Massachusetts Estate Planning & Asset Protection Blog

What will 2017 bring to Seniors and Persons with Disabilities? - Part II

Posted by Dennis Sullivan & Associates on Tue, Jan 24, 2017

What will 2017 bring to Seniors and Persons with Disabilities? - Part II

In last week's blog 'What will 2017 Bring to Seniors and Persons with Disabilities? - Part I' we discussed some of the key issues to watch out for in 2017 including Medicare and Medicaid reform. In Part II of the blog we continue our review of potential impacts on legislation that affects seniors and persons with disabilities.

supreme_court.jpg

Affordable Care Act

Republicans are already moving to repeal and replace Obamacare. The question is: How much will be repealed? There are several programs included in the ACA, not related to traditional health insurance, that are important to elder law attorneys and their clients. For example, Medicaid expansion, a kind of Medicaid reform, is part of the ACA.

The ACA also includes programs that work toward ending the institutional bias in Medicaid. One is Community First Choice, a state plan that provides home- and community-based services. Currently it has an extremely low-income threshold so it’s a limited population, but it’s a start.

Another is Money Follows the Person, which pays for transition services. For example, it could provide extra funds to help someone leave a nursing home, by paying for a housing coordinator to find an apartment, a roommate, buy basic furniture and so on.

We are moving toward home- and community-based service, which many people favor. How will that interact with Medicaid reforms? Because they are optional, some fear that with per capita caps, these services will be among the first to go. There may be more opportunities to expand these services through block grants because they allow more flexibility in what is offered. Along this line, Senator Chuck Schumer (D-NY) has introduced a bill called the Disability Integration Act, which would make home- and community-based services a civil right.

Other Medicaid-Related Issues to Watch

Limiting home equity: This proposal, H.R. 1361, would take away the state option to expand the cap for single individual home owners. It would not impact people who have a community spouse living in the home or if you have a disabled child or a dependent under 21. 

Medical liability reform: This could impact whether individuals get adequate access to personal injury settlements and funds that can be put into a special needs trust.

Long-Term Care Reform

There has been a lot of discussion on Capitol Hill about picking up the pieces on long-term care. After a decade, the market has completely collapsed. John Hancock just withdrew, and Genworth was bought out by a Chinese private equity firm. Republicans and Democrats agree on the problem, but there doesn’t seem to be common ground yet on a solution. The Senate Aging Committee is starting the process, which is a positive step. There are calls for catastrophic coverage, at least on the back end, and probably some sort of front-end coverage for two or three years. There may be some long-term care reform as part of Medicaid reform.

VA Benefit Rules

The new rules have been delayed again until at least April, 2017. Fixing the VA is a Trump priority. An important piece to what will happen with the VA is who Trump names to head the VA and Veterans Benefit Administration (VBA). 

Nursing home binding arbitration rules

Nursing homes must comply with binding arbitration rules to have access to Medicare or Medicaid funds. NAELA has been working with others to push CMS to ban pre-dispute binding arbitration. The for-profit nursing home industry association is fighting it and recently won a preliminary injunction in a Mississippi district court (American Health Care Association et al v. Burwell). We do not yet know if the Trump Administration will appeal this ruling and continue with banning binding arbitration for nursing home contracts. 

In Kindred Nursing Centers Limited Partnership v. Clark in Kentucky, the issue is whether federal arbitration acts overrule the state’s arbitration acts. The state of Kentucky has a law that says in order to waive the principal’s constitutional right to a jury trial, the agent must be given that specific authority within the power of attorney. Whether this is overturned is likely to hinge on President Trump’s pick to fill Justice Scalia’s vacancy on the Supreme Court.

 Conclusion

There are a number of issues that will be addressed in 2017 that can have significant impact on seniors and their loved ones, Veterans, and persons with disabilities. If you have questions or would like to discuss any of the issues raised here, please don’t hesitate to contact us.

