NHS - Expert Advice on Edlerly Care

The Problem With Revocable Living Trusts

miscltd@pacbell.net — Tue, 27 Jul 2010 18:28:00 GMT

More and more "investment advisers" are selling Trusts as vehicles for preventing probate, avoiding taxes and providing for estate management. Approximately 40 million baby boomers soon will require increasingly expensive medical care during a longer life expectancy than their parents. As they become ill with Cancer, Strokes, Alzheimer's Disease, Parkinson's Disease and other debilitating illnesses, that care will in many cases be delivered in a Skilled Nursing Home setting. The average stay at a nursing home can easily exceed $100,000 a year, and in some cases can last 10 or more years.

Often with proper planning for middle class families, most nursing home expenses can be paid for under the Long-Term Medi-Cal Program (the State equivalent of the Federal Medicaid program), without impoverishing the patient’s spouse and without depleting the Family Estate. Medi-Cal is not just a poverty program. Middle-class taxpayers suffering a catastrophic illness can often qualify, if they comply with applicable rules and regulations, which are complex and subject to frequent amendment.

Living Trusts can be a part of good Estate Planning for Long-Term Care. The "income and principal clause" in most of today's Trusts obligates the person administering your Trust to take whatever steps necessary to make certain you are cared for. This clause can force you or your spouse to use all Trust Assets for healthcare until the Trust is depleted. Assets held in a Revocable Trust at death are subject to an Estate Recovery. The State Director of Health Services is entitled to reimbursement for every cent of Medi-Cal benefits paid to the patient after age 55. That claim takes priority over any other Trust terms for payments to others, including spouses and children.

Under Medi-Cal regulations, typical trust assets – real property, stocks, bank or investment accounts, vehicles and income – are not exempt from Medi-Cal reimbursement claims. Those same assets, if held in a manner other than a Revocable Living Trust, could be exempted from reimbursement. California has the authority to place an estate claim against the property of a Medi-Cal recipient, including property that passes upon death to the recipient's heirs through a Revocable Living Trust . This means that Trust Assets are viewed as cash available to privately pay the cost of a Nursing Home stay.

A Living Trust is not automatically compatible with effective Estate Planning for Long-Term illness and inheritance preservation. Living Trusts can and will interfere with your ability to rely on excellent government benefits. The good news is that, with appropriate advise and competent Advisers, other options are available to preserve your Estate and ensure your loved ones' financial stability.

For additional information or to order a FREE video or DVD about planning for Long Term Care call Nursing Home Solutions (800) 773 6467.

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Tags: revocable living trusts,living trusts,trusts,medi-cal,long term care,long term care insurance,Nursing Home Solutions,medicaid,cancer,stroke,alzheimer's,parkinsons,dementia,long term nursing home care,skilled nursing home care,estate planning,trusts and wills,middle class

Paying for Nursing Home Care,

miscltd@pacbell.net — Fri, 23 Jul 2010 15:17:00 GMT

HOW TO PAY FOR NURSING HOME CARE

Over 70% of the American population will need some form of Nursing Home Care at some point during their life. The average Nursing Home stay can easily cost $7,500 per month. Add a Respirator in order to breathe and the cost could escalate to $25,000 per month. Whether a serious injury or a sudden or progressive illness, few people are prepared to handle the high cost of Nursing Home Care when a loved one is struck with a Catastrophic Illness.

Catastrophic Illnesses include Dementia, Alzheimer’s, Parkinson’s, Stroke or a broken hip and often require lengthy nursing home stays. Many families are able to provide appropriate in home care in the early stages of Dementia, Alzheimer’s and Parkinson’s diseases, however as these illnesses advance, Nursing Home Care may become necessary and is an expense that few individual or families are prepared to handle. These families discover that Medicare, private health insurance, and HMO's do not cover ongoing nursing home care.

Long-Term Care Insurance is an option to assist with the cost, however, it is often inadequate to meet the full cost of a nursing home stay. Long-Term Care insurance is generally paid on a daily basis with the benefit being $50 to $150 dollars per day for a period of time, usually not to exceed 3 to 5 years. Along with the problem of long-term care coverage not being adequate to fund the average nursing home stay of $7,500 per month, the other major issues with long-term care coverage are high premium costs and often inability to qualify due to pre-existing medical conditions.

The solution is Medi-Cal, a Middle Class Program created by the government to help families facing a Catastrophic Illness. The good news with Medi-Cal is that there is no limit to length of stay or type of care your loved one can receive from Medi-Cal in a skilled nursing home and over 80% of the Nursing Homes in California are approved for Medi-Cal.

