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"How to get Medi-Cal coverage for your nursing home care... without selling your home or leaving your family without a dime... Surprising ways to pay for your assisted living and long term care costs."

Elder Law Today Newsletter | April, 2017

 

Estate Planning and Asset Protection for the Second Half of Life

Many of us are now approaching the second half of our lives and are considering the future financial wellbeing of ourselves, our families and our loved ones. We may have experienced caring for an elderly loved one, and perhaps have had to arrange for in home care, or for their stay in an assisted living facility. We’ve seen how costly care for the elderly can be. We are now looking for a way to preserve our assets for our own care, while providing an inheritance to our family and loved ones.

The first step is to review your estate planning documents, including your revocable living trust and financial durable powers of attorney. California has Medi-Cal, which is a program that will pay for most of the cost of a skilled nursing facility, provided that you have your “ducks in a row” for eligibility. Skilled nursing facilities are usually the most costly level of care. The rules for qualification for Medi-Cal are complicated and as a result, modern estate planning documents should have the appropriate asset protection and, if applicable, government benefits planning provisions. An important benefit of these provisions is to afford you (and your spouse) the ability to obtain eligibility for Med-Cal should you become incapacitated. Additionally, if you are a wartime veteran, the VA Aid and Attendance Pension Benefit may be available to you. Your estate planning documents should also address this VA benefit for possible eligibility. Properly executed estate planning documents will serve to protect us in the second half of our lives.

If you have long term care insurance, you should probably keep it, as this type of insurance is now very difficult to obtain. Many insurance companies are not accepting new applications, and are also lowering benefits and raising premiums.

A newer option for health care, which our clients are now pursuing, is found in insurance policies. The 2010 amendment to the Pension Protection Act, which was signed by President Obama, provides for a 1035 tax-free exchange of many existing annuities and life insurance policies, for Pension Protection Act qualified annuities and life insurance policies. These new qualified policies have long term care provisions which can triple the amount of money distributed to the owner of the policy which can be used for their care. Another benefit of the Act is that the funds distributed for your care are tax free. You can also use portions of your savings to fund these policies.



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