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ELDER LAW ESSENTIALS FOR THE FINANCIAL PLANNING PROFESSIONAL By E. Garrett Gummer, III, Certified Elder Law Attorney (CELA) SPRING SYMPOSIUM May 17, 2011.

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Presentation on theme: "ELDER LAW ESSENTIALS FOR THE FINANCIAL PLANNING PROFESSIONAL By E. Garrett Gummer, III, Certified Elder Law Attorney (CELA) SPRING SYMPOSIUM May 17, 2011."— Presentation transcript:

1 ELDER LAW ESSENTIALS FOR THE FINANCIAL PLANNING PROFESSIONAL By E. Garrett Gummer, III, Certified Elder Law Attorney (CELA) SPRING SYMPOSIUM May 17, 2011

2 WHAT IS ELDER LAW? Holistic approach to helping senior citizens and their family members with their legal needs including Estate and Long-Term Care Planning, Estate Administration, Guardianships, and nursing home assistance.

3 PAYMENT OPTIONS FOR NURSING HOME CARE PRIVATE PAY (Average cost in PA/month - $7,901.03) LONG TERM CARE INSURANCE PRIVATE HEALTH INSURANCE MEDICARE (Co-pay for $141.50) MEDICAID (MEDICAL ASSISTANCE)

4 MEDICAID JOINT FEDERAL-STATE PROGRAM WHICH BEGAN IN 1960s TO PROVIDE MEDICAL CARE, INCLUDING NURSING CARE, TO THOSE WHO CANNOT AFFORD IT. ADMINISTERED BY LOCAL COUNTYASSISTANCE OFFICES OF THE DEPARTMENT OF PUBLIC WELFARE

5 ELIGIBILITY FOR MEDICAID YOUR FINANCIAL RESOURCES CAN BE NO MORE THAN $2,400 OR $8,000 DEPENDING ON YOUR MONTHYLY INCOME. INCLUDES CASH, STOCK AND BONDS, BANK ACCOUNTS, YOUR IRA AND REAL ESTATE YOU OWN THAT IS NOT YOUR PRIMARY RESIDENCE.

6 EXEMPT RESOURCES ONE MOTOR VEHICLE HOUSEHOLD GOODS PERSONAL BELONGINGS BURIAL PLOT AND MARKER PRE-PAID FUNERAL OR IRREVOCABLE BURIAL ACCOUNT LIFE INSURANCE WITH FACE VALUE OF $1,500 OR LESS, OR IF FACE VALUE IS GREATER THAN $1,500, UP TO $1,000 OF ITS CASH VALUE. YOUR HOME (IF YOU INTEND TO RETURN TO IT OR YOUR SPOUSE OR DEPENDENT CHILD LIVES IN IT)

7 SPOUSAL PROTECTED SHARE SPOUSE AT HOME MAY KEEP A PORTION OF THE RESOURCES WHICH ARE EXEMPT FOR DETERMINING MEDICAID ELIGIBILITY. STANDARD SPOUSAL SHARE IS ONE-HALF THE COUPLE’S TOTAL NON-EXEMPT RESOURCES, BUT NO LESS THAN $21,912 AND NO MORE THAN $109,560.

8 EXAMPLE MR. AND MRS. JONES HAVE NON-EXEMPT RESOURCES OF $200,000 MR. JONES ENTERS A NURSING HOME AND APPLIES FOR MEDICAID MR. JONES MAY KEEP $2,400 MRS. JONES MAY KEEP $100,000 $97,600 HAS TO BE SPENT DOWN BEFORE MR. JONES WILL BE ELIGIBLE FOR MEDICAID

9 TRANSFER OF ASSETS (GIFTS)* FIVE (5) YEAR LOOK BACK PENALTY PENALTY BEGINS TO RUN WHEN INDIVIDUAL WOULD HAVE BEEN ELIGIBLE FOR MEDICAID, BUT FOR THE TRANSFER CURRENT PENALTY DIVISOR IS $7, PER MONTH OR $ PER DAY *Do not confuse this with gift giving for estate planning purposes under federal law.

10 EXCEPTIONS TO TRANSFER PENALTIES TRANSFER TO SPOUSE, OR MINOR OR DISABLED CHILD TRANSER OF YOUR HOME TO A SPOUSE, MINOR OR DISABLED CHILD, SIBLING WITH AN EQUITY INTEREST, OR CAREGIVER CHILD TRANSFER EXCLUSIVELY FOR A PURPOSE OTHER THAN TO QUALIFY FOR MEDICAID

11 USING TRUSTS IN MEDICAID PLANNING IRREVOCABLE VS. REVOCABLE DISABILITY TRUSTS (SPECIAL NEEDS TRUST)

12 TREATMENT OF ANNUITIES MUST DISCLOSE INTEREST OF INDIVIDUAL OR COMMUNITY SPOUSE IN ANY ANNUITY TO RECEIVE MEDICAID MUST BE IRREVOCABLE AND NONASSIGNABLE MUST BE “ACTUARIALLY SOUND” MUST PROVIDE FOR PAYMENTS IN EQUAL AMOUNTS; NO DEFERRAL OR BALLOON PAYMENTS PERMITTED MUST NAME COMMONWEALTH AS REMAINDER BENEFICIARY.

13 INCOME GENERALLY, ALL OF YOUR INCOME, BUT NOT YOUR SPOUSE’S INCOME, IS COUNTED INCLUDES – PENSIONS, SOCIAL SECURITY, INTEREST AND DIVIDENDS, AND OTHER INVESTMENTS YOU ARE PERMITTED TO KEEP $45 PER MONTH FOR PERSONAL EXPENSES

14 MINIMUM MONTHLY MAINTENANCE NEEDS ALLOWANCE (MMMNA) PROTECTS COMMUNITY SPOUSE WITH INSUFFICIENT INCOME MINIMUM / MAXIMUM LEVELS - $1,822 / $2,739 ALL STATES MUST USE “INCOME FIRST” RULE TO FUND MMMNA RESOURCES CAN ONLY BE USED AFTER INSTITUTIONALIZED SPOUSE’S INCOME IS EXHAUSTED

15 PENNSYLVANIA ESTATE RECOVERY PROGRAM BACKGROUND REQUIREMENTS LIABILITY FOR FAILURE TO COMPLY UNDUE HARDSHIP WAIVERS


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