Today’s Q&A on ElderCareMatters.com is about providing long term care services for parents

Question:  I wish to provide my parents with caregiving services.  May I charge for the long term care services that I provide, and will these services be tax deductible for my parents?

Answer:  Like so many things in the tax code, the answer is: It depends.

Qualified long term care services normally qualify as medical expenses that are eligible to be deducted as itemized deductions on a taxpayer’s individual income tax return to the extent they exceed insurance reimbursements or any other reimbursement. This is trickier than it first appears because VA disability pension, which some chronically ill taxpayers receive, is a payment of unreimbursed medical expenses and only personal care expenses in excess of the VA disability pension received are, therefore, deductible.

The Internal Revenue Code defines “qualified long-term care services” to include personal care services, which are required by a chronically ill individual AND are provided pursuant to a plan of care prescribed by a licensed health care practitioner. A chronically ill individual is one that has been certified by a licensed health care practitioner to either be unable  to perform at least two of the activities of daily living OR requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.

Finally, the Internal Revenue Code prescribes one more requirement for care providers that are related to the chronically ill taxpayer. For payments made to a spouse or relative of the  chronically ill individual, the payments are only deductible if the caregiver is a licensed professional (i.e. doctor, registered professional nurse, or licensed social worker). Relatives that must meet this additional requirement are:

Descendants (including Sons and daughters-in-law)
Sibling (including step-siblings and Brothers and sisters-in-law)
Ancestors  (including Fathers and mothers-in-law)
Nieces  and nephews
Aunts  and uncles

Although the list is quite comprehensive, notice that some relatives are omitted,  such as:

Cousins
Grandsons-in-law and Granddaughters-in-law
Children of nieces and nephews
Aunts-in-law and Uncles-in-law

To find additional help with this and other elder care matters, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Stephen J. Bailey, Esq.
Birmingham, Alabama
An ElderCare Matters Partner

 


Today’s Q&A on ElderCareMatters.com is about Applying for Medicaid Benefits

Question:  How would we go about applying for Medicaid benefits?

Answer:  Medicaid benefits are going to be different in every state.  The first thing you need to determine is what benefits you seek.  For instance, in Pennsylvania, if you are seeking benefits for home and community based services, you will start with the local area agency on aging.  If you are seeking benefits for nursing services provided in a nursing home, you would file the application at the County Assistance Office.  In any event, you can get this information from your local Area Agency on Aging or an experienced Elder Law attorney.

To find Elder Law Attorneys near you, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Robert M. Slutsky, Esq.
Plymouth Meeting, Pennsylvania
An ElderCare Matters Partner


Today’s Q&A on ElderCareMatters.com is about Medicaid Countable Resources

Question:   Are company pensions and annuities considered a “countable resource” when applying for Medicaid nursing home care?

Answer:   Yes, all monthly income is included as a “countable resource” when applying for Medicaid.  That means social security, annuity payments (regular annuities or private annuities, pension payments (civil or military service or private), rents, royalties, dividends, interest, etc. are just some of the types of income that are included as “countable resources” by Medicaid.

To find additional help with your elder care matters (including finding Elder Care Professionals near you), go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
I. Michael Tucker, Esq.
Altamonte Springs, Florida
An ElderCare Matters Partner

 


May Someone With Dementia Sign a Will?

Answer:   Millions of people are affected by dementia, and unfortunately many of them do not have all their estate planning affairs in order before the symptoms start. If you or a loved one has dementia, it may not be too late to sign a last will and testament or other documents, but certain criteria must be met to ensure that the signer is mentally competent.

Many family members or friends discourage those with dementia from seeking legal advice because they feel that the person is not capable of doing planning or executing documents. In many instances that is not the case and the individual does, in fact, have enough mental capacity to sign a will. However, in some circumstances an individual is clearly incapacitated and a guardianship proceeding may be required in order to obtain the appointment of a guardian to manage the individual’s affairs. If a person is deemed to be incapacitated he/she clearly cannot execute a will.

In order for a will to be valid, the person signing must have “testamentary capacity,” which means he or she must understand the implications of what is being signed. Simply because you have a form of mental illness or disease does not mean that you automatically lack the required mental capacity. As long as you have periods of lucidity, you may still be competent to sign a will.

Generally, you are considered mentally competent to sign a will if the following criteria are met:

  • You understand the nature and extent of your property, which means you know  what you own and how much of it.
  • You  remember and understand who your relatives and descendants are and are able to articulate who should inherit your property.
  • You understand what a will is and how it disposes of property.
  • You understand how all these things relate to each other and come together to form a plan.

