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    An initial consultation, up to one hour, is FREE for general estate planning, estate administration, probate, GUARDIANSHIP or a family law matter if you bring your completed Questionnaire with attachments and all decision-makers attend; otherwise, we charge by the hour.  An initial consultation for long term care planning with Medicaid &/or VA Pension costs $500.  We charge by the hour, in one-tenth of an hour (6 minute) increments, for all time spent on real estate, corporate and other business matters, or for any advice outside the initial consultation when you have not engaged us under a flat fee agreement.  Any quote we give you for a flat fee is binding if we receive all requested information and are engaged to commence work within 30 days.  We accept Visa and MasterCard but assess a 2% surcharge when doing so.  Please come to any initial consultation prepared to pay the initial consultation charge (for Medicaid/VA, real estate, etc.), and/or one-half of any flat fee, or a retainer for hourly work.

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Elder Law

Preparing for the Costs of Long Term Care

Current statistics indicate that 70% of Americans who are now age 65 or older will need long term care at some point. The average age of admittance to a nursing home is 79, with an average length of stay of 2.2 years for men and 3.7 years for women. But stays for physically healthy individuals with dementia are often years longer. The life expectancy of a woman now age 65 is 85.5 years; but for a woman now age 85 life expectancy is 92. It’s about 2 years less for a man.

Many people think long term care considerations are limited to seniors or disabled individuals who reside in a nursing home. But that is not accurate.  Many individuals reach a point in life – whether for a temporary period of rehabilitation or for the duration of life – during which they can remain at home and live independently if they can get general assistance with certain tasks incidental to independent living. Such tasks are generally encompassed by companion care, and include:

  •  Housework;
  •  Managing money;
  •  Taking and managing medication;
  •  Meal preparation and clean-up;
  •  Grocery and clothes shopping;
  •  Use of the telephone and other communication devices;
  •  Pet care; and
  •  Responding to emergency alerts.

 

The cost of assistance with such companion care services is typically not considered a medical expense. By contrast, the cost of assistance with activities of daily living (ADLs) typically is. ADLs involve matters directly related to a person’s basic functioning as an adult such as eating, toileting, ambulation (getting out of bed to a chair, out of a chair to a toilet, etc.), dealing with incontinence issues, the ability to make adjustments to a prosthetic limb, matters of personal hygiene (bathing, dressing and maintaining appearance), or the ability to live without protection from the hazards incident to one’s daily environment. This distinction is critical because eligibility for both Medicaid and Veterans Administration (VA) pension benefits are greatly affected by the amount of your unreimbursed medical expenses (UMEs). In addition, it means that the cost of companion care is often not covered by long term care insurance (LTCI), whereas the cost of assistance with ADLs is. Finally, ADLs for purposes of Medicaid vary from ADLs for purposes of the VA Pension. We can help you understand all of this.

While some seniors require assistance with ADLs, others are physically strong but must live in a protective environment due to dementia. Companion care at home may be adequate to a point but seniors can become a danger to themselves or others by wandering off, leaving a stove turned on or putting metal in a microwave. At that time, he or she may need to move to an assisted living facility or nursing home that specializes in memory care. Such protective care should be deemed to be a medical expense once the senior achieves a certain score on a cognitive performance test.  If the senior did not sign a durable power of attorney and healthcare power of attorney while still mentally competent, you may need to have a guardian appointed so that checks can be written, care agreements can be signed and other protective actions can be taken.  We can help you with that.

 

There are three ways to pay for long term health care:

  • Out-of-pocket (private pay);
  • With the proceeds of a long term care insurance policy; or
  • With the help of the VA Pension and/or Medicaid.

 

Unless you are wealthy the costs of long term health care can impoverish you and your spouse and require you to quickly spend what it has taken a lifetime to accumulate. Even if you are not able to leave assets to the next generation almost everyone wants to avoid becoming financially dependent on children or grandchildren. For that reason, we advise the purchase of LTCI when you can qualify for it medically and can afford it. The younger you are when you apply the lower the premiums will be. The "sweet spot" to purchase such insurance is between ages 55 and 66; LTCI becomes quite difficult to purchase after age 65 although a few companies will write it until age 82.  We would be pleased to refer you to a reputable LTCI agent.

