Medicaid Frequently Asked Questions

Do I have to “spend down” the money on medical care?

No. This is perhaps one of the most often given pieces of false information. You are allowed to spend your money on reasonable personal items, home improvements, a new car, buy a house, purchase irrevocable final arrangements, and small life insurance policies.

What are the limits on purchasing personal items for Medicaid spend down?

Keep it reasonable. There is a case on the books from the east coast on purchasing a $75,000 diamond ring. That purchase was ruled as an unreasonable and perhaps fraudulent purchase of jewelry. This doesn’t mean that you can’t purchase jewelry, but keep it in the “reasonable” range. This doesn’t necessarily mean you have to buy costume jewelry.

A middle of the road funeral in this area of Arkansas will run about $9,000 pre-paid, for everything including the service, liner, opening and closing, flowers, escort, etc.

What is the limit on how much cash I can have to qualify for Medicaid?

As of August of 2015, the upper limit appears to be $119,220. But, Arkansas is a keep one-half state. For example, if Mr. and Mrs. Medicaid have $120,000, the spouse at home gets to keep $60,000 and the spouse in the home gets to keep $2,000. Then they would have to spend down $58,000.

How much cash can the spouse in the institution have to qualify for Medicaid?

This one has been firm for many years. The spouse in the institution can have $2,000. This number is the original figure and has never been adjusted for inflation.

How far back does Medicaid examine my finances?

5 years. Any gifts made in that 5 years will count against you in what is called a penalty period.

How do I know how long the penalty period is?

In Arkansas, divide the total amount of the gifts by $5,168 (as of August of 2015). That gives you months and days of the penalty period.

In Arkansas, can I get rid of the Medicaid penalty period by leaving the institution?

No. The regulation is clear that leaving and coming back does not stop the penalty period.

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How to Choose an Estate Planning Attorney

This is often stated in different ways, such as

• How to find a lawyer for a will
• How to find a lawyer for wills and estates
• How to find an estate attorney
• How to select an estate planning attorney

Here are some tips:

1. Find an attorney that practices in estate planning.  They keep up with all of the changes in the laws that can affect your estate plan.
2. Preferably, find one that is versed in elder law and Medicaid as well.  There are certain things done in an estate plan that may affect your eligibility for Medicaid if you should ever need it.
3. Find somebody you are comfortable with.  Shop around for an attorney if you need to.  But, be honest with the attorney and tell him you are shopping up front.
4. Find somebody whose fee you are comfortable with.  Fees may vary somewhat within the local attorney community.  But you can expect to pay slightly higher fees to a lawyer that practices in the area or who also adds in elder law to their portfolio.
5. All attorneys are expected to have a minimum level of competence.  But, when I took the Bar exam, estate planning was not a tested subject.  The related subject of Real Estate (Real Property) Law was tested, but not elder law or estate planning law.

Choosing an attorney is based on a trust relationship.  If you don’t feel that you can trust an attorney, then feel free to find another one.  Everything that is done is based on that level of trust and confidence in the lawyer and the lawyer’s abilities.

 

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Advantages of a Trust in Estate Planning

Trusts, both revocable and irrevocable, have many advantages in estate planning, but they also have some downfalls.

Advantages:

1. Trusts make funds and property available almost immediately to family members
2. A revocable or irrevocable trust can pay off your final expenses
3. They can pay off your creditors
4. They can create “sub-trusts” to hold money for specific purposes
5. A trust can delay the distribution of money until children reach a more mature age
6. Trusts help keep your family business private by keeping your estate out of the public process of probate
7. Special kinds of trusts (Irrevocable Life Insurance Trust – ILIT) can keep you under estate tax limits if you carry a lot of insurance

Disadvantages:

1. For Medicaid, if your home is in a revocable trust, or in a irrevocable trust for less than 5 years, the house becomes an asset that Medicaid will count against your $2,000 limit
   • The trustee actually owns title to the home
   • Even if the trustee is you, it is not considered your property, but trust property
2. With an irrevocable trust, you cannot get the property out in case of emergency.  With specially setup trusts(Intentionally Defective Grantor Trust – IDGT), you can swap property in and out, but cannot reduce the monetary value of the trust.

I hope this helped you out.  If you have any questions or want an appointment to discuss this more, contact the DeWitt Law Firm.