Family members may contest the will if they are unhappy with the distributions and believe you lacked mental capacity to sign it. In addition, a will can be contested if “undue influence” was exerted on the signer of the will. If a will is found to be invalid, a prior will may be reinstated or the estate may pass through the state’s intestacy laws (as if no will existed). To prevent a will contest, your attorney should help make it as clear as possible that the person signing the will is competent. The attorney may have a series of questions to ask you to assess your competency. In addition, the attorney can have the will signing videotaped or arrange for witnesses to speak to your competency. In any event, New York law requires that at least 2 individuals witness the signing of a Last Will & Testament.

If you need help with this or other elder care matters, you can locate an Elder Law Attorney near you on ElderCareMatters.comAmerica’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Ronald Fatoullah, Esq., CELA
Ronald Fatoullah & Associates
Great Neck, New York
An ElderCare Matters Partner


Today’s Elder Care Question on ElderCareMatters.com is about the effect of gifting on Medicaid Eligibility

Question:  Will the fact that Dad has given gifts to his children over his lifetime preclude him from receiving Medicaid benefits?

Answer:  The only gifts that matter to Medicaid (currently) are gifts made within 5 years of filing for Medicaid benefits.  There is talk that this will be extended to a 10 year look-back period but this is not the current law.  Small gifts or gifts that are not made in order to qualify for Medicaid are not usually considered a problem during the 5 year look-back period.  A watch or similar item for a birthday or graduation would not present a problem, but an automobile would.

If you need help with this or other elder care matters, you can locate an Elder Law Attorney near you on ElderCareMatters.comAmerica’s National Directory of Elder Care / Senior Care Resources.

An ElderCare Matters Partner
Ivan Michael Tucker, Esq.
Law Office of I. Michael Tucker, PLC
Altamonte Springs, Florida
An ElderCare Matters Partner


Today’s Elder Care Question on ElderCareMatters.com is about Probate

Question:  What is Probate?

Answer:  Probate is the court proceeding to transfer a dead person’s assets to the people who are supposed to get them. Simple in concept, but humbug in practice. Probate can easily take a year or more to complete, and the attorneys’ fees and other costs associated with probate could easily eat up 5% or more of a decedent’s gross estate. (“Decedent” is lawyer talk for a “dead person.”) If a decedent owned assets located in more than one state or country, it may be necessary to have a probate in each jurisdiction where the assets are located. If one probate is bad, you can bet that more than one probate is worse. In addition to the money and time that probate can consume, another reason people try to avoid probate is that the court’s probate files are public records. Nosy people can go through the court’s probate files and gather all kinds of information that may be profitable to them-and detrimental to decedents’ families.

If you need help with this or with other kinds of Elder Care Matters, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.

 

An ElderCare Matters Partner
Scott A. Makuakane, Esq., CFP
Est8Planning Counsel LLLC
Honolulu, Hawaii
An ElderCare Matters Partner

 


Today’s Elder Care Question on ElderCareMatters.com is about the Medicaid Spend Down

Question:  My mother (who is 83 years old, blind, has lived in a nursing home for 4 months but owns a home, and cannot walk) has a $14k spend down for Medicaid.  What exactly can this money be spent on?

Answer:  As an Elder Law Attorney the first question I would have for you is who told you that your mother had a spend down amount of $14,000? Do you mean pre-qualification spend down of your mother’s resources or do you mean post Medicaid approval where the State has determined a Spend Down Amount. The distinction is important since in Illinois pre-qualification spend down is not as restricted as post approval spend down which is generally limited to medical expenditures.

You really need to see an Elder Law Attorney to discuss your mother’s overall situation. Your question indicates that your mother still owns her home. Typically if someone enters a nursing home without an intent to return home, then the home is no longer an exempt asset. In Illinois if certain steps are not taken in regard to the home, it may result in your Mother’s application being denied. In addition, there are several exceptions to rules regarding homes which you may or may not qualify for which can allow the home to be preserved. In addition, you indicated that your Mother has been in the nursing home for 4 months, but have not indicated how the nursing home bill for that period was being paid. Even if your Mother received the full 100 days of Medicare rehabilitative coverage in the nursing home, that still leaves a period of time that must be paid for privately or by Medicaid. While Medicaid will pay for nursing home care for up to 3 months prior to the date of the application, in Illinois the applicant must meet all the Medicaid qualifications on the first day of each of those three months for Medicaid to pay them.

Since your Mother has $14,000 she would not qualify for the pre-application Medicaid coverage as it is above the asset limit. So, whether you have already filed the Medicaid application or not, you must consider what amount your Mother will have to pay to the nursing home which Medicaid will not cover. You need to address that issue prior to making any decision as to how to spend down the balance of the money. These are all complicated questions and issues, and you cannot expect to get correct information from anyone other than an Elder Law Attorney.

I would highly recommend that you pay a portion of that money to an experienced Elder Law Attorney to do an overall evaluation of your Mother’s qualifications, whether her home can be preserved, whether there are any other planning strategies she might be able to take advantage and to make sure that the allocation of her monies is done correctly so that it does not result in either a penalty period or a denial of benefits. Good Luck.

