Disability and special needs

give your house to your kids

(Video) Beware of What Happens When You Give Your House to Your Kids

When faced with the shocking costs of long-term care or a nursing home, many people have to scramble to figure out a way to pay the enormous fees. Realistically, the $6000+ a month it costs for a nursing home in Central Illinois is a big financial burden for most people. Many are left with Medicaid as the only possible way to get the care they need as they age. In fact, it is estimated that 70% of nursing home residents rely on Medicaid to pay their nursing home bill.

Without planning, the most common way to qualify for Medicaid is to “spend down” most of your assets.

So, in order to try and protect assets (like the family home), some people consider transferring their house or other assets to their kids. This can work for Medicaid, if done at least 5 years ahead of when care is needed, but there are risks involved.

The unintended consequences from this approach can create big problems. Learn more about the risks by downloading our guide, “12 Reasons Not to Give Your Property or Your Money to Your Kids Right Now,” or watch the following video where Attorney David Edwards explains a little more about the risks involved in giving money or property away to your children.

What You Need to Know About Nursing Care and Aging

So, what do nursing homes have to do with estate planning? When most people think about estate planning, they almost exclusively think of a Last Will & Testament, but a Will only works AFTER you pass away. A Will sets out what will happen, who’s in charge, and where your assets will go AFTER your death. Around the office, we refer to this as “death planning” because the plan you make goes into effect after you’re gone.

Because people are living longer, a new aspect of estate planning has emerged over the last decade. And this new type of planning is just as important as the traditional “death planning.” We call this form of planning, “Life Care Planning,” because it addresses the type of care you may need toward the end of your life.

It is difficult to face, but statistics tell us that 70% of people who reach the age of 70 will need some sort of long-term care (like a nursing home). The need for long-term care happens because of stroke, dementia or any number of health problems. When serious health issues crop up, you and your family will come face to face with the following questions:

  • How do we pay for good care?
  • How do we keep peace in the family during this extremely stressful time?
  • How do we protect our loved one’s life savings if the average cost of a nursing home in Central Illinois is $78,000/year?
  • How can we take maximum advantage of the help available to pay for good care?

The Basics of Needing Assistance as You Age

When it comes to needing assistance as you age, there are basically three choices:

  1. Stay at home with help. Many prefer to stay in their own home and hire someone to help with light housekeeping, meal preparation, bathing assistance or the activities of daily living (ADLs). However, in-home medical help can quickly become too expensive for most families.
  2. Move to an assisted living facility. At an assisted living facility, you have your own living space, meals provided in a common dining area, and social activities. In addition, they can help with care needs such as bathing and medication. In order to be in assisted living, one generally needs to be mobile (able to get to the dining room, get in and out of bed, etc.).
  3. Enter nursing home care. Most of us would like to avoid this option, but it is often a reality as medical complications from aging begin to stack up. In addition to meals and social activities, nursing homes provide around-the-clock-care, administer medications, offer rehabilitation (in the form of Physical Therapy or Occupational Therapy), etc.

Our Elder Care Advisors are a great resource for families during this stressful time of life. Give us a call 217-726-9200. We’re happy to help.

why you need long-term care planning

Why You Need Long-term Care Planning

Finding good care as you age has always been stressful. And thanks to the rising costs of long-term care in the U.S., the last decade of life is now more stressful than ever. Long-term care planning (or Life Care Planning) can help make sure you get good care, help find ways to pay for the care and decrease stress so you can enjoy time with your loved ones.

Attorney David Edwards shares some of his thoughts on why you need long-term care planning.

If you or someone you know could benefit from long-term care planning, we encourage you to attend one of our upcoming workshops entitled, “Aging With Confidence: 9 Keys to Wise Planning & Peace of Mind.” See the upcoming dates here. At this 1.5 hour workshop you’ll learn why planning must include both estate planning (death planning) and LIFE planning, the five life stages to plan for, and which stage you or your loved one are in, plus clear next steps to guide you and create an aging roadmap. Call 217-726-9200 to RSVP.

