New York Elder Law Attorney Blog

By Deborah Bass, President of Bass Eldercare Resources
basseldercare.com

Everyone wants their parents, grandparents and loved ones to live somewhere safe, comfortable, and affordable, where a high quality of life and enjoyable community come standard. Finding a setting that allows your elder to enjoy a high quality of life while preserving their independence and dignity is essential. Unfortunately, it's also easier said than done. New senior housing facilities open every day, in a dizzying array: assisted living facilities, memory care, nursing homes, senior housing. What does it all mean, and what's right for your loved one? Begin your research process by asking these six critical questions.

What Are My Elder's Needs?

The first step in finding the appropriate senior housing is determining what your elder's needs are. This means looking at their physical condition, their ability to care for themselves, and their emotional and spiritual health. Be objective as possible when answering this question: considering your mother's ability to move around unassisted may be difficult, but it's imperative that you find a facility that's prepared to meet both current and emerging needs. Does your elder need care dealing with a chronic health issue, such as diabetes? Are they experiencing confusion or showing the signs of dementia? Would they prefer to live in a community of people who share their philosophical outlook or faith? All of these questions help determine what your elder's needs are.

What Degree of Staff Support is Desirable?

Preserving independence and autonomy is a goal of many elders. Not every senior needs continual support and monitoring. It's a good idea to identify how much support your elder will realistically need, as well as what level of support the different facilities you're considering offer. There's a wide range of options, from senior housing facilities that offer little help beyond building maintenance - meaning your dad never has to snowblow the driveway - to intensive skilled nursing care for those elders with significant medical needs. Assisted living facilities are a popular choice, as they offer assistance with the majority of daily living needs together with opportunities for socialization. Support for basic health care needs is generally available, and you may be able to contract for more intensive care if needed.

What Happens If Needs Change?

An elder who is healthy, strong, and almost completely independent one day can, just like the rest of us, undergo circumstances that totally change their needs in the blink of an eye. A stroke, heart attack, car accident, or the onset of Alzheimer's or other degenerative disease can mean that what was once a perfectly suitable living situation is no longer appropriate. Continuous care facilities are designed with change in mind: residents are provided only with the level of support that's desired and appropriate at the time, but should circumstances change, more assistance is available. Ask how the facility you're considering handles changing elder needs: you don't want to have to move your loved one abruptly - especially when they're facing declining health or physical challenges.

What Type of Community Does My Elder Want to Live In?

Consider the people your parents, grandparents, or loved ones will be sharing space with. Most of us enjoy living around those who share our values and ideals; that's why we're seeing the emergence of 'themed' senior living options. Some facilities are faith based, others are catering specifically to a given ethnic group or community. Matching your loved one to a community where they'll feel welcomed and valued is important.

Is This Facility Conveniently Located?

Entering senior housing does not mean withdrawing from the world. Ideal housing will allow your elder to continue critical relationships - with friends, family members, faith communities, doctors, and others that they've been living alongside for years. It's also important to consider the convenience of family members, particularly for elders who are near the end of life or need a great deal of care.

What's the Real Picture Here?

While you certainly want to interview the staff at any senior living facility, that's not where the research ends. Go online, talk to local senior welfare agencies, and consult with those in the know about the facility you're considering. Do they have a good reputation? How do they perform on state inspections? Have there been complaints or allegations of abuse? Talk to your insurance company: have they worked with this facility before? Do they pay for the services provided? You don't want to be blindsided - objective information is critical in making an informed, appropriate decision.

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As the founder and CEO of Bass Eldercare Resources Deborah Bass brings expertise, experience, and compassion to families in need of eldercare resources and guidance. Every elder has their own unique vision of the future, and Bass Eldercare works to make that vision real. From finding appropriate housing, securing in home care, and everyday life activities such as eating, bathing, and dressing are all handled through tax planning, elder law issues, and more, the Bass Eldercare team has the knowledge, resources, and access to get the job done.

For more information about Bass Eldercare, please visit http://www.basseldercare.com/

by Michael Ettinger, Esq.

Long-term care insurance (LTCI) and the Medicaid Asset Protection Trust (MAPT) are often thought of an alternatives to each other. They are not. While LTCI is both a shield and a sword, the MAPT is a shield only.

LTCI protects your assets and income from the costs of care. But it has a positive effect (the sword) in that it actually pays for someone to come into your home and care for you there. The MAPT protects assets, like your home and your life savings, but it does not protect your income (pensions, social security, interest, dividends, etc.). The MAPT has no positive effect in terms of providing care. It is solely a defensive tactic. That being said, in the event LTCI is unavailable to the client for medical or financial reasons, the MAPT is a wonderful tool. And there is truth in the saying that a good defense is the best offense. With the MAPT in place five years ahead of time, the client's assets are protected and Medicaid will pay for the cost of care, over and above what your income provides. If you have a spouse at home, they may keep about $3,000 per month of the couple's combined income and sometimes more.

Our stated preference for clients is LTCI, if available. Most clients would prefer to "age in place" or, in other words, stay in their own home and receive home care if needed. Here, the LTCI stretches your dollars, to allow you to remain in the home for years more than you might have been able to afford otherwise. If your spouse is unable to care for themselves, it allows you to call in extra help so that you do not wear yourself out acting as a caregiver in your later years.

Some clients have adopted a hybrid approach when it comes to LTCI and the MAPT. They purposely underfund the LTCI, say taking a $200/day benefit ($6,000/month) instead of a $400/day benefit ($12,000/month). They also establish the MAPT and transfer their assets to the trust. The thinking is that the $200/day will pay for the home care that they may need and want, at half the cost of the full policy. On the other hand, if they end up in a nursing home, they won't lose their assets due to the $6,000/month they may be short, and Medicaid will pick up the difference.