If you need additional information about this or other Elder Care Matters, go to www.ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.

James C. Siebert, Esq., An ElderCare Matters Partner
James C. Siebert, Esq.
The Law Office of James C. Siebert & Associates
An ElderCare Matters Partner


Today’s Elder Care Question on ElderCareMatters.com is: “What is the purpose of a Special Needs Trust?”

Question: What is the purpose of a Special Needs Trust?

Answer: While you can certainly bequest money and assets to those with special needs, such a bequest may prevent them from qualifying for essential benefits under the Supplemental Security Income (SSI) and Medicaid programs. However, public monetary benefits provide only for the bare necessities such as food, housing and clothing. As you can imagine, these limited benefits will not provide your loved ones with the resources that would allow them to enjoy a richer quality of life. Fortunately, the government has established rules allowing assets to be held in trust, called a Special Needs or Supplemental Needs Trust for the benefit of a recipient of SSI and Medicaid, as long as certain requirements are met.

To find additional information about a wide range of Elder Care Matters, go to: www.ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.

James J. Ruggiero, Jr., Esq., An ElderCare Matters Partner
James J. Ruggiero, Jr., Esq.
Ruggiero Law Offices, LLC
An ElderCare Matters Partner


Today’s Question of the Day on ElderCareMatters.com is “What long term care benefits does the VA pay for?”

Question:  What long term care benefits does the VA pay for?

Answer:  The VA has a benefit called the Veteran’s Improved Pension, commonly known as the VA Aid & Attendance Benefit.  In order to qualify for the Veteran’s Pension Benefit, the veteran must not have been dishonorably discharged, must have served at least 90 days active duty with at least one day served during a declared state of war, and must be either disabled or over age 65.  Widows of veterans may also qualify.  Applicants must meet certain income and asset limitations to qualify, and they must need assistance with Activities of Daily Living (ADLs) such as eating, bathing, and dressing.  This benefit can help married veterans may qualify for up to $24,239 of tax free assistance annually.  This money can be used to cover the costs of care in the home, in an assisted living community, or in a nursing home. 

If you think that you or a loved one might qualify for benefits, the next step would be to enlist the service and advice of an experienced Veterans Administration Accredited attorney who understands the Pension Benefit, as well as Medicaid planning rules and other estate planning issues.  Advisors such as a VA accredited attorney and a knowledgeable, experienced financial planner can help veteran households rearrange assets, make legally effective transfers, and assist with other estate planning needs in order to qualify a veteran household for a pension benefit.  It is extremely important that you involve an attorney who has experience with Medicaid planning if you plan on moving or otherwise rearranging assets in order to qualify for the Veteran’s Pension Benefit.  There is a high probability that the veteran, the spouse, or the surviving spouse of a veteran household may need nursing home care in the future.  Such care is very expensive and the individual’s income plus the veterans benefit rarely pay for the cost of a nursing home.  This means the veteran may have to rely on Medicaid to cover the deficit.  Assets reallocated to qualify for VA benefits could create penalties for Medicaid eligibility, underscoring the importance of planning for the possibility of having to apply for Medicaid in the future. 

In addition to the Aid and Attendance Benefit, the VA in its various facilities around the country will provide nursing home care the qualifying veterans.  However, the number of beds are very limited.  The VA provides service-connected disability ratings that range from 10% to 100%. Those veterans who are 100% disabled because of the service-connected injury or illness will receive priority for admission with priority moving down the rating scale.  In addition to the beds available in VA operated facilities in some states the VA has contracted with other nursing homes to make beds available to qualifying veterans.

To find Elder Care Professionals near you who can help you with these elder care matters, go to:  ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals and Resources for Families.

hweatherby
Henry C. Weatherby, Esq., CLU, ChFC, CEBS
Weatherby & Associates, PC
Connecticut State Coordinator – ElderCareMatters.com

 

 


Today’s Q&A on ElderCareMatters.com is from a family who is “Scared about getting old!”

Question:  We are scared about getting Old!  How would we go about planning for the cost of our future elder care needs?

Answer:  I advocate the compilation of a Life Transition Plan (with at least annual updates). This plan documents not only the usual things, like income, expenses, assets and liabilities but also contemplates various scenarios for lifestyle changes (e.g. what will happen if I can’t take care of myself and my spouse can’t/won’t care for me or I don’t have a spouse?) and creates long range budgets around these scenarios. This will then show the gap between possible future needs and likely available resources. At that point, depending upon the particular circumstances, it might be prudent to explore purchasing long term care insurance and/or consulting with and elder law attorney regarding structuring to provide for the availability of public benefits (Medicaid, VA, etc.) should the need arise. This is a highly individualized process with many nuances.

To find elder care professionals near you who can help you with these types of issues, go to ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for Families.

Hope this helps.

ssamotin
Sheri Samotin
LifeBridge Solutions, LLC
Playa Vista, California  90094
An ElderCare Matters Partner


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