Veterans Aid & Attendance: A Little Known Way to Pay for Care as You Age

Many people are surprised to find out they qualify for aging veterans’ benefits without having a service-related disability. The VA offers benefits that can be used by a Veteran or their surviving spouse to help with costs for in-home medical care, assisted living facilities and even nursing homes. Yet, these are one of the least known benefits for long-term care. According to the VA, 72% of those eligible don’t end up using these benefits they earned in service to their country.

What You Need to Know

In order to qualify, you (or your spouse) need to have served at least 90 days with 1 day of service occurring during these wartime periods:

  • WWII: December 7, 1941- December 31, 1946
  • Korea: June 27, 1950 – January 31, 1955
  • Vietnam: August 5, 1964 (or Feburary 28, 1961 for those “in country”) – May 7, 1975
  • Gulf War: August 2, 1990 – date determined by Congress

VA Benefits FAQ

Do I need an attorney to apply for benefits? I was told I could apply on my own with the VA.

You do not have to have an attorney help you plan for VA benefits. However, many families try to apply on their own and then are denied or stuck in bureaucracy for up to 2 years. An elder law attorney accredited with the VA can help families plan ahead BEFORE applying so you can get the maximum benefits and get it as quickly as possible.

I was told that it is illegal for an attorney to charge for preparing a VA application. So, how can an attorney help? 

It is true that the application must be done free of charge. However, BEFORE you file the application, an experienced attorney can help make sure all your ducks are in a row so you will qualify for the maximum benefit. Planning before the application is the key to making sure everything works properly.

Do VA benefits cover in-home care benefits? 

This is one of the greatest things about VA benefits! It can help pay for in-home care–even care provided by a family member other than a spouse. Many people think they can’t afford it and are overjoyed to hear how they can qualify for help at home.

Don’t I have too many assets to qualify for aid and attendance benefits? 

There are asset limits, but also many planning options available. Through legal planning, such as a Veterans Asset Protection Trust, you can rearrange your finances in order to qualify.

What are the pitfalls of applying for VA benefits?

Sometimes people rearrange their finances to qualify for VA benefits, but later need more care and then need to apply for Medicaid benefits. An experienced elder law attorney can help think ahead to keep your plan flexible if you need more care later.

Isn’t it overwhelming to go through the application process?

It can be. Some families try it on their own and get denied. Others get caught in the endless bureaucracy. Other families intend to apply, but the process is so daunting that they never proceed, losing months or years of benefits. By working with an accredited VA and elder law attorney, you can plan ahead, make sure you get the benefits quickly, and avoid a lot of stress.

Applying for Veterans Benefits Can Be Complicated… We Can Help

When applying for VA benefits and paying for long-term care, there is a lot to consider. Experienced elder law attorneys work with families facing the challenges of aging everyday. They work to find solutions that will ease the strain and bring financial and emotional relief.

If you need to speak with someone right away about your current situation, feel free to call or email Edwards Group LLC. One of our Client Coordinators will be happy to help you by phone at 217-726-9200 or email at info@EdwardsGroupLLC.com.

Introducing: Edwards Group LLC Youtube Channel

Scheduling an initial meeting or attending a workshop can be a great way to learn about the legal tools available to you. But with the hectic nature of everyday life, watching a YouTube video can be a quicker and more efficient way to access basic estate planning information. Edwards Group is launching a YouTube Channel to help you accomplish your estate planning goals, regardless of how busy your everyday life is. Please click on the topics below to learn more from the Edwards Group’s Youtube Channel:

What is a trust?

What types of trusts are available to me? 

How can I find and pay for a good nursing home?

What is an Elder Law Attorney?

 What can I expect during the estate planning process?

What is life-care planning?

Why You Need Long-term Care Planning

One of the most important things an estate planning/elder law attorney can help you accomplish is taking good care of your loved ones as they age. Good elder law attorneys will also help find ways to pay for care. David Edwards, Estate Planning Attorney at Edwards Group LLC, explains how long-term care planning can help you accomplish these goals in the video below:

Scheduling an appointment or attending a workshop will help you learn more about the legal tools available to you. Your initial meeting with Edwards Group will last about 45 minutes. During that time you’ll talk with David to decide if he can be of any help to you and your family. Please contact Tarina at Tarina@EdwardsGroupLL.com to schedule an appointment today.