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

 

Tags: disabled, seniors, Affordable Health Care Act, Veteran, VA benefits, VA, Medicaid, Nursing Home, Estate Planning, Elder Law, elder care, New estate tax law, new regulations, trusts, Nursing Home Costs, social security

What will 2017 bring to Seniors and Persons with Disabilities? - Part I

Posted by Dennis Sullivan & Associates on Thu, Jan 19, 2017

What will 2017 bring to Seniors and Persons with Disabilities? - Part I

washingtondc.jpg

Donald Trump’s election and Republican majorities in both houses of Congress surprised much of the nation. With control of legislative and executive branches of government, the expectation is Republicans will finally be able to push through long-awaited legislation, as well as follow through on promises made by candidate Trump. And they are expected to move quickly.

We will summarize some key issues to watch out for in 2017 that affect seniors and persons with disabilities and continue to provide updates throughout the year.

What the Election Outcome Means in Congress

The House has remained in Republican control—about 45% Democrat and 55% Republican. The majority rules, so while the Democrats may have loud opposition, they don’t have a lot of power. Currently, Republicans are mostly united, but those in the Freedom Caucus (Tea Party Republicans) are deciding how they will interact with the Republican establishment. If they split, votes may be needed from Democrats to pass legislation.

The Senate is 48 Democrats and 52 Republicans. 60 votes are needed to prevent a filibuster (where senators can talk for hours and delay votes). But with budget reconciliation, only a simple majority (51) is needed to pass legislation in the Senate. Because they are all budget-related programs, the Republicans will try to reform Medicaid, Medicare and the Affordable Care Act (Obamacare) through budget reconciliation. Individual Republican senators will have a lot of power, as some may insist on additions or deletions to secure their vote. If the Republicans do not stick together for the majority, votes may be needed from Democrats. (Note: Budget reconciliation was used to pass the Deficit Reduction Act of 2005 and OBRA 93, which enacted big cuts that changed elder law—the lengthening of the transfer penalty, the change in the time of when that penalty applies, the move from trust.)

One thing to watch is who is going to run Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS) and the Social Security Administration, especially considering how much is related to Supplemental Security Income (SSI). The people now in charge of staffing these agencies are conservative. For example, the person in charge of staffing the political positions at the Social Security Administration has called for privatizing Social Security in the past. Donald Trump has repeatedly said he doesn’t want to change Medicare and Social Security, but that may be changing. (See below.)

Tax Policy

Tax changes are expected as part of the budget reconciliation process. We are not sure yet if 2017 will bring major tax reform or just tax cuts, but tax rates are expected to decrease for both individuals and businesses. Candidate Trump called for elder care and child care tax deductions and/or credits. He has also stated his plan to eliminate the federal estate tax, then charge capital gains tax on everything over $10 million, with exemptions for family farms and small businesses.

We may also see some changes to the ABLE Act (Achieving a Better Life Experience), which passed in December 2014 and amended Section 529 Plans. Currently, ABLE allows people with disabilities developed before the age of 26 and their families to set up tax-exempt savings accounts, which can be used to cover qualified disability expenses such as, but not limited to, education, housing and transportation. Revisions in 2017 may raise the age to 46, allow those working to put in more money, and allow rollovers of these accounts. 

Medicare Reform

President-elect Trump started by saying he was going to protect Medicare and Social Security. After meeting with House Speaker Paul Ryan, he said he will modernize Medicare. Reince Priebus, incoming chief of staff, recently insisted that Mr. Trump won’t meddle with Medicare or Social Security. Instead, he has said he will focus on 1) improving the economy, which will reduce the debt and ease entitlement concerns and 2) save Medicaid, Medicare and Social Security without cuts while eliminating fraud, waste and abuse. 

But he is already encountering resistance from Republicans, who for years have claimed that a major overhaul to Medicare and other entitlements are needed to ensure they don’t go bankrupt; that entitlement reform is critical to reducing debt; and the longer they wait, the harder it becomes to solve the problems. Obama administration officials warned just last year that a central Medicare trust fund is projected to run out of money by 2028.

Yet Republicans are also encouraged by what some of the President-Elect’s Cabinet picks could mean for future entitlement reform. Representative Tom Price (R-GA), who replaced Paul Ryan as Budget chairman and sought to overhaul entitlement programs, is Trump’s pick for Health and Human Services secretary. Representative Mick Mulvaney (R-SC), a fiscal hawk and Freedom Caucus co-founder, will lead his White House budget office.