However, many Middle Class Families mistakenly assume they are not eligible for Medi-Cal Benefits and believe that Medicare and/or their health insurance policies will pay for Skilled Nursing Home Care. Because most people do not realize that Medi-Cal is an option and do not know that its benefits are available to them, they pay privately. Private paying could result in the loss of an entire lifetime of savings. It is not necessary that an individual, in order to be eligible for Medi-Cal benefits “spend down” all of their assets, or, in the alternative, be poor or impoverished.

As with any government program, there is an application process and rules to be met. The process is not an easy one, but with the proper assistance and pre-planning, most Middle Class families can obtain long-term nursing home benefits.

For more than 30 years, NHS has helped numerous families obtain excellent Long-Term Nursing Home Care paid through government benefits (Medi-Cal) while preserving and protecting the family home and assets. NHS is considered one of the nation's leading experts on long-term illness care and federal benefits. For more information call 1-800-773-6467.

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Tags: medi-cal,medi cal,nursing home care,long term care,long term care insurance,alzheimer's,parkinson's,dementia,parkinson's disease,Nursing Home Solutions,nhs,medi cal benefits

Hospitals Avoiding the Loss of Outliers

miscltd@pacbell.net — Fri, 23 Jul 2010 15:11:00 GMT

AVOIDING THE LOSS OF OUTLIERS

What is an outlier? This term refers to a Medicare recipient who has remained in an acute care facility beyond the allotted days anticipated for a particular illness and who has charges in excess of the total DRG reimbursement. This is usually someone who is catastrophically ill, with many needs, such as ventilator respiratory support, dialysis, feeding issues, etc.
Who pays for outlier services to an acute care hospital? These services are factored in to a cost report submitted to Medicare on an annual basis. They determine what kind of a per diem rate they will pay to a hospital as an “administrative day rate”. This rate is not meant to match the charges. Quite to the contrary. It is a token rate to offset a minute portion of the expense, while you look for appropriate long-term care settings.
What kind of facility would that be? Most likely a sub-acute unit.
Who will pay them? The care in a sub-acute unit is covered by Medicare only if skilled nursing benefits are available. In other words, only if the patient has not already exhausted those benefits. Bear in mind, the Medicare skilled benefit only pays in full for the first 20 days. On day 21 the patient becomes responsible for 20% of charges.
How much is that? Depending on the care required, the monthly charges can be over $40,000.00 per month.
Why would any family agree to move a patient out of the hospital if they stand to pay that kind of money? Exactly! Families become very resistive to that move. The hospital is telling them they have to begin to make arrangements to go to the next level of care, and the payor source is telling them the bill will be astronomical in a matter of days.And the sub-acute unit tells them they need a $20,000.00 deposit. Why, indeed, would any one cooperate with such a plan?
How can NHS help the acute hospital? By providing a viable option to that resistive family. By explaining to the family that they need not loose all the ill person worked for so many years. They can protect the house, the savings and the estate, so when they recover, at least their finances are intact, if not their body. By offering this option, an acute care hospital can begin early to identify the person at risk of becoming an Outlier, and act early to intervene with the family so appropriate care can be provided at the appropriate level, and all the providers will be funded. Sub-acute facilities wont turn down a patient if they know at the time of intake the family has made arrangements for long term care Medi-cal.
Who, at the acute care hospital, would identify these potential Outliers? The CFO, the Director of Utilization /Case Management, The Admissions Supervisor/ the Financial Consultant, and certainly the Doctor taking care of the patient. As complications arise, everyone should be aware of the expected discharge requirements and plan ahead by setting up a family meeting to review all the aspects of ongoing care. Of course, the financial aspect is a huge part of the decision process. Finances should never be a reason to terminate care. And, lack of understanding options should never be reason to delay discharge to the next level of care.
Who pays NHS for their service? Normally, the family of the patient pays the fees. However, an acute care hospital loosing thousands of dollars daily, can option to pay the fees for the client, and cut their losses, so to speak.
How fast can NHS have long term Medi-cal for someone? Once all the necessary information is provided, NHS can have the case in a pending status within the same month we get the information. NHS guarantees their work.

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Tags: Hospitals,Hospital,long term care,Outliers,nursing home care,Nursing Home Solutions,medi-cal,medicare,rehabilitation,skilled nursing home care,acute hospital,nhs

Medi-Cal paid Nursing Home Care for Middle Class Families

miscltd@pacbell.net — Mon, 12 Jul 2010 06:11:00 GMT

“MEDI-CAL” THE WELFARE MYTH

Unfortunately families, with loved ones suffering from a Catastrophic Illness such as Dementia, Parkinson’s, Stroke, or Alzheimer’s and in need of Long Term Nursing Home Care, labor under the mistaken notion that Federal funds from Medi-Cal are only for low-income patients. In fact, many Nursing Home operators are equally suffering from the same mistaken beliefs. Nothing could be further from the truth.