(Video) What is an elder law attorney?

As people live longer and longer, it is more and more important to have an experienced elder law attorney on your side. If you have a loved one who is aging, or are concerned about the issues of aging for yourself or a spouse, please read on to find out what elder law attorneys do and how to choose a good one…

Elder law attorneys work with families to solve problems related to aging. They meet with, and help, clients reach goals related to finances and healthcare. They often collaborate with other professionals such as financial advisors, life insurance professionals and tax professionals to ensure an effective comprehensive plan for clients.

In addition to general estate planning, elder law attorneys should have expertise in helping plan for incapacity (due to things like a stroke) or long-term care needs. When it comes to long-term care planning, elder law attorneys coordinate private and public resources to ensure the client’s right to quality care.

Founding attorney, David Edwards, explains a little about elder law attorneys in the short video above.

How do you choose a good elder law attorney?

Because elder law is a specialized field, it is important to ask some specific questions of any elder law attorney you are considering working with. It is important that you feel you can trust the attorney and his/her staff, otherwise you may not end up with effective solutions for your goals.

5 Questions to Ask an Elder Law Attorney

  1. How many Medicaid applications have you processed? Was the firm able to protect assets in most of these cases? Have you ever been turned down for an application?
  2. Are you accredited with the VA? As with many government programs, there are fairly strict standards that protect citizens from those looking to take advantage of seniors or Veterans. In order to be involved with a VA application, an attorney must be accredited by the VA. Read more about aging VA benefits here.
  3. Have you done VA apps for in-home care, assisted living and nursing home care? Each one is slightly different. Experience matters when it comes to the type of app your family might need.
  4. Do you have staff solely focused on helping families with long-term care issues? Helping families apply for public programs to offset the skyrocketing costs of long-term care is a very involved process. It’s probably no surprise that the bureaucracy of the process can be overwhelming (and tricky) for those who are not experienced with it. Mistakes during the process are very costly – emotionally and financially.
  5. Does the firm have free information to help families get started? This is a big decision.  Like we said above, you must be sure you can trust the attorney you choose to work with. Taking advantage of free educational materials is a great way to get to know the attorney. It’s also important to get to know his staff along with the general feel and philosophy of the firm. Not every family is a good fit for every attorney. It is a very personal decision.

You can read more about choosing an elder law attorney at the National Academy of Elder Law Attorneys’ website. Or, be sure to take a look at these additional articles on our website:

7 Ways Elder Law Attorneys Can Help if Your Loved One is Already in a Nursing Facility

9 Ways Elder Law Attorneys Can Help With In-home Care

Not Your Best Option: Life Estate Deeds

So, what are life estates or life estate deeds?

Sometimes, instead of using a trust, people will use a life estate deed to try and protect a house or farmland. This means they deed the land to their kids but reserve the right to still use the house or the farm as long as they are living. Because all of the instructions are contained in the deed itself, it can sound like a nice, simple solution. Life estates can seem like a cheaper and easier alternative to a trust…

But life estate deeds do not always work as advertised.

 

A Life Estate Case Study

Click here to download the Case Study as a PDF

We recently had a situation here at the office that is a good example of why life estates are generally not a good option.  Mom had put her house into a life estate a while back. She was now in a situation where she needed more care and was going to a nursing home. The family wanted to sell the house, but if they sold the house, then a percentage of the house would be considered an asset for the purposes of Medicaid. Even with good legal planning, some of the funds would have to be spent on nursing home costs, and the ultimate goal of planning is to protect your hard-earned money and assets (like your house) that you hoped could be a legacy for your family someday. 

4 Reasons Life Estates Don’t Work

1. They don’t protect ALL the value. People are surprised by how much of the value of their house or property is still considered theirs if they need Medicaid. This is all governed by a Medicaid table. (See it here.) So, what are the exact problems with life estates and why don’t life estate deeds “work”?