So, we will have to wait and see if President-elect Trump, his Cabinet members and leading Republicans will find a way to agree. Some reforming of Medicare may be part of the 2017 budget reconciliation, but with ObamaCare repeal and replace, tax reform and infrastructure as the immediate priorities, solving the decades-long problem of deficits in Medicare and Social Security will likely have to wait until after 2017.

In the meantime, we are seeing a tilt toward Medicare Advantage plans. These managed care plans (offered through HMOs) often have lower costs and provide benefits not covered by traditional Medicare and Medicare Supplement Plans, such as health club memberships and preventative educational programs for those with diabetes and other chronic diseases. 

A long-term goal for Medicare, which has been around since its founding in 1964, is premium support. Basically, the consumer would choose a plan from those offered through an exchange. The government would provide subsidies to companies, they would lower the premiums and then people would choose their plans. It’s not likely that this will replace Medicare as we know it, but it is an idea being discussed.

Medicaid Reform

President-elect Trump has called for block granting Medicaid. House Speaker Paul Ryan has called for it, too, and Republicans are looking at whether they can reform Medicaid through budget reconciliation.

Those who want to reform Medicaid are focusing on the FMAP, the federal percentage match that states receive through federal funding. This is based on per capita income of the state. For example, a rich state like New Jersey is a 1:1 ratio, while a poor state like Mississippi is about a 3:1 ratio. This means for every one dollar that Mississippi spends on Medicaid, they will receive three free extra dollars from the federal government. This can impact states’ budget decisions. For example, if the governor of Mississippi needs to cut costs, he will more likely cut education or infrastructure by one dollar, rather than cut Medicaid spending by one dollar and lose the three free extra dollars.

The idea of block grants has been around for about 30 years. They are attractive because there are fewer federal rules to comply with and the states can use the money however they wish. But block grants shift more costs onto the states, and governors tend to oppose that.

Another idea floating around is a per capita cap, which would give the states a fixed dollar amount per individual, based on Medicaid standard lines (the blind, aged, and disabled children and adults). It was first proposed by President Clinton, who also wanted block grants. A per capita cap may force the states to control Medicaid costs over time, but there is also a demographic shift to consider—the medical needs and costs for an 85-year-old are much greater than for a 65-year-old. Nursing homes and aging disability provider groups have a huge stake in this and would likely oppose it, as would some governors.

The cost changes may not be felt right away, but they will be noticeable ten years from now and that’s what Congress must plan for. There may be increased waiver flexibility for the states and provider taxes to offset states’ losses. We may also see reforms to make it easier to manage care.

We will be following changes in legislation very closely and will keep you informed as to how these changes affect seniors and persons with disabilities. Check back next week for Part 2 of this blog where we will discuss more anticipated changes in the law including the Affordable Care Act and VA Benefit Rules!

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

To learn more about elder care and how changes in the law may affect you,attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Nursing home care is more than $180,000 per year! Attend this FREE educational seminar to learn:

  • How to protect your home and assets from the costs of long-term care
  • How to stay out of the nursing home and access in-home care
  • How to make sure your spouse is not left financially ruined if you need nursing home care
  • How to access Veterans benefits to pay for long-term care

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop 

 

Tags: Medicare, Medicaid, seniors, disabled, Elder Law, Affordable Health Care Act, social security, trusts, Estate Planning, New estate tax law, new regulations, retirement plans, Nursing Home, Nursing Home Costs

Times Are Changing, So Are Tax Laws

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Aug 26, 2014

The Tax Game Has Changed | Massachusetts Estate Planning Attorney

 

Tax planning, estate tax, trust, congress

 

The Old Ways Don’t Work Anymore

For years, estate planners have done what is considered traditional estate planning. They drafted plans primarily concerned with minimizing future estate tax liability and gave minimal attention to income tax consequences.

This was perfectly fine years ago when the estate tax was much more severe than the potential for income tax. This was attributable to relatively high estate tax rates, low estate tax exemption that was not indexed for inflation, and comparatively low capital gains rates.

However, Congress has tinkered with the tax system in a huge way. Accordingly, the income tax impact of estate planning is taking on greater significance, especially for Massachusetts residents.