The Private Pay Myth

Many nursing home operators prefer to simply bill the family, a process which is both familiar and relatively easy for their business office. Yet, if a patient needs extensive medical care, costs can quickly climb from a minimum of $5,000 per month to over $20,000 or more per month. Most families would find themselves hard pressed to privately pay these kind of costs for more than a few months. Often, Nursing Home operators stand by as families fall behind on their payments and as accounts payable stretch to 180 days or more.

The result is a vicious cycle for both the patient as well as the family. The family takes the loved out of the facility due to the high cost of the Nursing Home stay, the family attempts to care for the loved one at home until both the sick family member and the caregiver are exhausted and at physical risk. The last step in this vicious cycle is the inevitable ride back in an ambulance to a local Emergency Room for what is now a more serious medical problem. The result is a loose – loose scenario. Everyone loses, from the sick family member to the Nursing Home operator. The fact is that all of this could have been avoided.

Medi-Cal, A Very Different Solution:

Once a patient is approved by Medi-Cal for Long Term Nursing Home Care, Medi-Cal pays 100 cents on the dollar for patient care while in the Nursing Home. That includes either skilled or custodial care, medications, speech and physical therapy, personal items such as diapers and equipment such as specialized beds. Reimbursement continues for as long as the patient needs the care and remains in the Nursing Home. In California, the Medi-Cal daily rate (for 2010) is close to the top of the scale charged for private pay by many if not most Nursing Homes.

The Myth of Medi-Cal as a Poverty Program

Confusion over Medi-Cal also arises because it administers two major components: One for the poor and another for Long-Term Care. Admittedly, Medi-Cal for the Country’s low-income population does have its problems. But the Medi-Cal Program for Long-Term Care is well run and efficient. Oversight is much stricter, payment occurs promptly, usually within 30 days of invoices, and reimbursements are ongoing once a client is enrolled via an annual Treatment Authorization Request (TAR).

In truth, Medi-Cal is an entitlement program, just as is Medicare. Like Medicare, Medi-Cal has various rules and regulations that must be met in order to receive benefits. Still, an estimated 90% of all Skilled Nursing Homes are currently Medi-Cal approved in California.

PAYMENT OPTIONS

Indeed, when all available payment options are examined – Medicare, private-pay, Long-Term Care Insurance, etc., – Medi-Cal offers the most complete payment for patients and provides the highest consistent reimbursement rate for Nursing Home operators. Proper structuring of assets and income can enable most individuals to meet the Medi-Cal rules, qualify for benefits and preserve personal assets, even if the family has a loved one already in a Nursing Home, this can still be accomplished.

For more information on Long Term Nursing Home Care paid by Medi-Cal, you can reach Nursing Home Solutions at 800 773 6467.

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Tags: medi-cal,nursing home care,long term care,long term care insurance,dementia,parksinson's,stroke,alzheimer's disease,skilled nursing home care,medicare

Before buying Long Term Care Insurance,

miscltd@pacbell.net — Sat, 10 Jul 2010 15:31:00 GMT

Long-Term Care Insurance,

A BITTER PILL THAT CAN BE HARD TO SWALLOW

LTC insurance can protect your or your loved one in the event of a long-term illness. According to the LTC industry it can protect your assets and provide you with peace of mind. Like all insurance, long-term Care insurance was created to help with the costs of nursing home care. Typically, when insurance of any kind is sold, it is presented as a “cure-all” for every problem and need. Given that the cost of nursing home care is often touted at about $5,500 per month (a more realistic figure is about $8,500.00 per month with an annual cost at about $100,000). It is not difficult to see why so many people, especially elders, are purchasing LTC insurance at a record pace. In fact, according to the LTC industry the rush to purchase LTC policies in the last several years has more than doubled.

Long-term care insurance can be very costly and usually has a two-prong problem; it limits how much it will pay as well, as for how long it will pay for the care of a loved one. Each policy is different and it is hard to generalize, but it is safe to say that these two limitations exist in the vast majority of all long-term care policies. Assume that Long Term Care (LTC) policies are limited as to time and amount of coverage. So, if you purchase a policy, it may have a limit of twelve (12) months or, say, twenty-four (24) months of benefits. After that, you are on your own! The problem with the time caps in Long Term Care (LTC) policies is that the family member in a nursing home with dementia or Alzheimer’s may need nursing home care for up to ten (10) or more years! The result is that the policy purchased turns out to be a band-aid approach to your long-term care needs.