Here’s how the Medicaid table works: if someone is 65-years-old, Medicaid says that almost 68% of the house is still considered yours. At age 70, 60.5% is yours. At age 80, 43.66% of the value of the house still counts as yours. 

So what does this mean? It means that if you are 70-years-old, have a stroke and need to go to a nursing home, when your house is sold then 60.5% of the house sale money stays in your name and is exposed to long term care costs. This is true even if it has been more than 5 years since the deed was done.

2. You don’t own or fully control your house or property anymore. If something unexpected happens and you “need” to sell the property, you can’t without getting the kids to sign off on it, because they actually own the property. You don’t own it anymore (even though you have the right to use it for the rest of your life).

3. You can’t change who gets it after you are gone. With a deed, it’s a done deal. The house goes to your kids at your death — no matter what. There is no way to change it. So, if your child dies before you do, you can’t reconsider who the house or property goes to. It will go through his or her estate and be completely out of your control (even though you have the right to use it for the rest of your life).

4. Life estate deeds could prevent you from getting VA benefits. The VA sees things differently and assumes that any income interest or life estate you might have are entirely yours (and therefore counted as an asset). Depending on the situation, this could cause you to be denied VA benefits. For instance, farmland with a life estate would typically prevent VA benefits without further planning.

 What’s the Solution?

In contrast to the above issues with life estates, nest egg trusts can effectively address all of these issues:

• They can protect 100% of the value once 5 years has passed.

• You can be the trustee of the trust where your farm or home is kept, which means you can sell the property, buy a different house if you want, etc.

• You can reserve a rewrite power (called a “power of appointment”) so you can change who gets it at death. That way, if circumstances change, you can respond to them appropriately.

• A trust can be set up to allow VA benefits or be adjusted later to qualify for VA benefits.

Trusts are one of the best tools that we have in our legal toolbox to help clients, and our firm is one of the best at setting them up. If you are considering a life estate deed, please give us a call first to see if there are better options available for your unique situation.

Download the Life Estate Deeds Case Study for quick reference and to share with others.

As always, if you have any questions or concerns about estate planning or elder law, Medicaid planning, long-term care planning or Veterans benefits, please give us a call at 217-726-9200. We’d be more than happy to speak with you!

 

asset protection

Threats to Medicaid: Can You Prove It?

Cash payments or informal caregiver arrangements can affect your loved one’s ability to qualify for Medicaid upon going into a nursing home. Here’s what you need to know…

Giving Money to Family Can Jeopardize Medicaid Eligibility

When someone applies for Medicaid, the state looks back 5 years to see if any money was given away to the family. If so, the state imposes a penalty, or a delay of benefits. Sometimes money was clearly given to the family. Other times, it was used for the loved one, but the family can’t prove it. Check out the case below for a specific example.

Michigan Family’s Benefits Delayed – No Proof of Expenses

Betty Jensen was aging and suffering from dementia. She remained in her own home, but started needing more and more assistance to stay there. In May of 2011, her grandson (Jason) acted on her behalf and hired someone to be Ms. Jensen’s caregiver.

When he hired the caregiver, Jason did so informally without a written contract. For nearly a year, Jason paid the caregiver using almost $19,000 worth of Ms. Jensen’s assets. In March of 2012, Ms. Jensen’s dementia progressed to the point where she had to enter a nursing home.

In April of 2012, Jason applied for Medicaid benefits to help offset the cost of his grandmother’s care. While she was found eligible for benefits, the Department of Human Services (DHS) penalized her for “divesting” funds. They classified the payments to the caregiver (along with some other “gifts”) as “divestments.” That meant her Medicaid benefits were delayed for 7 months and 2 days.

Sadly, Ms. Jensen died before Medicaid started covering her nursing home expenses. (In Central Illinois, this delay would have cost Ms. Jensen and/or her family approximately $35,000!)

Her grandson appealed the ruling and lost, because the payments were made to the caregiver without a written agreement that should have been put into place before care began. The case was appealed several more times with varying results, but ultimately the courts sided with DHS, stating that an agreement with a caregiver needs to be written and official.