 

The Tax Man Cometh

More attention shall now be directed toward the importance of income tax basis considerations in estate planning due to the narrowing between the estate tax rates and the income tax rates. In fact, in most estates worth less than $5.34 million, estate taxes are no longer an issue. Now, income taxes loom large, primarily because of the lack of attention on the income tax basis (i.e. cost or adjusted basis) of capital assets. Also state estate taxes have become critically important because of the lower $1 million threshold for estate taxes in states like Massachusetts.

 

Failing to Update Could Cost You

The bad news for most middle-class taxpayers is that for years they've been fed a steady diet of estate tax minimizing wills and trusts. Worse yet, they hang onto outdated documents for many years, thinking they are done with their estate planning and not wanting to be bothered. Sadly, these old documents will no longer serve their intended purpose of estate tax minimization. A major problem is also created when federal estate tax minimization plans, unless they are updated, will cause a completely avoidable Massachusetts estate tax for a married couple. While there may be no federal estate tax savings with these documents, because very few middle-class taxpayers will ever pay estate tax, the documents will increase income taxes for their heirs upon sale of appreciated assets. Moreover in Massachusetts, there may not only be a completely avoidable estate tax on an additional 1 million dollars, but it may also trigger a large, completely avoidable Massachusetts estate tax on the first death.

 

What to Do About a Completely Avoidable Massachusetts Estate Tax

Bottom line:  the game starts anew. Let's focus on income tax minimization for most taxpayers and forget about estate tax minimization. Unless your estate is worth more than $5.34 million, your biggest risk is Massachusetts estate tax as well as overpaying income taxes due to inattention to income tax basis planning in your wills and trusts.  Don't make that mistake. Review your documents today so that you eliminate these lurking tax problems

 

At the Estate Planning & Asset Protection Law Center, we provide a unified education and counseling process which uses a unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: massachusetts estate planning strategies, trusts, Nursing Home Costs, Mistakes, Tax on IRAs, Massacusetts Estate Tax, social security, Tax Savings, tax deductions, tax liability, tax exemption, tax reform, taxes, Massachusetts estate tax, transfer of assets, tax, trust, Nursing Home

Massachusetts Elder Law Attorney | Confusion Over Medicare

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Oct 25, 2012

Confusion Over Medicare Provides Opportunities for Financial Advisers to Help Boomers and Seniors

With so many people now working past 65, clients often ask their financial advisers when they should sign up for Medicare.

As is often the case with complicated government programs, the answer is: It depends.

Generally, anyone who has paid into Social Security and qualifies for Medicare should sign up for Medicare part A at ssa.gov when they turn 65, Part A covers hospitalization costs and is free.Medicare, elder law, attorney

But for those who are still working, deciding whether to sign up for part B, which covers doctor’s visits and outpatient services, is more complicated and involves lifelong penalties if crucial deadlines are missed.

Most beneficiaries are paying about $100 a month for Medicare part B premiums this year, and premiums are likely to increase slightly this year. Affluent retirees – those with annual income of $85,000 or more and married couples with annual income of $170,000 and up - pay even more.

Costs Add Up

Plus there is the added cost of a Medicare supplemental mental-insurance plan to cover the gaps in traditional Medicare, such as deductibles and co-payments, and Medicare Part D prescription drug coverage, which also has a surcharge for high-income earners. All those medical costs can add up.

“If you’re not taking into account future health care costs, you are doing your clients a disservice,” said Jay Fettig, president of BATTLE System, an insurance management software firm. “If you don’t offer Medicare as part of a financial plan, you risk losing clients to someone who does.”

Mr. Fettig’s company, whose name is derived from Business Acceleration Technology Through Lead Enrichment, offers a free Medicare Genie service to help individuals and their advisors choose the right Medicare plan for their needs. The tool, available at mynewmedicare.com, matches users with appropriate plans, based on their answers to a few questions, and lists the costs of all providers in their area.

Gather the Facts

Should your client, who is still working, elect to use Medicare or stick with his or her employer’s group health plan?

“There is no quick answer to that,” said Arlie Mann, a Medicare specialist with BATTLE System. “I tell them to gather the facts about their insurance premiums and coverage, and we’ll compare it Medicare,” she said.