Secondly, a long-term care policy usually has another hidden problem. If the policy pays anything at all (and some policies have so many exclusions that they may pay very little of what is there stated benefit), payment is often limited to a monthly amount. Assume that the benefit calls for $100.00 per day or approximately $3,000.00 per month. However as we have already mentioned, nursing home care can easily run from a low of $5,000.00 per month to a high of $30,000.00 to $50,000.00 per month, depending on your medical needs and level of care. The result is that the policy can turn out to be inadequate to help the family meets its financial obligations to the nursing home. Keep in mind that the cost of nursing home care will escalate with the amount of time that a sick family member requires that care.

Before you go out and sign on the “dotted line”, have someone review the policy and tell you exactly what you can expect, or see someone like ourselves that will discuss with you other alternatives as well and provide you with answers for your long term care concerns. Again, before you spend a lot of money on something that may not live up to your expectations or the sales pitch, you should ask several questions from several different sources.

There are clauses that you should watch out for.

‘Prevailing Expensive” Feature – Instead of getting reimbursed for your actual expenses, you will get what the carrier determines is the prevailing rate for a service, which may be less than what you paid.
The dollar-per-day benefit. Coverage can range from about $50 to $300 a day. It is considered a good idea that you buy at least the cost of a nursing home stay in your local home area. The ideal policy should cover all levels of care, such as at home, in a nursing home or assisted living.
Length of coverage. Most policies cover from two to five years. The premium will reflect the length of the coverage period; the rule of thumb is the longer the period of coverage the higher the premium. Policies for Lifetime coverage will be the most costly.
Pay particular attention to the waiting period (Also known as the elimination period) before the insurance becomes obligated to start paying. The longer the waiting period, the less expensive is your premium.

The elimination period should only be required once over a lifetime. The better policies let you combine the number of home days of care with facility days as well as assisted living days.
Inflation Protection. I would suggest that you absolutely consider adding this feature if you are in fact going to spend the money on long term care coverage. To assure that your daily benefit keeps pace with inflation, a 5 percent yearly increase is strongly suggested. Remember with inflation protection that your premium increases every time there's an adjustment. Every increase is based on two factors, one a newly adjusted benefit level and the other your age at the time of the actual adjustment. Premiums often rise with age and in the long run can prove to be so costly that they are not a real solution to the long-term care issues facing the family.
Nonforfeiture" Protection. Certain policies let you decide whether to have your benefits stay in force for a set period even if you miss payments. This added feature is often considered too costly and with out real benefit for the insured. Again the best thing to do is get additional information and do your homework prior to purchasing any of these benefits.

Long term care insurance like any insurance certainly has a role to play. Unfortunately we have found that it is often difficult to obtain long term care once there are pre existing medical conditions. In fact, for that very reason (pre existing health care issues) most of these policies are sold to the younger crowd. The goal seems to attract people in their 50s to purchase the insurance. Now if it works the way the industry sees it, you will purchase this policy from age 50 through your retirement at 65. Remember that you are making your greatest income during this time period. Also remember that the policy for a couple can easily cost $8,000 per year. At age 65, upon retirement, you and your wife will find that you are now on a fixed income and no longer have the extra funds. In any event, after ten or more years of caring this policy you may find that it is too expensive and you are unable to continue with it. That is exactly what the industry is banking on. How often this happens I cannot say, but that it does happen is well established.

NHS can be reached at (800) 773-6467 for further information.

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Tags: ltc,long term care insurance,long term care,nursing home care,insurance

Preparing for a Health Care Crisis

miscltd@pacbell.net — Thu, 08 Jul 2010 16:04:00 GMT

Q: Steps that families need to take to care for their elders?

A: While it is always best to seek competent advice from an experienced professional, there are some simple things that you can do in preparing to care for ill loved ones. Families face an overwhelming amount of confusing information, emotional issues and decisions ranging from Nursing Home Care to protecting one's life assets. Therefore, it is important to have systems in place so the appropriate decisions are made at the appropriate time. All families should have documents in place that allow healthy members to step up, in the event of an illness. These documents include Durable Powers of Attorney, which authorize another person to handle financial affairs if they are unable to act themselves, as well as Medical Directives, which name someone to make healthcare decisions should they become incapacitated. These directives are easy to draw up and should be notarized.

Property should be held at minimum in Joint Tenancy so, in the event of an unexpected death, the property would pass to the survivor without Probate or other complications. Bank accounts and other items should be jointly held for the same reasons. Lastly, everyone should have a Will or Trust. These documents give insight to the elder's intentions regarding assets, without relying on the interpretation of the heirs.

Q: What type of planning should be done before Retirement?

A: There are exceptions to every rule, but here are the basics to consider when planning for retirement.

