“What is Elder Law and Why is it Important to You?” by Courtney L. Fletcher

Elder Law is the practice of law dealing with issues affecting the elderly. It can range from preparing estate planning documents for clients that desire to ensure that their property passes at their death to their chosen beneficiaries, to counseling families regarding crisis planning due to the concern that a family member may be forced to enter a nursing home. There are 37 million Americans age 65 or older accounting for 12% of the population. This percentage is expected to double by 2030. As a result of the aging population, the issues concerning the elderly will continue to grow and will continue to affect all areas of the practice of law and clients at every financial level.
One of the biggest concerns facing the elderly population is the possibility of paying for skilled nursing home care. For healthy, younger individuals who have significant assets and income, one possibility of planning for this concern is to purchase long-term care insurance to supplement the costs of nursing home care. This is particularly the case where preservation of those assets and income is a primary goal. Depending upon the policy purchased, it is possible to provide for in-home care and lessor degrees of care, such as assisted living. Obviously, there are many personal factors to consider, including the cost of the policy, the benefits the policy covers and the financial solvency of the insurer, just to name a few. It is also important to ensure that the policy qualifies as a “tax-qualified” long term care insurance policy for purposes of deducting the cost of the premiums. It is vital that the individual consult with a qualified advisor to discuss the type of products available and which product, if any, best suits their needs.
If an individual has Medicare Part A, that program can step in and pay inpatient hospital care and skilled nursing care for a certain period of time during a “benefit period” or time of illness. Once this specified time period runs out, Medicare may no longer provide skilled nursing home care. At that point, the individual must either private pay or apply for assistance under the Medicaid program. Since Medicaid is a need-based program and only covers skilled nursing home care (for VendorMedicaid purposes), there are very specific rules that must be met before an individual can qualify for services. First, the individual must be in need of a nursing facility level of care. Second, the individual must not own more than $999.99 in “countable resources” or non-exempt assets (or, if married, and both spouses are in the nursing home, this limit is $1,999.99). There are several assets that are considered “exempt” and are not counted for purposes of determining eligibility, including the family home (which will remain exempt during the individual’s lifetime, subject to some important rules), an irrevocable pre-need funeral plan, burial plot, personal jewelry, household goods and furniture, and one vehicle.
It is important to consult with an attorney who is familiar with Medicaid rules prior to making any transfers of property for eligibility purposes. Medicaid has a five (5) year look-back period for any transfers made of an individual’s property for less than full and valid consideration. If an application is made for benefits prior to the expiration of the look-back period, then a penalty period will be assessed and the individual will not be deemed to qualify for services until the expiration of that penalty period. There are some planning options available, especially in situations where the spouse remains at home and does not require skilled nursing care assistance.
It is also vital to have estate planning documents in place, especially a durable power of attorney for financial purposes and a durable power of attorney for health care and health care treatment directive. These documents will ensure that someone is able to make financial and health care decisions in the event the individual becomes incapacitated. This should avoid the need to establish a guardianship or conservatorship for the incapacitated person. A revocable trust will ensure that the individual’s property avoids probate and further can provide for creation of ongoing trusts for the benefit of children and descendants.
Whether you are already 65 or a long way from it, it is important to have a conversation with your attorney regarding your goals and concerns for your “golden years”. Some advanced planning now may make all the difference in the options available to you in providing for your enjoyment of life down the road!