VeteranBasic Improved Pension - $1,404Housebound - $1,642Aid & Attendance - $2,120

Single VeteranBasic Improved Pension - $1,072Housebound - $1,310Aid & Attendance $1,789

WidowsBasic Improved Pension - $719Housebound - $877Aid & Attendance - $1,149

2016 Monthly VA Pension Rates

Determining Eligibility

Gross Household Income-Out of Pocket Medical*

Income Counted by the VA

Maximum Benefit-Income Counted by VABenefit Amount

*Includes assisted living, nursing home, in-home care, and even care provided by a family member.

CALCULATION OF AID & ATTENDANCE PENSION BENEFIT

Examples A B C D

Aid & Attendance Calculation

Gross Monthly Income $3,000 $3,000 $3,000 $3,000

Unreimbursed Medical Expenses (UME)

(880) (1,500) (3,000) (4,500)

Net Adjusted Income $2,120 $1,500 $ 0 $(1,500)

Maximum A&A-for Class (2,120) (2,120) (2,120) (2,120)

Monthly A&A payable $ 0 $ 620 $2,120 $2,120

Cash Flow

Gross Monthly Income $3,000 $3,000 $3,000 $3,000

UME (880) (1,500) (3,000) (4,500)

Monthly A&A payable 0 620 2,120 2,120

Net Cash Available for Other Uses $2,120 $2,120 $2,120 $ 620


September 28, 2016


Additional BenefitsAdditional Benefits

FREE VA medical (no co-pay) and FREE prescription through VA pharmacies for

formulary drugs

Limits On Net WorthLimits On Net Worth

Approximately $80,000 for a couple????????????

$40,000 for a single Veteranor surviving spouse

??????????

Assets We Don’t CountAssets We Don’t Count

Exempt Assets:

• House

• Autos

• Pre Paid Funeral Plan

• Term Life insurance


September 28, 2016


Determining How Much Is Too MuchDetermining How Much Is Too Much

“About 80,000”?

There is no exact limit, but we will do the analysis for you!

Any VA Penalty For Gifting Assets?

VA has no penalty period of ineligibilityfor gifting “excess” assets to other

family members*

Should I Give My Assets Away To Qualify?

“It Depends”

• It could jeopardize your Medicaid Benefits

• Penalty Period (60 month look-back)

• Loss of Control

For every complex problem there is an answer that is clear, simple, and wrong.


September 28, 2016


VA Asset Protection Trust (VAPT)




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• Set aside assets for beneficiaries

• Protected from beneficiary’s liabilities

• Maintain control - change trustee

• Maintain control – change beneficiaries

• Protect proceeds from the sale of a residence

• Still get an adjusted basis of assets upon death

• Continuity of Investment Management – connect to next

generation

Medicaid


September 28, 2016


Medicaid

• Medicaid vs Medicare

• Medicare

• Health insurance

• Paid through deduction from wages/SS benefits

• Pays for doctor visits, hospital stays, medical devises, up

to 100 days of rehab.

Medicaid


• Medicaid

• Pays for Long Term Nursing Home care and in some cases, in-

home and assisted living care.

• You keep $60/mo, pay the rest of your income, and

Medicaid pays the rest

• Federal/State partnership

Medicaid


• Medicaid

• You pay into the system through general state and Federal

taxes

• Means tested benefits (income and asset are considered)


September 28, 2016


Medicaid

• Medicaid Misconceptions:

• Means Testing = You have to spend all your money until

you’re broke

• The nursing home will take mom’s house

• Nursing homes that accept Medicaid are sub-standard

Medicaid

• Medicaid Concepts:

• Means Testing

• Miller Trust

• 5 Year Look-Back

• Medicaid Estate Recovery

• Lady-Bird Deed

Medicaid

• Means-Testing:

• House

• Car

• $2,000

• A few miscellaneous items

• If married, spouse gets to keep ½ of your assets up to

$119,300

• Income cap for Medicaid Recipient


September 28, 2016


Medicaid

• Income cap:

• $2,199/mo

• Avoid Income cap using “Miller Trust”

• Applies to income only – does not hold or exempt

assets

• Funnels excess income over the cap to nursing home

• Miller Trust makes income cap a non-issue

Medicaid

• 5 year look-back

• Must disclose gifts made in the last 5 years

• Fair Market Value of asset – YOU CAN’T SELL THE HOUSE

FOR $1!

• Gifts are exempt between spouses

• Gifts subject to penalty = number of days you have to pay

• Gift amount / 162.41 (daily rate) = number of days you

have to private pay

• Ill advised gift of $100k = 615.72 days penalty

Medicaid

• Medicaid Estate Recovery Program (MERP)

• Medicaid has the right to recover from your probate

estate for any amount they have paid on your behalf


September 28, 2016


Medicaid

• A Few Strategies

• Exchange of Non-Exempt Asset for Exempt Assets

• Sale of Property

• Medicaid Compliant, Short-term single premium

immediate Annuity

• QDRO and IRA Annuity

Medicaid

• Through proper planning and good advice, 60-100% of assets

can usually be preserved.

• Complete spend down is only the result of bad advice

• Having foundational estate planning in advance (trust, powers

of attorney, etc.) is key to being able to take advantage of VA

and Medicaid planning strategies

The Voeller Law Firm210-651-3851

www.voellerlaw.com

Thank You!

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