Estate Planning Toolkit: Protecting and Preparing for the ... · Estate Planning Toolkit:...

EstatePlanningToolkit:

ProtectingandPreparingfortheFutureTheEssentialsforYouandYourAgingLovedOnes

P.O.Box739•Forest,VA24551•1-800-526-8673•www.AACC.net

EstatePlanningToolkit

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WelcometoLightUniversityandthe“EstatePlanningToolkit”programofstudy. Our prayer is that you will be blessed by your studies and increase your effectiveness inreaching out to others. We believe you will find this program to be academically sound,clinicallyexcellentandbiblically-based.Our faculty represents some of the best in their field – including professors, counselors andministers who provide students with current, practical instruction relevant to the needs oftoday’sgenerations.We have alsoworked hard to provide youwith a program that is convenient and flexible –givingyoutheadvantageof“classroominstruction”onlineandallowingyoutocompleteyourtrainingonyourowntimeandscheduleinthecomfortofyourhomeoroffice.Thetestmaterialcanbefoundatwww.lightuniversity.comandmaybetakenopenbook.Onceyouhavesuccessfullycompletedthetest,whichcoverstheunitswithinthiscourse,youwillbeawardedacertificateofcompletionsignifyingyouhavecompletedthisprogramofstudy.Thank you for your interest in this program of study. Our prayer is that you will grow inknowledge,discernment,andpeople-skillsthroughoutthiscourseofstudy.Sincerely,

RonHawkinsDean,LightUniversity


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TheAmericanAssociationofChristianCounselors

• Represents the largestorganizedmembership (nearly50,000)ofChristian counselorsandcaregiversintheworld,havingjustcelebratedits25thanniversaryin2011.

• Known for its top-tier publications (Christian Counseling Today, the Christian CounselingConnectionandChristianCoachingToday),professionalcredentialingopportunitiesofferedthroughtheInternationalBoardofChristianCare(IBCC),excellenceinChristiancounselingeducation, an arrayof broad-based conferences and live training events, radioprograms,regulatoryandadvocacyeffortsonbehalfofChristianprofessionals,apeer-reviewedEthicsCode, and collaborative partnerships such as Compassion International, the NationalHispanic Christian Leadership Conference and Care Net (to name a few), the AACC hasbecomethefaceofChristiancounselingtoday.

• With the needed vision and practical support necessary, the AACC helped launch the

International Christian Coaching Association (ICCA) in 2011, which now represents thelargest Christian life coaching organization in the world with over 2,000 members andgrowing.

OurMission

The AACC is committed to assisting Christian counselors, the entire “community of care,”licensedprofessionals,pastors,and laychurchmemberswith littleorno formal training. It isourintentiontoequipclinical,pastoral,andlaycaregiverswithbiblicaltruthandpsychosocialinsights that minister to hurting persons and helps them move to personal wholeness,interpersonalcompetence,mentalstability,andspiritualmaturity.


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OurVision

TheAACC’svisionhastwocriticaldimensions:First,wedesiretoservetheworldwideChristianChurch by helping foster maturity in Christ. Secondly, we aim to serve, educate, and equip1,000,000 professional clinicians, pastoral counselors, and lay helpers throughout the nextdecade.WearecommittedtohelpingtheChurchequipGod’speopletoloveandcareforoneanother.We recognize Christian counseling as a unique form of Christian discipleship, assisting thechurch in its call to bring believers to maturity in the lifelong process of sanctification—ofgrowingtomaturityinChristandexperiencingabundantlife.Werecognizesomearegiftedtodosointhecontextofaclinical,professionaland/orpastoralmanner.Wealsobelieveselected laypeoplearecalledtocareforothersandthattheyneedtheappropriatetrainingandmentoringtodoso.WebelievetheroleofthehelpingministryintheChurchmustbesupportedbythreestrongcords:thepastor,thelayhelper,andtheclinicalprofessional.ItistothesethreerolesthattheAACCisdedicatedtoserve(Ephesians4:11-13).

