Friday, June 24, 2011

Medicaid & Elder Estate Planning

Nobody wants to end up in a nursing home and nor do they want to spend their money on a nursing home. Sadly, without proper Elder Estate Planning, this happens all too often. Most people make the mistake of assuming that they are just going to keel over one day and that will be how they die. However, the reverse is more apt to happen, where you live longer than expected with an extended illness. These extended illnesses often are unexpected and put a substantial burden on financial assets. People who do not plan for this possibility are likely to see their financial assets gone rather quickly. When you read these numbers, I want you to think about your financial assets or those of your family and consider how long it will last with these kind of expenses. Do not forgot about other expenses that will continue, such as mortgage, utilities, phone, etc. Keep in mind the expenses below are in addition to those.

In the Jacksonville, FL area, these are the Annual Costs for Long Term Care according to Genworth Financial, Inc.:

Home Care
Homemaker Services = $41,184
Home Health Aide = $45,760

Adult Day Health Care
Adult Day Health Care = $ 15,600

Assisted Living Facility
Private, one bedroom = $39,000

Nursing Home
Semi-private room = $76,238
Private room = $89,790


Home Health Aides help those who are elderly, disabled, or ill to live in their own homes or in residential care facilities instead of nursing homes. Typically used when family members do not have the time or resources to provide.

Homemaker Services make it possible for people to live in their own homes by helping them with household tasks that they cannot manage on their own such as cleaning house, cooking meals or running errands.

Adult Day Health Care provides service at a community-based center for adults who need assistance or supervision during the day, but who do not need round the clock care.

Assisted Living Facilities are living arrangements that provide personal care and health services for people who may need assistance with activities of daily living, but who wish to live as independently as possible and who do not need the level of care provided by a nursing home.

Nursing Home Care is for people who may need a higher level of supervision and care than provided by an assisted living facility. Skilled nursing care is provided 24 hours a day.

The Process of Aging

  1. Healthy and can take care of oneself.
  2. Healthy spouse or other family members takes care of ill spouse or parent.
  3. Ill person needs more care than family members can provide, so a Home Health Care Aide comes to the home.
  4. Ill person makes the move to an Assisted Living Facility to retain some independence, but still have nurses available for their health care. This option is not available for Medicaid patients.
  5. Ill person's condition now requires 24/7 round the clock care provided only by a nursing home.

What is Elder Estate Planning?

This type of planning can only be done in conjunction with an Elder Care Attorney experienced in Medicaid Planning and Veterans Benefits. If you are very wealthy and have $3,000,000 or more in liquid assets, then you can pay for your own Long Term Care Costs. However, if you have limited assets, (less than $3,000,000) you are over age 65 and have done nothing to plan for an unexpected extended illness, then you probably need Elder Estate Planning.

As a Chartered Advisor for Senior Living™, I have specialized training and education around Elder Care issues. Further, I look out for people and their best interests. This is not only true because I am a fiduciary, but it is true because it is the right thing to do.

There are some things that can be done to protect financial assets with Elder Estate Planning. These typically revolve around a few options.

  1. If you are healthy, then you may want to look at purchasing Long Term Care Insurance. A new alternative is a new hybrid type of Long Term Care Insurance where you do not lose your money if you never need Long Term Care.
  2. If you are not healthy, then you will need to position your financial assets to protect them against having to use them for your Long Term Care needs. This requires significant planning by someone like me and the use of an Elder Care Attorney.
  3. If you have plenty of assets that you have set aside, or you have already planned for the possibility of an extended illness and been to an Elder Care attorney and Chartered Advisor for Senior Living like me, then you probably only need an Elder Estate Planning Review.
  4. If you are a Veteran, then you may be eligible for VA Aid & Attendance benefits that could qualify a married couple with up to $1,949 per month of tax free funds. A VA Accredited Attorney can help you determine your eligibility.
One thing to know is that Medicaid does not pay for Assisted Living Facilities, if you can even qualify for Medicaid in the first place. Qualifying typically means having less than $2,000 in cash and where you have not given your money away in the last 5 years. The state that you are in can claw back those funds you gave away by way of a penalty. This penalty is essentially a waiting period before the state pays a dime towards your Long Term Care Costs. This penalty period can last up to 5 years, depending on the amount of the gift.

Medicaid qualification is complex and very tricky. You cannot navigate these waters on your own. You must hire a CASL® like me, in addition to a competent Elder Care Attorney proficient in Medicaid Planning and who is also a VA Accredited Attorney. (I can help you.)

I am thinking about doing a Seminar in conjunction with an Elder Care Attorney here in Jacksonville. I think it would be a good educational and informative event for seniors and concerned family members. There is a proper way to do Elder Estate Planning and that is with tender loving care.

If you would like more information about Elder Estate Planning, then feel free to contact me at (904) 262-0888 or you can email me at