You’ve just come from taking your elderly mother to her doctor and learned that she needs to be admitted to a long-term care facility. Your mother isn’t a wealthy woman and you have no idea how she is going to pay for long-term care. This would be a good time to consult an elder law attorney and here’s why:
A good elder law attorney can help you devise a plan to pay for your mother’s long-term care, make suggestions on ways your mother can preserve some of her assets and which assets need to be liquidated, sold, etc. If your elder law attorney determines that your mother will immediately qualify for Medicaid benefits, she will need to provide the following information as part of the Medicaid application process:
1. Non-Financial Documents
a. Identification – picture ID (driver’s license, state ID)
b. Social Security card(s)
c. Birth verification (birth certificate, baptismal certificate or school record with date of birth)
d. Marriage license or death certificate/divorce decree of spouse
e. Health Insurance Identification Card (for all insurance coverage including Medicare, Medicare Supplemental, etc.)
f. Military discharge records including original Form DD-214
g. Names, addresses, phone numbers of all children
h. Listing of assets sold or given away in the last 5 years
2. Legal Documents
a. Most recent Health Care Power of Attorney, Living Will, General Durable Power of Attorney, Will
b. Trust documents
c. Business entity/partnership agreements
d. Resident admission agreement (if in assisted living or nursing home)
Rumors, gossip and hearsay are your worst enemy when it comes to long-term care planning. Many people delay planning because they hear one thing or another from a family member or friend, but they never take the time to investigate whether the information is accurate or if it even applies to their own situation. Before you assume you won’t qualify for Medicaid benefits for nursing home care, or wouldn’t benefit from long-term care planning, do yourself a favor and visit an experienced elder law attorney to get the FACTS. In the meantime, here are a few common long-term care misunderstandings held by many clients:
1. To qualify for Medicaid benefits, I must get rid of all my assets. False. In Kansas, although you’re not allowed more than $2,000 in “countable assets” to receive Medicaid, not all of your assets are counted toward computing your eligibility. For example, in Kansas, your house is an exempt asset so long as your spouse resides there or there is a chance that you will return home. Other exemptions include assets that can’t be converted to cash, burial plots, business or income-producing property, household furnishings, personal property, pre-paid funeral plans and a vehicle. Further, if you are married, your spouse (a/k/a well-spouse or non-applicant) may keep a portion of your countable assets as his/her “community spouse resource allowance”. However, something everyone should keep in mind, is that many of the aforementioned assets lose their exempt status after death.
Dementia is a frightening diagnosis for any family.
The life expectancy for an individual with dementia can vary greatly depending on the exact diagnosis but patients routinely live more than five, eight or even 12 years after they first begin to require full-time care. These numbers vary depending on the individual and advancing treatments but they give you a better idea of what you might expect should you or a family member receive a dementia diagnosis.
Even with the best of intentions to receive care at home, very few family members are equipped to provide the health and safety needs of a patient with advanced dementia. As a result, most dementia patients end up needing full-time nursing home care. Will you be financially able to pay for that care?
In Kansas, the average annual cost for around-the-clock care in a nursing home, with a semi-private room, is a little over $65,000, according to a 2019 Genworth report. This means that an individual needing eight years of full-time nursing home care would pay more than $520,000 over that time period. For many families, this equates to most or all the wealth they have accumulated over their lifetime.
Medicare does NOT pay for long-term care in a nursing home. It will cover some expenses related to temporary admissions, but not long-term care. Medicaid is the State agency that provides payment for long-term care but only individuals who have less than $2,000 in countable resources are eligible. The application process for Medicaid can be confusing and time consuming. That process is even further complicated if you feel you have been unfairly denied Medicaid assistance (a common event, even for clearly qualified applicants).
If the task of helping your parents coordinate medical services, home repairs, caregivers, and legal and financial consultants has fallen to you, below is some important information you might need.