Downsize your lifestyle as retirement approaches. This may be a bitter pill but one that is critical to follow.
If the family home has a lot of equity it could be viewed as a savings account. When and if necessary, a refinance or a sale might be an appropriate way to go. However, the sale of the family home may trigger capital gains issues and expert advice from a proven Financial Advisor in this arena is vital. Reverse Mortgages are an option as well but prove to be seldom advisable and require strict scrutiny before entering into such a contract.
Determine what your Social Security benefits will be so you can start incorporating that income information into your planning. Evaluate your assets along with the Social Security benefits to determine what your monthly income will be as well as what income is necessary to sustain the family. Many people have no idea what their pension will be until they get their first Social Security check. Planning should start much earlier.
Self-fund your IRAs or other retirement programs to the maximum and save as much money as possible. These are tax-free dollars that can't be ignored. Look at matching tax or retirement programs your employer may offer. Again, early planning pays off.
Review investment portfolios on a regular basis with your adviser. Make sure that your risk tolerance is set out clearly. Often families never look at the portfolio once the investments were made.

If you have questions about your own retirement and health care concerns, e-mail them to me at info@nhscare.com and your questions will be answered in one of my upcoming columns.

For more information call toll-free (800) 773-6467.

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Tags: nursing home care,long term care,reverse mortgage,medi-cal,medi cal,durable power of attorney,joint tenancy,retirement

Critical Estate Planning Tools

miscltd@pacbell.net — Fri, 02 Jul 2010 15:57:00 GMT

A major illness or accident is more than just a health problem for the elderly. Financial assets can be devastated, and families thrown into havoc when a person is rendered incompetent or incapable of executing financial and medical decisions. A simple way to avoid the cost and crisis of such a situation is by planning ahead with “advance directives,” and assigning Durable Power of Attorney to someone that can be trusted.

Advance directives are as varied as the individual’s situation, and can address all aspects of financial and health care needs. However, the Durable Power of Attorney is critical. The phrase “power of attorney” designates the holder as the “agent” for the giver of that power. Agents have the authority to bind their principals by signing contracts, writing checks, and many other things that the principal could have done for before becoming incapacitated. However, holding a power of attorney does not authorize someone to act as an attorney for that person.

Why Durable?

With an ordinary power of attorney, authority expires when a person becomes incompetent (or dies). The theory is that if the principal couldn’t do it himself, his agent ought not to be able to do it. This makes sense in ordinary commercial situations, but not in relation to the elderly. In some cases, the principal will be comfortable with the agent being responsible for any and all financial as well as health care issues in the event of illness and incapacitation. In that situation, the principal has assigned a financial power of attorney to deal with issues related to banking, finances and other assets as well as a health care power of attorney, which allows for making health decisions.

When is it used?

The power of attorney is used for situations when the principal can’t be present, but trusts an agent to do the job for them. So, they authorize the agent ahead of time to act in their place. This is a device for convenience. Without this device, an elderly person, who legally cannot have anyone act for them, yet suffers from something debilitating such as dementia, can only hope to find a conservator. Unfortunately, conservatorship is a lengthy and expensive court procedure requiring a volunteer to be the conservator.

Hoping for a volunteer to conveniently appear as a conservator isn’t prudent or reasonable. In addition, will there be enough time and money available for the volunteer to acquaint themselves with the demands of the situation before disaster strikes? And what about the legal formalities and court approvals?

Enter the Durable Power of Attorney, wherein conservatorship is not required, and costly legal fees are avoided. Someone can act for the incompetent without first going to court, if, when the incompetent was competent, he thought ahead to sign such a power. And importantly, it endures although the principal is incompetent.

Such conveniences make the Durable Power of Attorney a common estate-planning device. Responsible children choose to have such a power to handle the affairs of their parent(s), and married couples plan ahead by providing a power for each other.

Power balanced with responsibility

Powers of attorney are usually drafted to be extremely broad. They typically read as if the holder has the authority to do almost anything. However, the law has a silent sentinel called “fiduciary duties.” It prohibits taking advantage of the position and being self-serving. Thus, regardless of the apparent broad language of the durable power of attorney, one cannot convey things (money, property, etc.,) to themselves, or anyone else, as a gift, unless that power is included.

Durable Power of Attorney for health care decisions

A separate code section in the law provides for appointing an agent to make health care decisions for the incompetent. These powers are durable in the same sense as the durable financial powers--they continue beyond incompetence. Indeed, they are almost exclusively used for situations where the patient cannot decide or determine their best course.

In California, on July of 2001, the Uniform Health Care Decisions Act went into effect, which codified the Advance Health Care Directive (CA Probate Code Section 4701). In simple layman’s terms, this allows a person to select someone or to directly instruct a physician or health care provider to carry out their wishes regarding the type and extent of care to be given when he or she cannot make decisions or communicate them.

An agent acts for the principal. The principal can chose a primary agent and an alternate agent to act if the primary agent is not available or willing to make health care decisions. An expiration date can also be specified.