With or without LTCI we can help you protect your assets while becoming eligible for Medicaid and VA Pension benefits. And the good news is, the strategies we employ to help you with benefit eligibility also help to protect you against the unscrupulous people who prey on the elderly and infirm. Sadly, this is an ever-increasing concern as well.

If you would like our assistance with long term care planning please scroll to the bottom of this page. For more information about Medicaid and VA pension benefits please read below or see the FAQs page.

 

 

Medicaid

You cannot become eligible for Medicaid in Arkansas until both your assets and your income are below certain limits. Generally speaking, you must liquidate most of your assets, except for your home (up to an equity limit that is adjusted annually) and certain other “excluded resources,” but including the cash value of all life insurance policies, and then spend down the proceeds until you have only $2,000 remaining. If you have a spouse not on Medicaid he or she may retain one-half of your joint assets, up to $120,900.  In addition to these resource limitations, your household income must be less than $2,205.00 per month (all 2017 figures). But these asset and income limits are precisely where we can help you!

 

Asset Protection with Advance Planning

By planning in advance, you can become eligible for Medicaid benefits while protecting and preserving almost unlimited assets.  We accomplish this by creating an irrevocable trust and then transferring your assets to that trust. But this needs to be completed at least 60 months (5 years) before you or your spouse applies for Medicaid. And Medicaid will ignore a premarital agreement; Medicaid looks at household assets and household income. In addition to creating the irrevocable trust, we will prepare for you a General Durable Power of Attorney, Health Care Power of Attorney, Living Will, HIPAA Authorization, and other documents integral to a comprehensive estate plan. And, if properly funded, this irrevocable trust will allow you to avoid the cost, tedium and time delay caused by the probate of a Will. In essence, long term care planning accomplishes everything that general estate planning does and, in addition, it protects your assets from creditors, long term care expenses and those who prey on the elderly.

If we create an irrevocable trust for you, you will be the trust maker, often referred to as the grantor or settlor of the trust. But, unlike with a revocable trust that we create for general estate planning purposes, you cannot be a trustee or a beneficiary. Rather, you must cede complete control over all of the assets that you transfer to the trust. You can name one or more adult children, close friends or a niece or nephew as trustee, or you can name a corporate trust officer. Once created, an irrevocable trust cannot be amended or revoked. However, assets may be sold, reinvested and spent consistent with the trust terms.

 

Dealing with Excess Income

You likely will not need long term care Medicaid benefits until you require extensive home health care or move to an assisted living facility or nursing home. At that point, your unreimbursed medical expenses (UMEs) will equal several thousand dollars a month. If your monthly income exceeds the income limit stated above, but does not greatly exceed the cost of your monthly UMEs, we can create a qualified income trust, often referred to as a Miller Trust, and assign your income to that trust, so that your income does not make you ineligible for Medicaid. The good news is, a Miller Trust need not be created until you need it – there is no advance planning required. But once created, strict rules apply to disbursements from the trust, and on the death of the Medicaid recipient, assets remaining in the trust will go toward reimbursing Medicaid.

 

Asset Protection in a Crisis

“Crisis” Medicaid planning is undertaken once a person requires assistance with activities of daily living and substantial health care expenses must be incurred. We can employ certain strategies to save close to one-half of total household assets (up to a few hundred thousand dollars). However, these strategies cannot be undertaken if an owner of those assets loses mental capacity before executing a carefully drafted, comprehensive durable power of attorney.  Neither a “standard” power of attorney nor a guardianship will suffice.  The biggest disadvantages of crisis planning are that it can save far less assets than advance planning, and even if you are successful in obtaining Medicaid benefits your assets are then subject to estate recovery by the Department of Human Services (“DHS”). To explain, after a Medicaid recipient dies, DHS can assert a lien against his or her real and personal property in an effort to obtain reimbursement of all sums expended by Medicaid. (Estate recovery does not come into play if your assets are owned by an irrevocable trust.) So why bother with crisis planning? We can save some portion of the Medicaid applicant’s assets, and the Medicaid rate for health care is lower than the private pay rate; so the amount DHS is entitled to recover will be less than what you would have paid for the same care without Medicaid.