For those 65 or older who work for a company with 20 or more employees, the group plan is the primary user, and Medicare is secondary. As long as employees have group coverage from their current employer – or from their spouse’s current employer – they are exempt from the delayed-enrollment penalty that permanently raises their Medicare Part B premium by 10% for every 12-month period that they were eligible for Medicare but didn’t enroll.

An employee with good, affordable group health insurance may want to delay paying for Medicare Part B as long as he or she – or his or her spouse – continues to work.

Cheaper Option

For those with a high-deductible group plan, switching to Medicare may be cheaper, Ms. Mann said. B

But once an individual’s employment ends, he or she has just eight months to sign up for Medicare Part B without a penalty.

This period will run whether or not employees choose to continue to participate in their employer’s health insurance plan through the Consolidated Omnibus Budget Reconciliation Act of 1985 for up to 10 months. Those who choose COBRA shouldn’t wait until their COBRA eligibility ends to sign up.

If individuals don’t enroll in Part B during the initial eight months after they stop working, they may have to pay  penalty for the rest of their lives.

The rules are different for people who work for companies with 19 or fewer employees, said Kathryn Votava, president of Goodcare.com, a health care consulting firm that works with individuals and advisers.

Because Medicare is the primary insurer in this case, those who miss the initial enrollment deadline for Medicare Part B, which begins three months afterward, will be hit with the delayed-enrollment penalty. Plus, they may have to wait up to 15 months to sign up for Medicare during the general-enrollment period, which runs from January through March each year.

In the meantime, the employer’s insurance plan, as the secondary insurer, is on the hook for just 20% of the medical costs of individuals, who must cover the remaining 80%.

Ellen Breslow, managing partner at EAB HealthWorks, a health consulting service that works with advisers and business owners, said advisers have a responsibility to lean how to help clients with Medicare issues.

“Although health care would seem outside the scope of an adviser’s area of expertise, the ability to incorporate it into an income management plan can influence an individual’s financial future,” she said.

More information and a questionnaire are available by clicking on the“wealth managers” tab at EABhealthworks.com.

(the above article can be seen in the Investment News newsletter from October 8-12)

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

We would also like to encourage those concerned about changes as a result of new health care reform as well as incresing long term care costs to read our newest guide, the Seniors' Guide to Health Care Reform and Avoiding Nursing Home Poverty.  You will discover how the Affordable Care Act will impact your health care and the secrets millions of smart families are using to Avoid Nursing Home Poverty!

describe the image

(the above article can be seen in the Investment News newsletter from October 8-12)

describe the image

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Medicare, social security, Retirement, Beneficiary, Massachusetts, Elder Law, insurance, financial, advisers

Massachusetts Elder Care Attorney | Disabled Child or Not? Medicaid Transfer Rules (Part 2)

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Oct 18, 2012

Earlier this week I was telling you about Ron.  His Dad transferred his home to Ron, who currently is disabled but was not at the time of the transfer.   I explained to Ron that the transfer, contrary to what he believed, is subject to a Medicaid transfer penalty of 51.5 months if Dad applies for Medicaid now.  I had an idea of how we could fix it.estate plan, estate planning, attorney, Medicaid

But, before I shared that with him I asked Ron a few more questions.  “Who has been paying the taxes and upkeep on the home?”, I inquired.  Ron told me that until he moved into the home a year ago, Dad was paying all those expenses.  He transferred money to Ron who then paid those expenses out of his own checking account.

Again, I told Ron that up until the point in time that he was deemed disabled by Social Security, those transfers would be subject to a Medicaid transfer penalty.  So, adding those amounts to the $400,000 home transfer would increase the penalty further.

Ron was really panicking now.  I told him to hold on.  I had a solution.  “What we need to do is have you transfer these assets back to Dad now, including the home.  We could then have Dad transfer the assets right back to you”, I told him.

I know you are reading this and saying to yourself, “that can’t be right”.  However, the transfer back to Dad will undo the potential transfer penalty.  And then the new transfers from Dad to Ron will fall within the disabled individual exception.  It is critical that this all be done, however, before filing a Medicaid application.