Health care instructions can define what type of care the signer wants as well as the choice to limit care. These types of decisions include:

· Limiting nutrition and hydration even though it may result in death

· Prolonging life

· Life sustaining treatment

· Organ donation

Requirements for an advance health care directive to be valid and binding include:

· It must be signed and dated by the patient him/herself, or at his/her direction.

· And either witnessed by two adults or notarized.

· Notarization is preferred

Executing a subsequent document may revoke advance health directives. It is very important that copies of the signed and witnessed or notarized health directive are provided to the treating physician or health provider, at the time the patient is in need of medical care. Treating physicians or health care providers should have copies on file when feasible. The person chosen as the agent should be aware of the principal’s wishes and have a copy of the Health Power of Attorney to provide on behalf of the incapacitated person. New Advance Health Care Directive Kits include a wallet ID with the health care directive.

Nursing Home Solutions can be reached (800) 773-6467 for further information.

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Tags: estate planning,power of attorney,will,trust,wills and trusts

The Immediate Impact of the Affordable Care Act on Seniors

miscltd@pacbell.net — Sun, 27 Jun 2010 17:31:00 GMT

The Immediate Impact of the Affordable Care Act on Seniors

In theory there should be more accountability over the medical care that you receive. Your interaction with your health care provider should be far simpler.

The following is a very generalized out line of some of the more important changes that will effect you:

Medicare Benefits, either through Medicare or Medicare Advantage should remain the same. Medicare Advantage will be phased out over time.

Lifetime limits will no longer be set by the Insurance companies on the amount of care that you can receive.

Pre-existing conditions can no longer be used to deny coverage for children as of September of 2010.

Pre-existing conditions will no longer be available to deny coverage for adults starting with 2014.

Prescription drugs should become more affordable.

Phased over time preventative care including an annual physical as well as screening for a variety of illnesses.

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Tags: nursing home care,long term care,affordable care act,seniors,medicare

Trusts, Nursing Home Care & Medi-Cal

miscltd@pacbell.net — Tue, 22 Jun 2010 06:53:00 GMT

Living Trusts can Jeopardize Nursing Home Care

More and more these days “investment advisers” -- who may or may not be practicing law without a license -- are selling Trusts as vehicles for preventing probate delays and expenses, avoiding taxes and providing for estate management. Yet many of those marketing Trusts either do not recognize, or intentionally avoid discussing, a serious problem inherent in using Trusts in the context of an aging population: Trusts are a useful estate-planning tool but can have dire consequences when it comes to Long Term Nursing Home Care.

It is commonly believed that Trusts were created during the Middle Ages in England, and may have been around as early as the Roman Empire. Trusts were part of the Courts of Chancery of the 15^th Century, although there are writings that include the concept as early as the 11^th century. Historians and legal scholars have noted that Plato used a trust during the golden days of Greece.

Life during the Middle Ages was short and often brutal. The average life expectancy was about 35 years, and the average citizen had little to look forward to that did not in some way include some form of illness such as the plague or any of a variety of opportunistic diseases that roamed the land. Most people were likely to die quickly from disease, famine or warfare, and no one anticipated the need for long-term care. When medical care was available, it was relegated to a bare minimum, and the cure was as likely to cause death as the scourge the patient was trying to fend off.

In that lovely setting, trusts were used primarily to deal with taxes and debts that arose out of the feudal system. Trusts were often used as a creditor’s tool, making certain that the powers that be were protected and that all debts on the land were paid. Some scholars have argued that Trusts were used in an attempt to avoid debt and taxes to the feudal lords.

Modern-day Trusts are generally considered useful tools to avoid probate and taxes, or to manage the estate of an incompetent Trustor, amongst other goals. As a result, lawyers, paralegals, accountants, insurance agents, and other so-called investment advisers indiscriminately promote Trusts to large audiences as the estate-planning vehicle of choice without inquiring into or perhaps even recognizing the serious economic hardships that can arise for the Trustor and his or her family if the Trustor should suffer a serious illness and spend even a small amount of time in a Long-Term Care facility. Many of those same advisers fail to ask if illness is a real or potential risk for the settler or a spouse.

Approximately 40 million aging baby boomers soon will be receiving increasingly expensive medical care during a longer life expectancy than their ancestors. As they become ill with Cancer, Strokes, Alzheimer’s Disease, Parkinson’s Disease, Dementia and other debilitating illnesses, much of that care will be delivered in a Skilled Nursing Home setting. Nursing Home Care is a serious and expensive issue. The average stay at a Nursing Home can easily eat up $60,000 to $100,000 a year, and in some cases the Nursing Home stay can last up to 10 or more years.