Caregiver Agreements in Illinois

The above case happened in Michigan, but the same thing could have easily happened in Illinois. The problem with paying cash for caregivers or hiring home help without any documentation is that there is no proof where the money went. Any “gifts” can cause a delay in benefits. And if a family member is taking out large amounts of cash or writing checks without documentation, the caseworkers may assume they are gifts.

Read more about ways elder law attorneys like us can help with in-home care: 9 Ways Elder Law Attorneys Can Help with In-home Care

The Complex World of Medicaid

Medicaid is our country’s largest healthcare benefits program, paying 70% of all nursing home bills in the US. One in six Americans are covered by it. The laws governing Medicaid are some of the most complex and confusing laws in existence. They are often nearly impossible to understand without highly experienced legal assistance. Without proper planning and advice, many people unnecessarily jeopardize their future care, their well-being, and the security of their family.

Medicaid Planning Can Help Even if You’re Already in Nursing Care

Medicaid planning (or what we here like to call Life Care Planning) ideally should be started when you are still able to make sound legal and financial decisions. (Somewhere around the age of 65.) That way you can still have control over what you want and how you want to live.

What many don’t know is that even if you’re already in a nursing home, it’s rarely too late to do planning that can save some of your financial resources. Read our article, “7 Ways an Elder Law Attorney Can Help Even if Your Loved One is in a Nursing Facility

To find out more about how to avoid the crushing costs of long-term care by planning ahead at every stage of life, give us a call at 217-726-9200 today!

The Top 2 Concerns of Planning

When a loved one is facing long-term care the first concern people have when they come to us for planning is how to get the best care possible. The second concern is how to pay for it.

Getting Good Care

People come to us worried about an aging family member or friend all the time. Their primary concerns are making sure their loved one is provided for, making sure they’re safe and getting the medical care that they need, while helping them have quality of life as much as possible. And these are the primary goals for our firm as well. We want to help decrease stress, increase quality of life and preserve family relationships during the last decades of life.

Paying for Care

This is the issue that usually adds the most stress for families because they don’t know where to turn or where to get good advice about the options that are out there. The scary truth is that a lot of people are given wrong information and think there’s nothing that can be done if you can’t afford care on your own.

In reality, there are many planning tools that we can use to protect assets and gain benefits, even if someone is already in a nursing home. Our firm finds ways to maximize benefits available to pay for care, and protect some of the assets that mom hoped she would leave her family someday. Even if somebody’s been in a nursing home for months or years, it’s oftentimes not too late to get benefits to pay for care.

As long as somebody is writing personal checks to the nursing home every month, it is not too late to plan and save some of those assets.

The key is working with an experienced elder law attorney. Most “estate planning” attorneys just do what we call “death planning” (last will and testament, etc.), but elder law attorneys (like Edwards Group) have specialized training and expertise, and that means we deal with Medicaid and VA benefits every single day. We help you use the legal tools to their full advantage. And that means, in most cases, we can qualify someone for benefits faster than they ever expected, get more benefits than they ever expected, and in the end, protect much more of their life savings than they thought possible!

apply for medicaid; medicaid eligibility

6 Reasons You Should Never Apply for Medicaid On Your Own

While it may seem like a good idea that things like Medicaid applications and Veterans benefit apps are accessible and do-it-yourself, as with many things relating to government, it’s really not that simple. There are many things that can go wrong when people apply for Medicaid without the help of an experienced guide.

Here are six reasons you should not apply for Medicaid without the help of an experienced elder law attorney:

 

1. You’ll lose all your hard-earned money.

Typically, when someone goes into a nursing home, the admissions people or case workers at the home tell people, “Spend all your money and then let us know when you’re ready to apply for Medicaid.” The best solution they can offer families is to “spend down” every dime of their hard-earned money on the astronomical price of nursing care! Planning with an experienced elder law attorney who is familiar with the ins and outs of Medicaid, oftentimes results in protecting 50% of the life savings so it can be used for later expenses or as a legacy for your family.

