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In my blog post last week I talked about a scenario we are seeing with increasing frequency.  We have had a number of what we call crisis calls relating to a family member who has experienced a sudden onset of injury or illness causing the need for long term care - at a younger age than you would typically think of as needing long term care.  This might be because of a stroke, a brain aneurysm or a traumatic brain injury from a car accident. Decisions need to be made concerning health care.  Without a health care directive, this immediately becomes problematic - especially if the patient is single.  If married, hospitals will often take direction from a spouse - at least temporarily in emergencies, but eventually a legal document authorizing that person to make decisions is needed.  In the case of an unmarried patient, there may be multiple family members willing or insisting on making decisions.  But without a signed document by the patient, these individuals legally can’t act. Very quickly in a crisis, financial decisions need to be made as well about how to pay for care and what accounts need to be accessed to pay the bills.  A power of attorney needs to be in place.  If

Most of the crisis long term care stories I tell here in this blog are of people in their 60’s, 70’s, 80’s and older.  They have not planned for the cost of long term care and are then beset with sudden illness or injury.  The reality, however, is that there is no age “floor” below which these scenarios do not happen. In recent years, I have seen both professionally and personally numerous long term care crisis cases experienced by people in their 30’s and 40’s.  In some ways, these cases are more problematic than for older clients.  That’s in part because younger clients have accumulated fewer savings, have families with spouses and young children to support and typically have no documents in place that even begin to lay out a plan for who can step in to help them until they can be independent again. Here is how such a crisis might occur.  A 40 something year old has a sudden stroke or brain aneurysm.  The after effects are such that the person is in a coma or is debilitated such that he or she cannot perform the activities of daily living (ie. transferring, bathing, dressing, toileting, feeding) without assistance.  Recovery is a long slow process.  The patient has no

In my post last week, I told you about a son who called.  His mom had been paying for care for almost 2 years at an assisted living facility (ALF).  Thinking he was ready to apply for Medicaid benefits, he called our office for help.  His mom, however, still owned real estate worth approximately $1.5M.  So why did he think she was ready for Medicaid? He explained to me that 2 years earlier, his brother had been handling his mother’s care and finances and arranged for her move to the ALF.  When his brother said that they needed to pay for 2 years and then Mom could qualify for Medicaid, he didn’t question it.  He also didn’t look at the admissions agreement that his brother signed on his mom’s behalf. The mistake he made was actually a quite common one.  The facility’s policy - as is the case with a majority of ALFs - is that a resident must pay for the cost of care at the private pay rate (much higher than the Medicaid rate) for a minimum of 2 years before the facility will make a Medicaid slot available to her.  People wrongly interpret that to mean “if we pay for 2 years then we will get Medicaid. This

In this week’s post I will tell you about a call we received recently, similar to ones we have had many times over the years - although not in some time.  Son called stating that Mom was close to completing a 2 year private pay requirement at a local assisted living facility.   He said he needed help applying for Medicaid. As I have written about the past few weeks, you never want to wait until you are almost completely spent down to prepare for Medicaid because it leaves no margin for error.  I thought that was going to be concern here.  But then he told me that his mom still had assets.  She had several real estate properties to her name totaling well in excess of $1.5 million.  What she didn’t have much more of was liquid assets to pay for the cost of care.   So why did he think she could qualify for Medicaid?  I’ll tell you more next week.

The Medicaid Spend Down Scramble - Part 2 In my blog post last week, I wrote about the rushed process of spending down assets to achieve Medicaid eligibility for one spouse without severely impoverishing the other non-Medicaid “community spouse”.  While maximizing what that spouse can keep - what is known as exempt assets” - is one consideration, there is an equally important second consideration - avoiding a Medicaid penalty. That’s because any Medicaid penalty - determined by calculating transfers for less than fair value during the 5 year look back period leading up to the Medicaid application - is only assessed once the application has been filed and all other Medicaid requirements have been met.  This means that even if we are able to maximize what the community spouse can keep as exempt or non-countable assets, a lengthy penalty will necessitate  using those same funds to cover the cost of care during the time frame of the penalty.    In the end, it may leave the community spouse with next to nothing should the penalty be of any length and the cost of long term care at the private pay rate - which is much greater than the Medicaid rate - be $15,000 per month or

The Medicaid Spend Down Scramble - Part 3 In my blog post for this week, I finish the topic of the spend down process before Medicaid and why it is so important to the financial well being of the healthy non-Medicaid spouse.   As I explained last week, maximizing what that spouse, known as the Community Spouse, can keep is really half of the equation.  Avoiding penalties, however, is the other half. That’s because a penalty means an additional period of time the Communtiy Spouse must pay for the ill spouse’s care.  That time period begins only after the Medicaid application is filed, all documentation has been provided in the course of the application process and the application has been approved with the penalty as determined by Medicaid.  Of course, that means the Community Spouse must pay for the care out of the assets he or she keeps as part of the Community Spouse Resource Allowance (CSRA). So, if the health spouse keeps 1/2 of the assets but only up to a maximum of $154,140 but then has to pay for care for another 2 or 6 or 12 months or longer - the exact time frame being dependent on the length of the penalty period - that