With proper planning, much of the Nursing Home expenses can be paid for under the California Long-Term Medi-Cal program (the state equivalent of the federal Medicaid program), without impoverishing the patient’s spouse and without depleting the family estate. And here is where Trusts and traditional estate planning begin to clash with the need for affordable Skilled Nursing Home Care.

The “income and principal clause” in most of today’s Trusts obligates the Trustor or Trustee to take whatever steps are necessary to make certain that the Settlor is cared for. This clause can force a patient to use all Trust Assets unnecessarily to pay for healthcare until such time as the Trust is depleted. Assets held in a Revocable Trust at death are subject to an estate claim. The State Director of Health Services is entitled to reimbursement for Medi-Cal benefits paid to the patient after age 55. That Health Services claim takes priority over any other Trust terms for payments to beneficiaries, including spouses.

Advisors who advise families to consolidate resources into a Living Trust when long-term medical care is on the horizon should be particularly concerned. In addition to making qualification for long-term Medi-Cal more difficult, the Trust becomes a convenient source for reimbursement to Medi-Cal after the Trustor’s death. The “Remaindermen” later may well question the competence of the professional who advised the use of a Trust when the Trustor was already known to be suffering a serious illness and facing the need for long term Nursing Home Care that was not taken into consideration. Or, that there were other legitimate vehicles available that would have resulted in qualifying for Medi-Cal and completely avoiding later, a possibly devastating, Medi-Cal reimbursement claim.

As the Medi-Cal planning options become better known, their application in the estate-planning area will undoubtedly be considered the standard of care for professional estate planners. A failure to consider them, and a blind recommendation to use Living Trusts, could expose such planners to malpractice claims in the future, particularly when the Medi-Cal reimbursement claims start coming in.

Why is Medi-Cal even an issue here? Because as many people including lawyers are frequently unaware, the impoverished are not the only ones entitled to receive Medi-Cal. It is this misunderstanding of the Medi-Cal system that muddies today’s estate-planning issues. The truth is, Medi-Cal is not merely a poverty program. It is available to all long-term Nursing Home placements, as long as they comply with the applicable rules and regulations, which are complex and subject to frequent amendment.

Government officials, who feel the need to tightly control the shrinking pool of so-called government aid, argue that those with assets should use them to pay for their medical care instead of preserving an estate for heirs. But for those that understand the Medi-Cal system, that argument is without merit.

Take, for example, Social Security. Those who work the correct number of quarters and pay in to the system are entitled to Social Security upon retirement, no matter the amount of wealth they have accumulated. The Internal Revenue Service functions in a similar manner. Taxpayers earn money on which they pay taxes, but reimbursement is not automatic if the worker overpays. Taxpayers must do something affirmative – file tax returns – to make sure they receive what they are entitled to.

Medi-Cal is an entitlement. Those who know how to work within the system often can qualify for the benefit.

Estate planners who operate without knowledge or in complete disregard of the interplay between Federal or State Benefits and Living Trusts not only could block a critical source of revenue should their clients require Long-Term Nursing Home Care, but they also put at risk the very assets the family has put in Trust should the benefit be utilized. They have created a “lose-lose” situation.

Since Oct. 1, 1993, California has had the authority to place an Estate Claim against the property of a Medi-Cal beneficiary, including property that passes from the decedent to his or her heirs by way of a revocable living trust. This means that the value of those assets is viewed as cash available to privately pay the cost of a nursing home stay.

A Living Trust is not automatically compatible with effective estate planning for long-term illness and inheritance preservation. Living Trusts that are created without understanding and planning for Medi-Cal can and will interfere with a patient’s ability to rely on excellent, available government benefits. The Trust that a well-meaning lawyer created without considering illness could cause the client to lose the Trust Assets because of its very creation. (Although there are irrevocable trusts that can protect a home, they too have serious downsides that have become a topic of argument within the estate-planning community. Professionals have yet to reach a consensus about how well these trusts protect assets in a long-term-care situation.)

Investment advisers who target retirees as clients for estate planning involving Living Trusts without fully disclosing the implications for long-term-care payment are jeopardizing their clients’ financial security. The proliferation of “Living Trust seminars” currently popular are becoming the scourge of the estate-planning industry and something the legal profession should quickly join forces to end.

For further information on Trusts and Long Term Nursing Home Care contact Nursing Home Solutions at 800 773 6467.