As your parents’ physical and/or mental health declines, they may require skilled nursing home care. If this is necessary, you will need to be aware of your parents’ financial information to determine if they will have enough to pay for their care versus if you will need State assistance. Similarly, you should have a comprehensive knowledge of their medical needs and treatments to ensure adequate health services will be provided to your parents. If your parents are agreeable, begin to accumulate this information now before you are faced with an emergency nursing home admission or a death. Gathering this information while your parents are alive and able to advise you on the location of assets, names of advisers, etc. will save you countless headaches - trust us!
What’s the easiest way to gather this information? Your parents can most easily assemble the necessary documents and contact information, if they are in good health and willing. If they struggle with their health or organizational skills, they could legally appoint you to serve as an immediate Power of Attorney for their financial and health care matters, to help them with this process. These Powers of Attorney would allow you to communicate with any business or health care agent working with your parents even if your parents still have capacity. You could also make decisions on their behalf, should that become necessary. As a legally appointed Power of Attorney, you can pay their bills, sign contracts, make investments, etc… Be aware, however, with this power comes greater legal responsibility. Your decisions must be beneficial to your parents and be in keeping with their standard practices. You will be held to a higher standard by the Court if it is determined that you acted against your parents’ best interests.
Family gatherings, holidays and special events are perfect opportunities to check in on your aging loved one’s health and well-being. If you suspect your loved one may be struggling with their mental health, here are a few signs you can watch for at your next visit:
1. Confusion, or increased problems with decision-making.
2. Loss of weight and decrease (or abnormal increase) in appetite.
3. New complaints of fatigue or insomnia.
4. Difficulty managing finances or calculating numbers.
5. A noticeable change in personal hygiene, appearance, or home maintenance.
6. Memory loss, especially short-term memory issues.
7. Depression symptoms lasting more than a few weeks.
8. A change in social habits; withdrawal from events and people they normally enjoy.
Attorney Megan L. McCann, partner at the Law Office of Davis & McCann, P. A., Dodge City, Kansas, has been appointed by the Ford County Commissioners to represent Ford County on the Southwest Kansas Area Agency on Aging sub-region council.
Southwest Kansas Area Agency on Aging (SWKAAA) is a planning, coordinating, and funding agency providing services to older Kansans in the 28 counties of southwest Kansas. Sub-region council members elect representatives to serve on the SWKAAA board of directors and act in an advisory capacity for the board.
As elder law and estate planning attorneys, Davis & McCann, P. A. provides specialized legal services in the areas of estate planning, long-term care, Medicaid (advance planning and crisis planning), and special needs planning, among others. Davis & McCann, P. A. is a member of Wealth Counsel, a national consortium of Estate Planning Attorneys. Ms. McCann is also a member of the National Academy of Elder Law Attorneys (NAELA), a professional association providing education and training for professionals in the areas of elder law and special needs planning.
In addition to long-term care planning and Medicaid planning, Davis & McCann, P. A. offers services in simple and complex estate planning, business and farm succession planning, business formation, probate, trust administration, simple and complex real estate matters and more. The firm represents clients in counties throughout the western half of Kansas.
Dementia is the term commonly used to describe a person’s decline in memory and other cognitive abilities that interferes with daily life. This decline is not a normal part of aging. Alzheimer’s, a brain disease that results in the loss of brain cells and function, is the most common cause of dementia.
How can Alzheimer’s impact your legal future? If your cognitive ability decreases below a specific threshold set by the State, you no longer will be allowed to make legal decisions for yourself. If you have not executed Powers of Attorney while still mentally competent, the State will step in and decide who will make business and medical decisions on your behalf. The State will similarly decide how your estate will be divided upon your death, if you have not previously signed a valid will or trust. Predictably, the decisions made by the State may not be the decisions you would have made for yourself.
Because Alzheimer’s is a progressive disease, it’s important to detect impairment issues as early as possible and get your business, medical and legal affairs in order. While Alzheimer’s currently has no cure, early treatment may slow memory loss and increase your chances of longer independence. Here are 10 warning signs from the National Institute on Aging indicating when a person may need a medical evaluation:
1. Difficulty remembering.
Forgetting important dates or events, repeatedly asking for the same information, and relying on family members or reminder notes to handle daily tasks are clues that cognitive changes are occurring.
