For those who operate businesses, there should be a succession plan in place in the event that you cannot come back to work for some reason.  Your representative under a Power of Attorney is usually someone that you trust, but not necessarily someone who is going to know what is going on strategically and tactically with your business.

For this reason, it makes sense to have a comprehensive disability protection plan, so that your business can continue to run much more efficiently than it otherwise might, if you are not there to take care of things yourself.

A disability could also be very harmful to the business operations of clients who own significant investments in real estate.  Who will handle those things that are normally handled by the owner: ensuring that capital improvements are made, that tenants’ needs are satisfied, and that cash flow continues?  A good disability protection plan is going to ensure that the real estate continues to be developed, owned, or managed with the least amount of disruption possible.

Another area where disability can have a negative impact is on investments.  Many people think that if something should happen to them, the investments will just continue without problems.  However, in volatile markets or for investors who are active traders, a disability may leave someone else in control of the investment portfolio that doesn’t have a firm grasp on the overall investment strategy and risk tolerances.  This can lead to disastrous investment results.

There are, of course, many other instances where disability can have an impact, and where a good solid plan can be instrumental to the client’s continued success.  An important part of the integrated planning process will be to identify dangers and opportunities with regard to disability protection, and to make sure that you and your family have a solid disability protection plan in place.

This is an area where we can help you make a difference.

Mary recently visited the office attorney because she was confused. Her husband had been admitted to a nursing home, and Mary had been approached by the home’s caseworker. The caseworker asked for Mary’s financial information, and inquired how she intended to pay for her husband’s care, which would total more than $8,000.00 per month. She asked if Mary was going to apply for Medicaid, and that question was the source of Mary’s confusion. Her attorney explained to Mary that Medicaid is a government program to help pay for nursing home costs, but to qualify, Mary had to meet  certain income and asset restrictions.

Mary was even more confused. She told the attorney she was already on Medicare and that she didn’t know why she had to do anything else. She asked, “Why isn’t Medicare paying?” Mary’s attorney explained that Medicare is health insurance for individuals over 65 or those who have been disabled for two years. Medicaid, on the other hand, is a social program to pay for people with few assets or low income to ensure they have proper health care, including nursing home care. Mary didn’t know what to do. She didn’t think she had the money to pay for her husband’s care, but her attorney had mentioned that she wasn’t currently eligible for Medicaid benefits because she had too much money to qualify. He went on to explain how Medicaid planning works by sharing with Mary the information that follows.

There are two elements associated with Medicaid planning: the legal strategies needed to qualify for benefits, and the actual application process.

The first step of the planning is to make a series of legal and financial decisions that will result in Mary’s assets and income qualifying for Medicaid. There are several legal strategies to choose from, including the use of certain types of trusts.

For many clients the process seems overly complicated. Fortunately, it is possible to calculate and explain what assets are at risk and what assets would be immediately protected. It is also possible to determine when a person needing nursing care will qualify for Medicaid, and how to ensure that Medicaid begins paying as soon as legally possible, to minimize the loss of assets to the spouse who still lives at home. This stage of income and asset adjustments will usually result in a period of ineligibility for Medicaid benefits.

The second step of the planning is the formal qualification and application process. After all ineligibility periods created during the planning process have expired, there is a specific qualification and application process to receive benefits. The MPN attorney can be retained separately to assist in the filing of the application for Medicaid benefits with the local Medicaid department so that the nursing home resident can begin to receive the benefits.

It’s important to understand that Medicaid planning to get the nursing home resident eligible for Medicaid in the future is separate from and different than actually applying for the benefits from the local Medicaid Department. In fact, the second step will not be necessary if the person under care returns home, or if he or she does not survive the ineligibility period created under the plan. Like most financial and estate planning, Medicaid planning is always better if done in advance. However, even if tragedy strikes unexpectedly, it’s good to know that there are still options available to keep from depleting your assets.

Would it surprise you if your professional advisor  recommended “special needs” planning when you don’t have any special needs children or grandchildren?  It’s important to think about what might happen to your loved ones after you’re gone, that would impact your estate plan.  We try to plan for unforseen financial circumstances, and thus build into our plans some creditor protections for our beneficiaries whenever possible.  The same type of preventative planning can be done to protect loved ones in a tragedy that leads to physical and/or mental disability.  Consider what happened with the estate plan of John and Elizabeth.