If you would like our assistance with Medicaid eligibility planning – whether advance planning or in a crisis – please scroll to the bottom of this page. For more information about activities of daily living (ADLs), please read the Elder Law section above or visit the FAQs page. If you are a veteran, or the surviving spouse of a veteran, please read below about VA Pension benefits.

 

 

VA Pension

The VA Pension provides tax-free income to any qualified veteran, the surviving spouse of such veteran, a dependent child in the custody of the veteran or surviving spouse, or an adult child of the veteran if that child became disabled before reaching 18 years of age. The highest level of income available under the VA Pension is paid pursuant to the Aid and Attendance Pension (A&A). The A&A Pension for a single veteran is $1,788/month ($21,456/year); for a married veteran with no dependent children the A&A Pension is $2,120/month ($25,440/year). And this tax-free income that each veteran earned with his or her military service is paid directly to the veteran or qualifying family member.

VA Pension is different from VA Compensation.  VA Compensation is awarded to any veteran who was injured, or who aggravated an injury, in the line of duty if it left the veteran with a disability rating of 10% or greater. Compensation is not dependent on the veteran’s income or assets. We do not handle VA Compensation cases.

We can assist you with your VA Pension claim. The VA Pension does not require any overseas deployment, combat duty or injury in the line of duty, nor does the medical condition being treated need to be in any way related to the veteran’s military service.

To be eligible to receive the VA Pension, the veteran must have:

  • Served 90 or more days of active duty (except a veteran serving since 1980 must have served at least two continuous years), at least one day of which was during a wartime period;
  • Received a discharge that was other than dishonorable;
  • Be over age 65 or disabled; and
  • Meet a financial needs test which looks at both household assets and household income.

 

The “wartime periods” are:

  • World War II  —  December 7, 1941 to December 31, 1946
  • Korea  —  June 27, 1950 to December 31, 1955
  • Vietnam  —  August 5, 1964 to May 7, 1975 (Feb 28, 1961 if actually in Vietnam)
  • Gulf War  —  August 2, 1990 to a date yet to be determined

 

Complying with Asset Limits

If a veteran meets the first three criteria above, the asset and income limitations can often be satisfied with strategic planning. Although the VA imposes no straightforward asset limit as does Medicaid, a rule of thumb is that a married applicant cannot have assets valued at more than $80,000, and a single veteran cannot have assets valued at more than $40,000 to $50,000, in each instance exclusive of a home and reasonable personal possessions. As a person ages and so life expectancy is shorter, the allowed amounts decrease. But these asset limitations can be satisfied by creating an irrevocable trust and transferring to that trust most of the assets owned by the veteran and his or her spouse. As discussed under Medicaid, the creation of an irrevocable trust will always involve other parties, it will avoid probate, and it will be one part of a comprehensive estate plan. Congress has not enacted a “lookback” period or asset transfer penalty for the VA Pension like the 60 month lookback period applicable to Medicaid. But VA officers who review VA Pension applications and approve or deny claims are beginning to impose a lookback. In addition, the VA has proposed new rules, now under review, which would create a 36 month lookback.

 

Complying with Income Limits

Unless your social security benefits are extremely low and you have no other source of income, you are not likely to qualify for the VA Pension until the cost of your household’s unreimbursed medical expenses (UMEs) exceeds or approximates the monthly income of all persons in the household.  But the premiums for health insurance, including Medicare, and for traditional long term care insurance, are all considered medical expenses, as are the amounts paid to a nursing home or an assisted living facility that provides significant help with activities of daily living (ADLs). And, if properly documented, payments to friends or family members who provide home health care may be considered to be UMEs. So when those are added to out of pocket physician and hospital costs they often exceed income. For more information about ADLs, please read Elder Law above or visit the FAQs page.