Ron was confused and amazed at the same time.  He understood what I was saying although it seemed crazy to him.  But, that’s how the Medicaid rules are, complex and bizarre at times.  Had Ron not called us when he did to hire us to handle Dad’s Medicaid application, he would, in all likelihood, have been faced with a lengthy penalty with no idea of how to fix it.  And because it can take 4 to 6 months after the initial interview before the State actually reviews your application, Ron would not have learned of his mistake until he ran up tens of thousands of dollars of nursing home bills. 

No one wants to be in that type of a mess.  Ron was lucky he got the right advice at the right moment from someone who knows the complexities of the Medicaid rules.  As they say, timing is everything.

To gain free online access to the Complete Alzheimer's Resource Kit, which contains care tips as well as other useful information on Alzheimer’s disease, please visit www.BostonMemoryLawyer.com

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Estate Planning, social security, Medicaid, elder care, Massachusetts, transfer, Attorney, penalty, disabled

Massachusetts Elder Care Attorney | Disabled Child or Not? Medicaid Transfer Rules (Part 1)

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Oct 16, 2012

The last 2 weeks we were discussing the transfer of a home to a child who has been living with the parent in that home.  But, what about transferring the home to a disabled child?  Isn’t that an exception to the Medicaid transfer rules?Medicaid, estate planning, attorney, elder care

The answer is yes, but like all things Medicaid related, it is tricky.  A few weeks ago Ron called me with regard to his dad who needs nursing home care and will run out of funds to pay for it in 2 months.  Ron will need Medicaid for Dad.  He told me that 4 years ago Dad transferred his home to Ron.  I told Ron that this is a transfer subject to a Medicaid penalty unless Ron is blind or permanently and totally disabled. 

“No problem”, Ron said.  “I am disabled.”  Well, not so fast.  I explained to Ron that the disability determination must be made either by the Social Security Administration or the Disability Review Unit of the State of New Jersey’s Division of Medical Assistance and Health Services.  Ron told me he receives Social Security Disability payments.  I then asked him how long he has been on SSD.  His answer was about 2 years.  “That’s a problem”, I said.

I asked Ron to go back through his records and provide me with a copy of his approval letter from Social Security.  Sure enough, when he faxed that letter to me I saw that he was deemed disabled a full year after Dad transferred the house to Ron.  “Does that matter”, he asked.  Absolutely.  In order for the transfer to fall within the disabled child exception, Ron must have been disabled at the time of the transfer.

Ron told me the house is worth approximately $400,000.  At that value, the transfer penalty is 51.5 months, meaning Ron would have to pay for Dad’s care for that long before Medicaid will cover him.  So is that it?  Must Ron sell the home that he now lives in and spend down those assets?  Maybe not.  Later this week I will reveal what I told Ron.

For more information about Medicaid, you can gain free online access to the “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty” which also contains secret benefits revealed by the Affordable Care Act.

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: Estate Planning, social security, Medicaid, elder care, Massachusetts, transfer, Attorney, penalty, disabled

Massachusetts Estate Planning Attorney | Powers of Attorney - 7 Things You Need to Include!

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Oct 08, 2012

Powers of Attorney - 7 Things You Need to Include!

Do You Have Them?


It never fails.

 

A prospective client comes into the office and is very old or very ill, or both.  The client proclaims they have powers of attorney.

 

We take one look at the powers of attorney and, with a gasp, realize that the documents they have are outdated and nearly worthless.power of attorney, medicaid, medicare

 

Why?

 

Because their powers of attorney are just "plain-vanilla".

 

There are no specific authorizations inserted for:

 

- public benefits planning, Medicaid, Medicare,  etc.

- Social Security elections

- retirement planning elections

- gifting for Medicaid benefits planning or tax planning

- account changes

- options for housing changes

- tax planning authority

 

Be careful though, some of these powers can create tax problems if not customized properly.

 

So, don't rely on old outdated powers of attorney that were done years ago with no forethought toward what is required during the senior years.

 

Remember, a long-term care spend-down can totally deplete remaining assets. This is what is most devastating to the middle class these days.

 

Get updated powers of attorney that have appropriate authorizations (especially long-term care authorizations).