2. Difficulty in planning and solving problems.
Struggling to track monthly bills, follow a familiar recipe, solve simple math problems, or taking longer than usual to complete these familiar tasks can be another indicator of problems.
One of the most common concerns of our aging clients is the fear of losing their family home if they need full time nursing care. There seems to be an inclination to transfer the family home to someone else, usually a family member, as quickly as possible to keep the home from being sold. This may sound like a smart idea, but it simply doesn’t work in most circumstances.
Losing the family home is a legitimate concern but one that you should not try to address without the assistance of an experienced elder law attorney. Here are a few of the problems you can encounter if you don’t abide by Kansas law and Medicaid rules:
1. Gift Tax Consequences. Unless the appraised value of your family home is $15,000 or less (the 2019 annual gifting allowance), when you transfer your family home to someone else, you will be required to file a gift tax return and may be subject to a gift tax.
2. Medicaid Reimbursement Claim. If you require full time nursing home care and are counting on Medicaid benefits to cover the cost of your care, transferring your residence to someone else shortly before moving to a nursing home facility will likely result in a problem. Medicaid works on the theory that assets (your family home, for example) that otherwise could be used to pay for your care should not be given away within the five year period prior to requesting the government (Medicaid) pay for nursing home benefits. This period is called the five year look-back. Unless the gift recipient fits certain, clearly specified exceptions, the government will assess a penalty period before they will contribute to your nursing home care if you have made a gift within the five year look-back. During the penalty period, you will be required to private pay for the cost of any nursing home care that you receive.
We often talk about the proverbial “crystal ball” in our office. If only we knew when our death will occur, we could wait until the last minute to get our affairs in order. Unfortunately (or maybe fortunately), very few of us receive notice that our death is imminent while we are healthy enough to take care of these things. Perhaps we receive a terminal diagnosis, but we believe we’ll “have more time” to take care of the details involved in our estate. Or, we pass away due to an unforeseen accident. The reality is we “think” about getting our estate in order but, time seems to slip away. We encourage everyone to assemble these important documents during their younger years, so when a health crisis or death occurs, there is one less stressor on the family.
Here are some helpful tips we gathered from the National Institute on Aging, as well as some of our own, that may assist you in getting your affairs in order:
1. Gather important papers and keep them in one place. Create a file and place everything in a desk or dresser drawer. Notify a trusted family member or friend where these papers are located. You also can notify your lawyer as to their location. You may wish to list the information and location of papers in a notebook. If your original papers are in a bank safe deposit box, keep copies in your home file. Check each year to see if there is anything new to add.
2. Give permission in advance for your doctor or lawyer to talk with your caregiver as needed. There may be questions about your care, a bill, or a health insurance claim. Without your consent, your caregiver may not be able to get needed information. You can give your approval in advance to Medicare, Medicaid, or your doctor. A HIPAA authorization form and/or Health Care Power of Attorney may be used to accomplish these tasks.
Elder law may not be on your radar yet. However, if you live long enough, it will be. May is designated as National Elder Law Month and is sponsored by The National Academy of Elder Law Attorneys (NAELA) specifically to draw attention to legal issues related to seniors and their families. As you or your aging parents encounter an increased need for legal and financial assistance, you will find elder law attorneys can help with a wide range of legal topics, including healthcare directives, financial powers of attorney, long-term care planning, Medicaid planning, guardianships, special needs planning, and similar matters.
You or your parents may not feel the urgency for legal guidance in any of these areas today, but with the passing of time, it will become more relevant. There is significant risk involved by waiting to develop a long-term care plan. If you wait until the point when you realize an elderly parent can no longer manage his or her money, or their health has declined so much that immediate intervention is necessary, then the pressure is suddenly on to act quickly to prevent significant losses, which often results in higher costs and more difficulty in the planning process. Rarely are optimal decisions made in high-pressure situations. Advanced planning provides you the peace of mind that in the event of something unforeseen, you have a plan in place that will immediately meet the needs of the senior. It also is especially important for adult children who live at a distance from their elderly parent and cannot respond immediately in a crisis.
What are the key questions you should ask yourself or your aging parent when considering estate planning and long-term care planning?
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