 

Survivor’s Benefits

A reduced VA Pension is available to the surviving spouse of a deceased veteran. For a surviving spouse to qualify for the VA Pension, she or he must have been married to the veteran for at least one year prior to the veteran’s death, and lived with the veteran at the time of that death (subject to a separation due solely to hospitalization, nursing home stay, or abuse). With a very narrow exception, the surviving spouse cannot have remarried. A woman who was never legally married to a veteran but who has a child by the veteran may also be eligible. If you seek surviving spouse benefits, please bring us your marriage license or certificate and your veteran spouse’s death certificate.

 

Other Benefits

Once the VA A&A Pension is awarded, a veteran is eligible for free eye glasses, hearing aids, medications, medical equipment and incontinence supplies. These may be obtained at a VA hospital or by U.S. Mail.

If you are medically and financially eligible for VA Pension benefits without strategic planning, you can obtain free assistance with a VA Pension application from a veteran service officer. Most counties in Arkansas have one.

 

request a consultation

If you wish to plan for long term care expenses, including Medicaid and/or the VA Pension, please request a consultation regarding Long Term Care Planning by clicking on the orange tab and completing the form. Or, you may call our office. We will send you a VA and Medicaid Planning Questionnaire. Once completed by you, it will give us an overview of your health condition, veteran status (if any), assets, income, typical monthly UMEs and other factors. At the initial consultation, we will review your completed Questionnaire, answer any basic questions, and give you a brief overview of the applicable rules and our planning process. If your situation is straightforward we will present options to you and, if possible and you prefer it, direct you as to the appropriate steps to take on your own. For that reason, we charge $500 for an initial consultation up to 2 hours. You will get the most value for your money if you bring the accurately completed Questionnaire with you to the appointment and all decision makers attend; that means both spouses, if married and mentally competent, and anyone who holds a power of attorney or acts as a guardian or trustee for the prospective applicant or spouse (also bring the power of attorney, guardianship papers or trust). Adult children and other advisors are welcome and encouraged to attend.

If you need further assistance with benefit eligibility following the initial consultation, we will ask you to sign an Engagement Agreement and pay our estimated fee to analyze your Questionnaire (and likely other information you will need to provide) and formulate a plan.  Within two weeks after we receive all necessary information, we will issue our planning recommendations and quote you a fixed price to accomplish that plan.  You will then be free to proceed with the plan, or not. If a plan and price are agreed upon, you will pay at least one-half of our fee up front, after which we will create an irrevocable trust and/or other estate planning documents within the agreed time frame (typically two to four weeks), when you will return to sign the documents and pay any balance of our fee. We will accept a Visa or MasterCard in payment for our services but we assess a 2% surcharge when doing so. If at any time you decide not to proceed further, we will refund any portion of your payment which we have not then earned. If at the conclusion of the initial consultation you do not wish to engage us to do further work, but you later have additional questions, we will be pleased to help you – whether in person, by phone or email – at our standard hourly rates pursuant to our standard Fee and Billing Policies; we bill our time in one-tenth of an hour (6 minute) increments.

 

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Thank you for visiting our website.

The attorneys of Ball Corley PLLC proudly serve the entire State of Arkansas with respect to:  Estate Planning (wills, trusts, powers of attorney, HIPAA authorizations, living wills and visitation directives); Elder Law (Medicaid, veterans administration pension and long term care planning); Probate; Trust and Estate Administration; Guardianships; Family Law (adoption, divorce and separation, child custody and visitation, support obligations, post-decree modification and paternity); Premarital Agreements; Collaborative Law; Mediation; LGBT Laws; and Real Estate Transactions.

Notice and Disclaimer: This Ball Corley PLLC website is intended only to give general information which we believe may be helpful; it is not intended to be advertising or a solicitation, or to provide legal advice. If our website includes any links to other sites they are for information only and should not be interpreted as an endorsement. Although we try to keep the information on our website current it may not always reflect the latest laws, decisions or dollar amounts. And, the general rules provided may not apply to your specific situation; for every general rule there are multiple exceptions to that rule. Therefore, we strongly recommend that you consult with us or another qualified licensed attorney rather than taking any action in reliance on any information contained in this website. Neither your visit to our website, nor your phone call or email to our office, will create an attorney-client relationship with Ball Corley PLLC or its attorneys; such a relationship can be established only by our written agreement to represent you.

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