John and Elizabeth had three children:  John Jr., Michelle, and Jerry.  Their estate planning attorney prepared a living trust that passed their estate in equal shares to the children in trust.  At John and Elizabeth’s death, the estate, which was estimated at $2,100,000 after taxes and expenses, would be divided among the children – $700,000 to each of their trusts, which they were free to spend as needed.

The trusts for the children provide that if John Jr., Michelle, or Jerry passes away, anything that’s left in their trust will be distributed to their own children.  All three of John and Elizabeth’s children had children of their own, and everyone in the extended family was in good health.

One day John, Elizabeth, and Jerry were traveling together and were involved in a terrible automobile accident.  John and Elizabeth were killed, and Jerry was injured so badly that he was no longer able to care for himself.

The person named as his guardian immediately sought help for Jerry’s medical expenses from Medicaid or other means-based government programs.  They were shocked to learn that Jerry’s entire inheritance of $700,000 would have to be spent on medical expenses before Medicaid would assist him.  As an alternative, the guardian learned that the assets could be placed in a special kind of trust to be used for Jerry’s benefit.  But at Jerry’s death, that trust must reimburse Medicaid for what was spent for care during his life.  The result in either case is that little or nothing will be left for Jerry’s children.

This result could have been avoided by creating a special needs trust.  A special needs trust is specially designed to hold the inheritance of a beneficiary, and to be used for needs above and beyond those covered by government programs. These trusts contain instructions that allow the Trustee to meet the needs of the beneficiary, but prohibit the Trustee from providing for those needs if already covered by Medicaid or other programs.  It also prohibits the Trustee from using the assets to reimburse any government program after the beneficiary’s death.

John and Elizabeth could have included instructions in their living trust that if one of their children were disabled, their share of the inheritance would pass to a special needs trust which could be used at the discretion of the Trustee.  The result in Jerry’s case would be that his needs would be met during his lifetime, and anything left over at the time of Jerry’s death could be passed on to his children.

After a brief conversation with the attorney, she discovered that Linda’s husband was a veteran of the Korean War. Even though Linda’s husband died eight years ago, the attorney was excited to tell them that Linda may be eligible for a little known but important benefit of up to $1,056 per month from the Veterans Administration. Linda was confused as her husband was not retired military. She had talked to the Veterans Administration and was advised no benefit was available to her. The attorney explained that the benefit was for veterans or their surviving spouse to help pay medically-related expenses, and while Linda was not currently qualified for the benefit, the attorney told her that with some simple planning, she could be eligible in less than 30 days.

In order to qualify for this benefit, three criteria must be met. First, the veteran (Linda’s husband) must have served a minimum of 90 days in active duty. Linda was confident this requirement had been met. The second requirement was that at least one of the 90 days of active duty must have been served during wartime. Since Linda’s husband served in the Korean War, she was confident he had met that condition. The third requirement was that Linda must be able to meet certain income and asset criteria. Linda became concerned because the attorney told her that she had too much money to qualify. He did assure her that with some simple planning, she would be eligible within 30 days. Linda was ecstatic. She began planning with the attorney immediately and he assisted her in applying for benefits the next month. Linda now receives $1,056 each month from the Veterans Administration to help pay for her assisted living care. Linda was relieved to know that the benefit would continue even if she was able to return home. Both Linda and Nicole were thrilled that they were able to preserve Linda’s assets and provide her with many options for the long term.

A surviving spouse, who qualifies for this Veterans’ Aid and Attendance Benefit, normally would receive $1,056 per month as a surviving spouse of a veteran. A single or widowed veteran may receive up to $1,644 per month. If the veteran is married, he or she can receive up to $1,949 per month.

Only an attorney or agent who is accredited with the Veterans Administration can assist with the application for benefits.

©2011 Law Office of Aaron L. Love, PC and E2M, LLC. All rights reserved.

The information contained on this web page is general by its nature. For that reason, no one should take any action based on the information contained in this webpage until having consulted a competent professional advisor or advisors. Nothing contained in this web page was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties under the Internal Revenue Code. No information contained on this webpage relating to any federal tax matter may be used by any person to support the promotion or marketing or to recommend any federal tax matter. Taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor with respect to any federal tax transaction or matter described on this webpage.                          

