End-of-Life Care Decision Making

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Just as we create estate plans for our eventual demise, we also need to plan ahead for the possibility that we will become sick and unable to make our own medical decisions. Medical science has created many miracles, among them the technology to keep patients alive longer, sometimes indefinitely. As a result of many well-publicized “right to die” cases, states have made it possible for individuals to give detailed instructions regarding the kind of care they would like to receive should they become terminally ill or are in a permanently unconscious state. These instructions fall under the general category of…

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8 Tips for Having ‘The Talk’ with Elderly Parents

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Talking about estate planning is a difficult, emotional topic but it’s essential for every family. Unless you’re certain your parents have an up-to-date will and a wider plan for what should happen in the event of their passing, you shouldn’t assume everything will be taken care of. According to a 2017 survey, less than half of Americans have a will. If your mother or father dies intestate – meaning without a will – such a situation could lead to added emotional strain and stress. And it could have financial implications for all their children and/or other family members. The following…

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Medicaid’s Asset Rules

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In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,500 in “countable” assets (the figure may be somewhat lower / higher in some states). Note that Medicaid is a state-run program, so the rules are somewhat different in each state, although there are federal guidelines. The spouse of a nursing home resident–called the “community spouse” — is limited to one half of the couple’s joint assets up to $128,640 (in 2020) in “countable” assets. This figure changes each year to reflect inflation. Called the “community spouse resource allowance,” this is the most that…

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How Does Medicaid Treat Income?

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The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. The deductions include a $83-a-month personal needs allowance (this amount may be somewhat higher or lower in your state), a deduction for any uncovered medical costs (including medical insurance premiums), and, in the case of a married applicant, an allowance for the spouse who continues to live at home if he or she needs income support. A deduction may also be allowed for a dependent child living at home. In determining how a Medicaid applicant’s income…

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Medicaid Protections for the Healthy Spouse

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Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home. The so-called “spousal protections” work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for…

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Caregiver Contracts: How to Pay a Family Member for Care

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Although people are willing to voluntarily care for a parent or loved one without any promise of compensation, entering into a caregiver contract (also called personal service or personal care agreement) with a family member can have many benefits. It rewards the family member doing the work. It can help alleviate tension between family members by making sure the work is fairly compensated. In addition, it can be a be a key part of Medicaid planning, helping to spend down savings so that the elder might more easily be able to qualify for Medicaid long-term care coverage, if necessary. The following are some things…

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Medicaid’s Treatment of the Home

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Nursing home residents do not automatically have to sell their homes in order to qualify for Medicaid, but that doesn’t mean the house is completely protected. The state will likely put a lien on the house while the resident is living and attempt to recover the property after the resident has passed away.  Medicaid will not count a nursing home resident’s home as an asset when determining eligibility for Medicaid as long as the resident intends to return home (in some states, the nursing home resident must prove a likelihood of returning home). In addition, the resident’s equity interest in…

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Protecting Your House from Medicaid Estate Recovery

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After a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient’s care. This is called “estate recovery.” For most Medicaid recipients, their house is the only asset available, but there are steps you can take to protect your home. Life estatesFor many people, setting up a “life estate” is the simplest and most appropriate alternative for protecting the home from estate recovery. A life estate is a form of joint ownership of property between two or more people. They each have an ownership interest in the property, but…

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Reverse Mortgages: A Way to Remain at Home Longer

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Under our “system” of paying for long-term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there’s little public assistance for home care. Most people want to stay at home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home. If you own a home and are at least 62 years old, you may be able to quickly get money to pay for long-term care (or anything else) by taking…

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Is a Reverse Mortgage Right for You?

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While reverse mortgages may look like no-lose propositions on the surface, they also have some significant downsides. First, the closing costs for these loans are about double those for conventional mortgages. For example, closing costs on a $110,000 reverse mortgage for a $200,000 home would be more than $10,000. These costs can be financed by the loan itself, but that reduces the money available to you. Reverse mortgage payments also may affect your eligibility for government benefits, including Medicaid.  Generally, these payments will not be counted as income as long as they are spent within the same month that they…

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