2. You’ll go crazy with the stress of the complex and bureaucratic process.

If you’ve been an adult for any amount of time then you know how difficult it can be to deal with government agencies. We have endless stories of families who get caught up in the paperwork, losing money and time with their aging loved ones while they “fight” the process trying to qualify and apply for help through Medicaid. (The picture above is three Medicaid applications before we sent them off for approval. It’s A LOT of paperwork!)

3. You (or your loved one) will be left with $1 a day to live on.

Without proper Medicaid planning, all your funds will have to be “spent down” in order to allow the Medicaid benefits to begin. This basically means that your family will have to spend their own money if you need something outside of the included costs of the nursing home. Learn more about that when you subscribe to our Medicaid Planning e-course.

4. You may not qualify for benefits because of a simple error on the Medicaid application.

Again, we have a lot of stories about families who filled something out wrong, didn’t get something in on time or didn’t phrase something just right. We also have stories about the caseworkers themselves making mistakes that disqualified the families. These mistakes are just too costly.

5. Delays in the application could cost tens of thousands of dollars.

People who apply for Medicaid benefits on their own can take longer to jump through all the hoops which can delay the start of money to pay for care. On average, it takes us 6 to 8 weeks to get a Medicaid application filed, but it can take a year or longer to get approved. That timeline can be even longer when people try to do it on their own. We have 2.5 team members who are dedicated to this process alone, and they are quite skilled at what they do. (Read about our Elder Care Advisor, Melissa Coulter.)

6. You won’t have anyone to turn to for help.

Filling out a Medicaid application is unlike anything you’ve ever done before and much more difficult than most people imagine. You don’t have to do it alone. Relying on the knowledge and expertise of a trustworthy elder law attorney who has been down this road hundreds of times before is invaluable. We know this because we have people come to us all the time who have tried to do a Medicaid application on their own and failed. We absolutely hate to see this. We also hear from grateful clients on a regular basis who are so glad they turned to us for help. (See a testimonial like this below.)

Medicaid Planning is Some of the Best Money You’ll Ever Spend

The cost of an elder law attorney who helps you plan and apply for Medicaid is more than offset by what you save in out-of-pocket nursing home costs. Without an attorney, all of your family’s money will inevitably go to the nursing home. With the help of an elder law attorney, even after legal fees, you’ll be left with more money than if you had done the application on your own. If the money is going to disappear anyway, why not use that money to pay an attorney who will guide your family through the stressful benefits process as quickly as possible, maximizing the money available to pay for care?

With good planning, you are more proactive; therefore you get much better results. (It’s a lot like using an accountant to make sure you don’t pay too many taxes.) Working with an elder law attorney insures that you get the best possible result instead of the worst possible result. And the worst possible result is what most people believe they HAVE TO DO when it comes to paying for nursing care — spend all their money until it’s gone. The best possible result means pursuing all the benefits that are legally available (like taking all the possible tax deductions when working on your taxes), and protecting your hard-earned money so it’s available to you and your family to use later on.

Here’s what one of our clients had to say about the process after it was done:

“I want to thank you again for all your hard work in helping my family. It has meant so much to have someone to answer questions, explain things and especially hold my hand through this amazing journey. I had moments where I wondered, ‘What am I doing spending [so much] of my parent’s money?’ Then I would wonder if we were ever going to get everything transferred, completed and filed. [When] I began to see the light at the end of the tunnel, I knew in my heart we had made the right decision. The professionalism shown by Edwards Group, which includes [Melissa] and Dave, has far exceeded my expectation. On behalf of my family, thank you again for all the phone calls, emails, texts, and especially the support. You have been amazing.”  DC from Glendale, MO

If you’d like to continue learning more about Medicaid Planning and how an experienced elder law attorney can help make the process of applying for Medicaid faster and less stressful, be sure to check out our FREE Medicaid Planning e-course. You’ll receive several emails in succession telling you about the Medicaid application process while also giving you tangible steps you can take to begin the process. If your family is in a nursing home crisis situation, please call us right away at 217-726-9200. Our staff will be happy to assist you and answer your questions.