The choice of a lawyer is an important decision and should not be based solely upon advertisements.  The pictures featured herein represent simulation. Disregard this solicitation if you have already engaged a lawyer in connection with the legal matter referred to in this solicitation. You may wish to consult your lawyer or another lawyer instead of us.  The exact nature of your legal situation will depend on many facts not known to us at this time.  You should understand that the advice and information in this solicitation is general and that your own situation may vary. Further, neither the Supreme Court of Missouri nor the Missouri Bar reviews or approves certifying organizations or specialist designations. This disclosure and statement is required by rule of the Supreme Court of Missouri.

This information has been provided for informational purposes only. It does not constitute legal advice. The receipt of this information does not establish attorney-client privilege. Proper legal advice can only be given upon consideration of all the relevant facts and laws. Therefore, you should not act upon any of the information contained herein without seeking appropriate counsel.  

When Do YOU Need An Elder Law Attorney?

Here are some trigger questions to listen for:

1. What if I have to go into a nursing home, who will help me choose the right one?

2. Am I going to lose my house and all my money if I have to go into a nursing home?

3. Who will take care of my bills?

4. If I have another incident, who will help me make medical decisions?

5. What happens if I run out of money?                                 

6. If I get confused, who will help me figure things out regarding to my care?

7. What if I don’t want a particular person making decisions for me?

8. What if I want one person helping me with my financial decisions and a different person helping me with my medical decisions?

9. I helped my grandchild with their college tuition; will this affect my long term care?

10. Is there any special assistance for veterans?

11. (Charity, Faith-Based Organization, Agency, etc…) has been so good to me, how can I leave them some of my money?

The choice of a lawyer is an important decision and should not be based solely upon advertisements.  The pictures featured herein represent simulation.

A few months ago Brenda and I decided to commence the journey of “better health.” At that time, we were not thinking about health legacy, we were focused on the “now.” After evaluating different options for assistance, we chose to use Dr. Carl Davis of Integrative Health to be our medical guide on the journey. We initially had to establish a baseline with our health. So, this meant a complete physical and blood-tests. After that, education—which Dr. Davis is great at. Dr. Davis dismantled the myths, hype, and fads. He taught us the essential fundamentals of long-term quality health. He then helped us customize a roadmap for our journey. Next, it was time for a trip to the grocery and health stores. We needed healthier snack options, including more fruit and meal replacement bars. (Not just any would do, we needed to select bars with the right balance of protein, fat and carbohydrates).

My first official day down this new road was June 1st. On June 19th , I had my initial accountability visit with Dr. Davis. It was encouraging; the weigh-in revealed that it was not my imagination that my trousers were more comfortable. It also affirmed why I was using Dr. Davis as my guide. His diagnostic equipment revealed that one-half of my weight loss was muscle and bone mass (the other half was excess stored energy commonly called “fat”). Although I have begun the behavior modification needed for my diet, I hadn’t increased my exercise level. The diagnostics equipment exposed this fact without me needing to confess it.

The goal of the new program is long-term balanced health, not a quick fix. So, I am accountable to Dr. Davis to increase both my resistant and cardiovascular exercising before my next visit.

What is our real motivation for modifying our behavior to eat less, eat differently, and to exercise more? In the beginning, I thought it was more energy and one less notch on my belt. While reaching short-term mile markers provides encouragement, now it is the long-term result that provides the greatest motivation. Dr. Davis taught us about “morbidity compression,” which means rather than just accepting that the common American health experience is a steady decline until death, take action now to compress (limit) the decline to fewer years. None of us know how our future health will unfold, but Dr. Davis has encouraged us that consistently making better health decisions now increases the odds of better health for a longer period of time.

The quality of our health legacy directly impacts our quality of life in our later season of life and the amount of financial resources that we will need to expend to maintain our health. We want to avoid experiencing this sentiment, in America “we live on half of what we eat and the doctor lives on the other half.” [Adrian Rogers on the 6-24-09 broadcast of Love Worth Finding.]

Wishing for each of us success on our health legacy journey.