Adapting: Financial Planning for a Life with MS
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A presentation made by certified elder law attorney Mark Heffner during the Rhode Island Spring Education Conference, presented by the Greater New England Chapter of the National Multiple Sclerosis Society. These slides cover powers of attorney, irrevocable trusts, revocable trusts (a.k.a., "living trusts"), estate planning, myths and facts about Medicare, how Medicaid is different from Medicare, planning techniques for Medicaid and more.
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Adapting: Financial Planning for a Life with MS
- 1. HEFFNER & ASSOCIATES ELDER LAW Mark B. Heffner, Esq. , CELA Heffner & Associates 615 Jefferson Boulevard Warwick, Rhode Island 401-737-1600 mheffner@hefflaw.com www.hefflaw.com Estate Planning & Public Benefits for Individuals with MS
- 2. HEFFNER & ASSOCIATES ELDER LAW Disclaimer •Materials are for general education and should not be substituted for consultation with a competent estate planning attorney in your state •Materials presented from the perspective of Rhode Island •Rules and practice vary significantly from state to state and are subject to change
- 3. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning: Health Care Decisionmaking Advance Directive Durable Power of Attorney for Health Care Living Will Selection of Agent Selection of Successor Agent
- 4. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning: Financial Decisionmaking Joint accounts: Be careful! Durable Power of Attorney for finances Determination of Powers to provide Again, selection successor Agent Selection of Agent (aka, “Attorney in fact”) Ex: Gifting and Estate planning?
- 5. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning: Financial Decisionmaking Revocable Trust, aka,“Living Trust” Avoids/Reduces “Push-Back” of Institutions with use of Durable Power of Attorney Selection of Trustee & successor Trustee critical Still need Durable Power of Attorney for finances No utility for asset protection planning. Instead, need…….
- 6. HEFFNER & ASSOCIATES ELDER LAW Lifetime Planning: Financial Decisionmaking Irrevocable Trust Properly structured, assets titled to Irrevocable Trust protected from spend down for Medicaid eligibility Assets transferred subject to 5 year lookback period Loss of direct control over assets transferred
- 7. HEFFNER & ASSOCIATES ELDER LAW Planning for post-death Will—requires probate Selection of Executor—same person generally as agent under financial DPOA Revocable & Irrevocable Trusts—if “funded” will avoid probate for those assets Note: Need to check beneficiary designations (IRAs, life insurance, annuities), joint titling, as generally “trump” Will or Trust provisions
- 8. HEFFNER & ASSOCIATES ELDER LAW Public benefits available for long-term care: Medicare Myth: Individuals with MS & other chronic illnesses requiring LTC not covered by Medicare Fact: Individuals eligible for Medicare are entitled to an individualized assessment of their need for services vs. generalized assumptions based on diagnosis Examples of services which could benefit individuals with MS include PT, OT, Speech therapies.
- 9. HEFFNER & ASSOCIATES ELDER LAW Public benefits available for long-term care: Medicare Myth: PT, OT, Speech therapies unavailable to MS patients because condition is chronic and not likely to improve Fact:Therapies are available if services are skilled and medically necessary to maintain individual’s condition and prevent deterioration “Improvement” or “restoration of prior functioning” not the test—rather that skilled services are required to maintain current level of functioning & prevent deterioration
- 10. HEFFNER & ASSOCIATES ELDER LAW Public benefits available for long-term care: Medicare Nursing home benefit under Part A--limited long term care (LTC) coverage 20 days full payment, up to 80 additional days with co- pay ($160/pay) Medicare nursing home benefit requires a three day prior hospital admission In contrast to…..
- 11. HEFFNER & ASSOCIATES ELDER LAW Public benefits available for long-term care: Medicare Coverage for long-term home care benefits are available provided: Physician signs plan of care Patient is homebound Patient requires PT or speech therapy, or intermittent skilled nursing home care Home care provider is Medicare-certified Potentially unlimited in duration
- 12. HEFFNER & ASSOCIATES ELDER LAW What is Medicaid? •It is not Medicare! •Medicaid: in addition to general criteria (age, blind, disabled) & needing a level of care, must also fall within financial criteria (assets, income, transfer restrictions) •Medicare: insurance model; no asset or income qualification requirements •Substantial state to state variations
- 13. HEFFNER & ASSOCIATES ELDER LAW Resources Excluded (Single Person) •Home (equity value limit: $543K) if “intent to return” •Household goods & personal effects( no value limit, unless exceptional) •Vehicle (limit: $4500, unless used for transportation to medical appts) •Life Insurance ($4000 face limit) •Irrevocable Burial Contract, or funds set aside for burial ($1500) •Funds otherwise available (limit: $4000) Available EVERYTHING ELSE
- 14. HEFFNER & ASSOCIATES ELDER LAW Resources Excluded (Married Couple) •Home: no equity limitation if residence of “Community Spouse” (CS) •Vehicle: if used by CS, no limitation on value •CS retains “Community Spouse Resource Allowance” (CSRA)
- 15. HEFFNER & ASSOCIATES ELDER LAW Transfers of Assets Any transfer occurring on or after February 8, 2006 is subject to five year lookback period Q: What types of transfers fall within lookback period? A: Uncompensated (UV) transfers--i.e., those for which fair market value (FMV) not received by applicant or the applicant’s spouse Parent gives adult children each $10,000 Uncompensated transfer: $30,000
- 16. HEFFNER & ASSOCIATES ELDER LAW Medicaid Planning Techniques Highly individualized—one size definitely does not fit all! • Spenddowns—debts, taxes, burial contracts. Non-crisis, or “pre-crisis” planning techniques include: • Make transfers, incur five year lookback period • Specialized annuities—married couples only “Crisis planning” techniques include: • “Reverse half a loaf” planning • Many more opportunities exist for married couples; however still “never too late” for single individuals • Transfers—must be mindful of tax implications, creditors—grantor Irrevocable Trusts useful device.
- 17. HEFFNER & ASSOCIATES ELDER LAW How to get started Arrange for consultation with competent elder law attorney Preparation: provide elder law attorney with individual family, financial and health information Initial meeting should be hour-hour & a half Expect fee for initial consultation
- 18. HEFFNER & ASSOCIATES ELDER LAW National Elder Law Foundation www.nelf.org Locating competent elder law attorney Certified Elder Law Attorney Provides interactive state map of Certified Elder Law Attorneys (CELA) in each state
- 19. HEFFNER & ASSOCIATES ELDER LAW Mark B. Heffner, Esq. , CELA Heffner & Associates 615 Jefferson Boulevard Warwick, Rhode Island 401-737-1600 mheffner@hefflaw.com www.hefflaw.com