 

Also, one must do this before mental incapacity closes the window of opportunity.

 

Don't rely on some old outdated documents that have been laying on the shelf for years. 

 

Bottom Line: What worked for you or a client at age 25,or even at age 50, may not work for you at age 65.

 

We have developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings.

Click Here to Download our Trust, Estate, & Asset Protection  Legal Guide

 

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: power of attorney, Medicare, social security, Medicaid, taxes, tax, middle class, incapacity

Long Term Care and College Debt | Boston Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Aug 16, 2012

There are many dangers associated with grandparents paying for a grandchild’s college education if they haven’t planned for long term care first.  That payment may not be subject to gift tax laws but will be subject to a Medicaid transfer penalty. senior, student

However, there is another disturbing trend that is hitting seniors hard and it is a growing problem. As the cost of college education continues to soar so does the amount of student loan debt, now totaling over $1 trillion.  Almost 90% of that is from federal student loans and the federal government is getting more aggressive in pursuing repayment.  Changes in the laws have given the government more ability to collect from defaulting borrowers.  Student loans are not dischargeable in bankruptcy, unlike credit card debt, for example.


The government, under a 1996 law, has the ability to collect the debt from Social Security retirement and disability checks and it is doing just that with increasing frequency.  In the year 2000 there were 6 cases in which Social Security recipients checks were reduced to cover college loans on which they were delinquent.  In 2007 that number was 60,000 and in the first 7 months of 2012 that number was up to 115,000.


For many seniors on fixed incomes reducing their Social Security checks, which in many cases are already meager, will have a devastating impact.  In many cases parents and grandparents have cosigned loans for their children and grandchildren.  If the primary borrower defaults on the loan, the lender can collect from the cosigner.


With statistics showing that many baby boomers are not saving enough for retirement and the cost of long term care continuing to climb, adding college debt to the equation just adds to the complexity of the problem.  This is yet another example of why you can’t wait until a medical crisis hits to figure out how you will pay for long term care - Your physical and financial well being depend on it.

Gain instant free online access to “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty”, which contains information on how Massachusetts Seniors will be impacted by the Affordable Care Act.

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: long term care, Baby Boomers, gift tax, social security, Medicaid, Retirement, health Care act, student loans

Elder Law Perspective on Taking Early Social Security Payments

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Jun 12, 2012

Much has been written recently about the pros and cons of taking Social Security early at age 62 vs. waiting till full retirement age (which gradually increases till it reaches age 67 for those born in 1959 and later).  One article discussed why it could be a huge mistake to take Social Security early.  What wasn’t included in the discussion turns out to be a big blind spot.  There is no mention of how long-term care costs might impact the decision.

Elder Law, Social Security, Long-Term Care, MassHealth, expenseAdvocates of waiting till full retirement age point out that the payment, after adjusting for inflation, can be as much as 75% more than the payout at age 62.  In the case of a married couple, if the spouse with the higher earnings waits till full retirement age to collect and dies first, the surviving spouse will receive the greater of the two payouts.  So a decision to take benefits early could impact the spouse as well.

Of course, no one knows how long either spouse will live and the idea of taking Social Security 5 years early is appealing.  “Give me some money now since I don’t know if the whole Social Security system will go bankrupt.  It will also take approximately 6 to 8 years at the higher payout before the decision to wait becomes the better result in terms of total dollars received and who knows if I’ll live that long.”

Both considerations are valid ones.  However, in the whole analysis, what’s missing is any discussion as to how your Social Security benefit impacts long-term care.  And that can be a huge mistake.  Many retirees are – and will continue to – rely heavily on Social Security benefits as a large part of their retirement plan.  Getting a few hundred extra dollars a month could have a significant impact on their lifestyle.

But, it is so common for people to look at retirement without any consideration at all of how they would pay for a large long-term care expense.  Many Americans will not be able to afford to privately pay for very long and may need to qualify for government needs based benefits, the MassHealth program.

Many of MassHealth’s programs have a strict income cap, $2,094 per month in 2012.  Social Security and pension are typically the income that is looked at to determine eligibility.  These amounts can’t be changed.  Once you lock into a number, that’s it, except for cost of living adjustments (but MassHealth’s income cap is tied to the same Cost Of Living Adjustment).