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What is Elder Law?

I’m often asked what elder law is.  So here is a little more information.

One of the better articles I’ve read is located here at Wikipedia.

Elder law consists of 3 major areas:

1. Medicaid and Medicaid planning issues
2. Estate planning and administration
3. Guardianships

Very related to Elder Law are Elder Rights.  These are the rights of the elderly, who are not a Constitutionally protected class.

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Medical Estate Planning and Records

In this day of electronic records, it is still a good idea to track what medicines you take currently, and have taken in the past as part of your medical estate planning.

It is actually a simple task to create a spreadsheet in Google or Excel to track your medicines, how much, when, and who prescribed it.

Here is a sample of my tracking spreadsheet.  Notice that it has the medicine, how it is taken, the dose and units of dose, when, who ordered it, their speciality, the time of day and reason it is being taken.

Medicine	Route	Dose	Unit	Timing	From	To	Ordering Physician	Specialty	Timing	Reason
Oxygen	canula	2	liters	sleeping			Fomin, Dimitry	Neurology/Sleep	PM	sleep apnea
CPAP	nasal	6 to 10	cm H20	sleeping			Fomin, Dimitry	Neurology/Sleep	PM	sleep apnea
Tramadol	PO	50	mg	1 or 2 PRN			James Blankenship	Neurosurgeon	PRN	pain

Also, I have a separate worksheet in Excel that has the medicines I have taken in the past so I have a history.

Then, you should create another spreadsheet that has your procedures in it with as so:

Procedure	When	Who	Where	Why
Remove transverse process from T1	5/15/1985	Dr. Carry Couch	Stillwater, OK	Alluvial fracture of spinous process of T1
Rhinoplasty	12/20/1997	Dr. Fincher	Fayetteville, AR	Deviated septum. Left side of nose unusable

Now, when you go to see a new doctor, you don’t have to take all those bottles or try to remember everything.  Just print out the spreadsheets and voila, you are ready.

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No Kids? You Still Need an Estate Plan

For people without children, a will is important for ensuring your wishes are fulfilled. As the adage goes, you can’t take it with you. Whether you want to spend your last dime or leave it all behind when you go, creating a comprehensive plan for your estate begins earlier than you might think. If you don’t have children or obvious heirs, documenting your wishes and making them accessible will help ensure those wishes are fulfilled should something happen to you. “If today were your last day on earth, who would get your stuff?” says Jean-Luc Bourdon, a certified public accountant in Santa Barbara, California, and a member of American Institute of Certified Public Accountants’ personal financial planning executive committee. It’s a question he poses to all of his clients, especially those without kids . While parents may think their children are the answer, Bourdon says people without children need to plan more carefully. “When it comes to what you’ll leave behind, there are only three buckets: Uncle Sam, charity or individuals,” he says. “Generally speaking, Uncle Sam is the least appealing.” Many people with children create a will to ensure their children are cared for, and in the absence of a will, next of kin are the obvious heirs. But for people without children, a will can be just as important, and it can easily be overlooked. “It’s important to check all the estate planning documents,” Bourdon says. “Having a family creates more of an urgency in making sure […]

Click here to view original web page at money.usnews.com

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Wills

Who should have a will?

Anybody and everybody.

What is a Last Will and Testament?

A will is instructions on how to pay the final expenses, who should take care of wrapping everything up, and who gets your stuff.

A Last Will and Testament is only one of the many estate documents of a complete estate plan. If you die without a will or trust, you are said to have died “intestate.” The state will determine who gets what in that case. You really want to put your plan in place of the default state plan.

When should I have a will drafted?

If a will is what you want, then immediately.

When should I have a will updated?

Anytime you have a major life change such as the birth or adoption of a child, buying or selling real estate, major inheritances, etc.

Why have a will?

Answer these 3 questions and you will have a good idea of what your estate plan needs to be:

1. Who should get my stuff?
2. How much should each person get?
3. When should they get it?

Making a will, even a “simple will” is better than nothing in making your wishes known.  At the very minimum everybody should create a will.  Creating a will is not the hard task you may think it is if you keep the 3 questions in mind.  However, writing your own will is not suggested as legal wills are complex legal documents in the area of estate law.

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