Some Long Term Care Insurance Options You Probably Never Heard Of
Jim and Judy called because they wanted to make some changes to their wills. In their late 70’s but still pretty healthy, they have a son who is struggling financially with 2 children in college and another with special needs. They wanted to provide for their grandchildren and also wished to make some other modifications to their estate plan. As I always do, after we addressed their needs, I turned to the topic of long term care. “How do you plan to pay for care should either of you need it,” I asked. Jim proceeded to tell me about how they had looked at long term care insurance a number of years ago and opted not to buy it. As he was telling me this, he sounded a little bit regretful. “I don’t know,” he said. “Maybe we made the wrong choice, but it’s too late now. We’ll have to just pay for it ourselves as it comes. I have invested our assets and done pretty well. We have approximately $1,500,000 so I guess we’ll have to draw down on that money if and when we need care. I then told Jim that it might not be too late
When Doing it Yourself (Medicaid) Can Only Take You So Far (Part 2)
Last week I was telling you about Joe’s call. His mother, who was on Medicaid, received notice of an inheritance of $75,000. Joe wanted to figure out a way to keep that money since he and his brother had given Mom money to pay some of her medical expenses that she never repaid. I told Joe I didn’t think that was possible. The reason is because he didn’t document that the money was a loan. He said that he never could have foreseen that his mother could ever pay back the money. Unfortunately, from a Medicaid perspective, the State of New Jersey presumes that the money given to Mom is either income to support her or a gift. Remember, last week I told you that when Joe applied for Medicaid, the caseworker tried to peg it as income. Joe successfully fought that. However, he didn’t see the gift vs. loan issue coming. Not knowing the Medicaid rules as I do, how could he have? Without a written agreement at the time he gave Mom the money, the presumption is that there was never an intention for Mom to pay it back, making any attempt now to do so a
When Doing it Yourself (Medicaid) Can Take You Only So Far
We got a call the other day from Joe. He had prepared and filed his mother’s Medicaid application himself. From what he told us, it sounded like he did a great job. He had hit a bit of a snag because Joe and his brother had been helping Mom out with her expenses. At first, the Medicaid caseworker treated the transfers into Mom’s account as additional income to her. However, Joe was successfully able to prove that the money was given to Mom to help pay some of her medical expenses. It wasn’t support and shouldn’t affect her Medicaid eligibility. He was successful and Medicaid was approved. So why was he calling? Because his mother had inherited $75,000 from a family member. The first thing he wanted to know was whether there was any way they could keep the money. His thinking was that it would be a reimbursement by Mom to Joe and his brother. I told him that unfortunately I didn’t think so. However, there is a lesson here. Had Joe consulted with us before he applied for Medicaid I would have taken steps to make sure that he could recoup some of
Changes to New Jersey Medicaid Coming November 1 (Maybe)
Last week I wrote about changes to New Jersey’s Medicaid program that are coming November 1, specifically with regard to the income cap. Well, as with all things Medicaid, that date is not certain. It’s now looking like December 1 is the more realistic date. What is certain, however, is that whenever the changes do become effective, New Jersey’s Medically Needy program will be terminated. Anyone currently in the Medically Needy program will remain unaffected by the changes but if they should come off of that program and then reapply, the new rules would apply to them. So, what are the changes exactly? Anyone with income that exceeds the $2163 per month income limit (in 2014) will be able to place their excess income into a qualified income trust, commonly known as a Miller trust, and become eligible for New Jersey’s Medicaid Only program. For the past 20 years or so, New Jersey has had in place its Medically Needy program which covers people who have income over the cap. For that reason, Miller trusts couldn’t be used. Not a problem for nursing home residents but a definite problem for home based and assisted living
Changes to New Jersey Medicaid Coming November 1
I have written for many years about Medicaid’s strict income limit or “cap” Individuals over the cap can’t qualify for some Medicaid programs, such as assisted living or home based Medicaid. That’s because New Jersey is what is known as an income cap state with a Medically Needy program. For those seeking Medicaid for nursing home care there is the Medicaid Only program. The income cap is $2163 per month for 2014 and is adjusted every year for inflation. The income we are concerned with is that which you receive as long as you live, no matter what. Social Security and pensions typically fall into this category, but not interest and dividends from investments. (That’s because assets must be at less than $2000 so interest is nonexistent.) If you are over the income cap by even $1 you can’t qualify for the Medicaid Only program. That hasn’t been a problem for nursing home residents because the Medically Needy program covers them if their income is too high. But, the Medically Needy program has never been available to residents in the community, such as those in an assisted living facility or receiving long
New Jersey Supreme Court Recognizes the Value of Special Needs Planning
Sometimes as elder and disability attorneys we are criticized for helping our clients qualify for, or in some cases maintain, government needs based benefits. “Why should people be able to protect any of their assets and still qualify for government benefits”, they ask. “That’s not who the benefits are intended for.” The New Jersey Supreme Court, however, in a recent decision recognized the value of what we do to help our clients. The case is Saccone v. Board of Trustees of the Police and Firemen’s Retirement System. Thomas Saccone, a recently retired firefighter has a severely disabled adult son, Anthony, who lives with him. Anthony has been deemed totally disabled by the Social Security Administration and for many years has been receiving SSI and Medicaid benefits, which are a lifeline for him. Both these programs are needs based, meaning that in order to qualify an applicant must meet strict income and asset guidelines. After Tom retired, he began receiving retirement benefits from the Police and Firemen’s Retirement System (PFRS). He also, with the assistance of his elder law attorney, executed a will that contained a special needs trust (SNT) for Anthony’s benefit. He ran into a problem, however, when