We have so often had clients whose income exceeds the income cap by only a few dollars.  As a result they are ineligible for many of Medicaid’s community programs that might allow them to stay at home and get government assistance with their long term care needs.  So, in considering whether to wait and take a higher Social Security payout, one might want to consider whether that will make a whole lot of government programs completely out of reach for me.  That may or may not change anyone’s mind but it is certainly information we’d all like to know all the consequences before making such an important and irreversible decision.

At the Estate Planning & Asset Protection Law Center we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide our clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.  We invite you to join us for a free educational workshop hosted by our team of estate planning and elder law professionals.  By attending a workshop you will learn more about how you and your family can take advantage of community programs that can soften the financial impact of caring for a loved one.  To register please visit www.MASeniorWorkshop.com or call (800) 964-4295 (24/7).

Tags: Elder Law, long term care, Medicare, Baby Boomers, social security, Medicaid, MassHealth, family, elder care, social security, seniors, assisted living, veterans benefits, life-care plan, elder care journey

Answers for Framingham Veteran's Benefits

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Aug 26, 2011

The Question

 My father fought in WWII and died in January 1993. My mom presently lives in an Assisted Living Community.  My mom is 92 years old and cannot live on her own anymore.  Would she qualify for a VA benefit of any kind?  How would I go about obtaining this information to help my mom. Her Assisted Living Community costs her more than $3500 a month. Mom sold her house but once the money runs out I worry what will happen and how she will be cared for?  I would appreciate any information you could give me.

 Answers for Massachusetts Veterans

The good news is as a surviving spouse your mother may be eligible for an “Aid and Attendance” benefit.  In order to qualify for this benefit your mother must have limited assets and low yearly Income for Veteran’s Administration Purposes (IVAP).  You should locate your town or region’s Veteran’s Service Officer who is critical to the filing of an application with the local VA regional office. 

Qualification:

There is a two-part test for qualification, an assets test and an income test.

I. The Asset Test

In order to qualify to receive benefits your mothers total net worth, less certain exemptions allowed by the Veteran’s Association, should be under $50,000 (home, vehicles, life insurance policies).  It may be possible to qualify for benefits if yourVeteran's Benefits Natick total net worth is greater than $50,000 but being under that number greatly increase an applicant’s chances of qualification.

II. The Income Test

The countable income for veterans’ benefits is determined by taking an individual’s gross income and subtracting from that all of their unreimbursed medical expenses to determine their IVAP, which is ultimately used to determine whether or not a person qualifies.  For your mother, a surviving spouse with no dependents, her IVAP cannot exceed $1,056 per month. 

 The cost of an assisted living facility, and even part or all of the cost of an independent living facility, can also be an allowable medical deduction to reduce a veteran’s gross income to a much lower net countable income that may qualify him or her for veterans’ benefits. It is very important to meet with a knowledgeable veteran’s service officer or an experienced elder law attorney for a pre-filing consultation to determine whether or not a veteran may qualify. It is also important to review the estate planning work to see what may be done to assist the veteran in qualifying for this particular benefit. There may be planning steps that can be implemented before applying that will help a veteran or widow to qualify and or obtain an increased benefit.

Determining what is the countable income as measured by the Veterans Administration is very confusing to many individuals in. An attorney skilled in elder law and accredited with the Veteran’s Administration can provide a veteran and the veteran’s family with appropriate pre-filing consultations to determine the appropriate steps that must be taken to be able to determine if it would be right to apply for this VA benefit. 

 If you are in Massachusetts and would like to discuss Veteran’s Benefits more extensively, please call our office at (781)-237-2815 or register to attend one of our free educational workshops.  You can also access our free Nuts & Bolts Guide to Veteran’s Benefits and learn what you can do to maximize your benefit.

Tags: massachusetts estate planning strategies, Nursing Home Costs, Elder Law, Metro West Estate Plan, life insurance, social security, Nursing Homes, Health Care, assisted living, veterans benefits, life-care plan

Sign-Up Below To Receive Your Free Report

Follow Me

Browse by Tag



Follow DennisBSullivan on Twitter