There are no right and wrong answers in deciding which is the best avenue to take when considering protecting your assets from the high costs of long-term care. We have found, however, that an open discussion between the client and the experienced elder law attorney, with all of the facts and circumstances on the table, often yields the most satisfactory result.

by Michael Ettinger, Esq.

What do you do when a client comes in to see you and says that his mother is going into a nursing home and she has $300,000 in assets. In fact, mom scrimped and saved all of her life to have this nest egg and now she desperately wants to see her children get an inheritance.

Although you may protect all of your assets by planning five years ahead of time with a Medicaid Asset Protection Trust, all is not lost if nothing has been done and the client finds herself on the nursing home doorstep.

The advanced elder law technique, used to protect assets at the last minute, is called "half-a-loaf" planning. Here's how it works. Let's assume, for the purposes of our example, that the nursing home costs $10,000 a month. When mom goes into the nursing home, we gift one-half of the nest egg, in this case one-half of $300,000, or $150,000, to her children. Then we lend the other $150,000 to the children and they execute a promissory note agreeing to repay the $150,000 in fifteen monthly payments of $10,000 per month, together with a modest amount of interest. Now we apply for Medicaid benefits. Medicaid will impose a penalty period (i.e. they will refuse to pay) for 15 months on the grounds that the gift of $150,000 could have been used to pay for mom's care for 15 months. Medicaid ignores the loan since it was not a gift. It is going to be paid back, with interest, according to the terms of the promissory note. What happens is that the fifteen loan repayment installments will be used to pay for mom's nursing home care during the penalty period. Just when the loan repayments are finished, the penalty period expires and Medicaid begins to pick up the tab. Lo and behold, the children get to keep the $150,000 gift and mom has saved some of the inheritance for her children.

Also known as the "gift and loan" strategy, half-a-loaf planning has been approved by New York State Department of Social Services.

And of course everyone knows what half-a-loaf is better than, right?

by Michael Ettinger, Esq.

Medicaid annuities have been a viable planning option for New York spouses since The Deficit Reduction Act of 2005.

Say you have a spouse who needs nursing home care (the "institutionalized spouse") but you have more assets than the Medicaid law allows you, the spouse at home (the "community spouse") to keep. Currently, the community spouse may keep about $125,000 in resources (not including the house, which is exempt if a spouse is living there). But what if the couple has $400,000 in assets? That's $275,000 in excess resources.

Many well meaning advisers, including lawyers, will tell you that it is too late and you have to first spend down that $275,000 before Medicaid will pay. Not correct.

Elder law attorneys have a number of good planning options here. One, spousal refusal was the subject of an earlier blog post.

Another planning option, the Medicaid annuity, may in some cases turn out to be the best planning option.

The community spouse purchases a Medicaid annuity worth the excess $275,00 which must make repayments of the full amount of the annuity plus interest with the community spouse's actuarial life expectancy. Now, the $275,000 has disappeared and the institutionalized spouse is immediately eligible for Medicaid, saving nursing home costs of $12,000 or more per month. Spouse at home receives an increased income which is also almost all sheltered from Medicaid.
What if the spouse at home dies first, or before all the payments are made? The children may be named the beneficiary and receive the balance of the payments.

by Michael Ettinger, Attorney at Law
The Medicaid Asset Protection Trust (MAPT) is a technique commonly used by elder law attorneys. It consists of an irrevocable trust, usually set up by a parent of parents sixty-five and older. One or more of the adult children are named as "trustees" to manage the trust for the benefit of the "beneficiaries" who remain the parents during their lifetimes. For example, the parents retain the right to the exclusive use and enjoyment of the home and the income from all of the trust assets. The establishment and "funding" of the trust, i.e. retitling the home and the investments in the name of the trust, starts the five year look-back period running. After five years, those assets become exempt and are protected from the costs of long-term care.

Once the MAPT is established, there are certain things the parties can and cannot do. Below are a list of the "Do's and Don'ts" concerning the MAPT.

Do make all transfers to your trust, as advised by the law firm, in a timely manner.
Do use trust assets for repairs or improvements to the home or other property in the trust.
Do use trust assets for payment of real estate taxes and homeowners insurance.
Do take dividends and income on trust assets on at least a quarterly basis.
Do call the law firm when you wish to make a gift from the trust to any of your beneficiaries.
Do call the law firm when a Grantor needs Medicaid benefits or dies.
Do call the law firm when personal or financial circumstances change significantly.
Do call the law firm if you wish to change trustees or break the trust.
Do provide your homeowner's insurance company with the "letter of instruction" and a copy of the trust for real property transferred to the trust.
Do provide your CPA or tax preparer with the "letter of instruction" regarding the trust tax return
and the "letter of instruction" tax deductibility of legal fees.
Do choose your trustee carefully to avoid the expense (and unpleasantness) of changing
the trustee.
Do call the law firm if you want to take out a reverse mortgage on the property in the trust.

Don't use trust assets to pay telephone or utility bills.
Don't use trust assets to pay personal expenses.
Don't use trust assets to purchase an automobile.
Don't take principal or capital gains from trust assets.
Don't transfer IRA's or 401(k)'s to the trust.
Don't allow beneficiaries to return to the trust or the Grantor any gifts made from trust assets.
Don't make additional transfers to the trust without advising the law firm.