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Tags: trusts,trusts and wills,long term care,medi-cal,nursing home care,long term care insurance,probate,asset protection,qualify for medi-cal

Baby Boomers & the Health Care Bill

miscltd@pacbell.net — Thu, 20 May 2010 16:51:00 GMT

WITH A LOOMING HEALTH CARE CRISIS, WHAT’S A BOOMER TO DO OR NOT TO DO

“TO DO LIST”

After World War II, we along with the rest of the world entered a time of economic growth, scientific advancement, industrial revolutions and we welcomed a new and large population of our most important product. Babies!! And more babies! The war was over, and good had vanquished evil. Soldiers, heroes were returning home to a nation and a world that sorely missed them. The result was what is now referred to as the “baby boom” or the “boomer generation”. As a result, 50 years later, Americans as well as the rest of the world will witness a societal transformation of unprecedented size and scope. Most of them (the Boomers) will reach 65 as early as 2011. How does this generation prepare for what is already occurring? They are growing older. How do they face and prepare for this time? What challenges will be the most daunting and significant? Probably none more critical then health care. There is no question more disturbing then how do we deal with our elderly. The news flash is that the boomers are our (new) elderly. Thanks to medical science we live longer. Much longer! While that is a good thing it brings with it other and more troubling problems.

How do they (we) prepare for this time? What choices can we make now that can make this journey smoother? Hopefully, you have “something” set aside for retirement. Probably whatever that amount is it will be insufficient for a trouble free retirement, but every little bit helps. There are government programs that have been put in place as a safety net, but they are being eroded on a yearly basis.

So, what can you and should you be doing. As simple and ridiculous as it may sound, The first line of defense is to stay as healthy as possible for as long as possible. Good nutrition, exercise, and going to the doctor before a problem becomes serious will go a long way toward keeping you as healthy as possible for as long as possible. Obviously, personal choices such as smoking, drinking and over-eating play a role in your future.

Regardless of how careful you are accidents and chronic illness requiring some sort of long-term care will occur and can devastate even the most prudent retirement budget. According to the American Health Care Association, two out of every five Americans will need nursing home care at some point in their lives; other studies place the percentage far higher. The current average cost of $190 per day, can and will devastate any family on a sustained basis. This figure will only rise on a yearly basis. Moreover, most long-term care is not covered by Medicare or private supplementary insurance. Medi-Cal long-term care programs are in place and should remain in place, but are under attack on a daily basis by the long-term care insurance industry.

Now that we have identified the problem, let’s talk about some solutions, other then taking care of yourself and your family.

What you should do!

Obviously, you need good health insurance so that when you get sick you have access to the best possible care. The most common alternative is Medicare, with supplemental private insurance to cover the expenses not covered by Medicare. Recently the New Health Care Bill was passed and is touted as the new panacea for our senior citizens. You need to be an informed and vocal consumer. Can you have any in-put in your health care plan? You can! Become informed. Talk with physicians and other health care professionals. They like all of us speak in their own lexicon. If you do not understand what they are prescribing or suggesting, do not leave until you understand their recommendation. You are entitled to a second opinion.
You need to be the watch dog of your own medical bills. Check your bills for overcharges or incorrectly denied payments. Insurance companies are notorious for both double billing and automatic denials. If the

Explanation doesn't make sense, keep asking, and appeal if you must.

You need to be prudent. You'll want to make sure you've set aside sufficient funds for unexpected costs. While in the world of the “boomers” or “sandwich generation”, this is not as easy as it sounds, it is still very important to have a buffer for at least a few months to avoid a disaster. If you have some liquid cash on hand you will not face liquidating accounts that will incur penalties.

You need to check on a yearly basis on your insurance coverage. Check all of your insurance coverage. What you needed at 30 years of age may be very different than what you need at 65 or above. Life insurance which was so important to protect a growing family, may not be as important as increasing your home insurance. If you purchased your home 30 to 40 years ago, it is probably far more valuable now. What is the replacement value? Insure for that amount!

· Prepare for incapacity!

Prepare both Financial and health Powers of attorney. None of us want to consider the possibility that one day we will not be able to speak for ourselves or make our own decisions. Unfortunately, it will most likely occur in half of our newly emerging elderly population. Take the time to have Health and financial powers of attorney prepared now, while you are competent. The power of attorney is used for situations where the principal (You) can’t be present but trusts his agent (that’s whoever you choose and trust to act on your behalf) to do the job for you. So, you authorize your agent ahead of time to act in your place. Be sure to have a Durable Power of Attorney for Health Care and Finance prepared. This endures although the principal is incompetent. Powers of attorney are very important when it comes to the elderly. If you do not have powers of attorney in place and you do become ill and unable to take care of your own matters the questions is who legally can act for you? The answer is not a good one. Without a proper power of attorney the only remedy may very well be a conservatorship. But conservatorship is a lengthy, expensive, court procedure. Make your choices while you are able.

For further information, Nursing Home Solutions care be reached at 800 773 6467.

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Tags: senior citizens,baby boomers,health care bill,health care,long term care,nursing home care,medicare,medi-cal,dementia,long term care,asset protection