OurCoreValues

InthenameofChrist,theAmericanAssociationofChristianCounselorsabidesbythefollowingvalues:

VALUE1:OURSOURCEWearecommittedtohonorJesusChristandglorifyGod,remainingflexibleandresponsivetotheHolySpiritinallthatHehascalledustobeanddo.VALUE2:OURSTRENGTHWearecommittedtobiblicaltruths,andtoclinicalexcellenceandunityinthedeliveryofallourresources,services,trainingandbenefits.VALUE3:OURSERVICEWeare committed toeffectivelyandcompetently serve thecommunityof careworldwide—bothourmembership and the churchat large—withexcellenceand timeliness, andbyover-deliveryonourpromises.VALUE4:OURSTAFFWearecommittedtovalueandinvestinourpeopleaspartnersinourmissiontohelpotherseffectivelyprovideChrist-centeredcounselingandsoulcareforhurtingpeople.VALUE5:OURSTEWARDSHIPWe are committed to profitably steward the resourcesGod gives to us in order to continueservingtheneedsofhurtingpeople.


LightUniversity5

LightUniversity• Establishedin1999undertheleadershipofDr.TimClinton—hasnowseennearly200,000

students from around the world (including lay caregivers, pastors and chaplains, crisisresponders,lifecoaches,andlicensedmentalhealthpractitioners)enrollincoursesthataredelivered via multiple formats (live conference and webinar presentations, video-basedcertificationtraining,andastate-of-theartonlinedistanceteachingplatform).

• Thesepresentations,courses,andcertificateanddiplomaprograms,offeroneofthemostcomprehensive orientations to Christian counseling anywhere. The strength of LightUniversity is partially determined by its world-class faculty—over 150 of the leadingChristianeducators,authors,mentalhealthcliniciansandlifecoachingexpertsintheUnitedStates. This core groupof facultymembers represents a literal “Who’sWho” inChristiancounseling. No other university in the world has pulled together such a diverse andcomprehensivegroupofprofessionals.

• Educational and training materials cover over 40 relevant core areas in Christian—

counseling, lifecoaching,mediation,andcrisis response—equippingcompetentcaregiversand ministry leaders who are making a difference in their churches, communities, andorganizations.

OurMissionStatement

TotrainonemillionBiblicalCounselors,ChristianLifeCoaches,andChristianCrisisRespondersbyeducating,equipping,andservingtoday’sChristianleaders.

AcademicallySound•ClinicallyExcellent•DistinctivelyChristian


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Video-basedCurriculum

• UtilizesDVDpresentations that incorporateover 150 of the leading Christian educators,authors,mentalhealthclinicians,andlifecoachingexpertsintheUnitedStates.

• Eachpresentationisapproximately50-60minutesinlengthandmostareaccompaniedbyacorrespondingtext(inoutlineformat)anda10-questionexaminationtomeasurelearningoutcomes.Therearenearly1,000uniquepresentationsthatareavailableandorganizedinvariouscourseofferings.

• Learning is self-directed and pacing is determined according to the individual time

parameters/scheduleofeachparticipant.• With the successful completion of each program course, participants receive an official

Certificate of Completion. In addition to the normal Certificate of Completion that eachparticipant receives, Regular and Advanced Diplomas in Biblical Counseling are alsoavailable.

Ø TheRegularDiploma isawardedbytakingCaringForPeopleGod’sWay,BreakingFreeandoneadditionalElectiveamongtheavailableCoreCourses.

Ø TheAdvancedDiplomaisawardedbytakingCaringForPeopleGod’sWay,BreakingFree,andanythreeElectivesamongtheavailableCoreCourses.

Credentialing

• LightUniversitycourses,programs,certificatesanddiplomasarerecognizedandendorsedbytheInternationalBoardofChristianCare(IBCC)anditsthreeaffiliateBoards:theBoardofChristianProfessional&PastoralCounselors(BCPPC);theBoardofChristianLifeCoaching(BCLC);andtheBoardofChristianCrisis&TraumaResponse(BCCTR).

• Credentialing is a separateprocess from certificate or diploma completion.However, theIBCC accepts Light University and Light University Online programs as meeting theacademic requirements for credentialing purposes. Graduates are eligible to apply forcredentialinginmostcases.

Ø Credentialinginvolvesanapplication,attestation,andpersonalreferences.

Ø CredentialrenewalsincludeContinuingEducationrequirements,re-attestation,andoccureitherannuallyorbienniallydependingonthespecificBoard.


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OnlineTesting

TheURLfortakingallquizzesforthiscourseis:http://www.lightuniversity.com/my-account/.

• TOLOGINTOYOURACCOUNT

Ø You should have received an email upon checkout that included your username,password,andalinktologintoyouraccountonline.

• MYDASHBOARDPAGE

Ø Once registered, youwill see theMyDVD Course Dashboard link by placing yourmousepointerovertheMyAccountmenuinthetopbarofthewebsite.Thispagewill include studentPROFILE informationand theREGISTEREDCOURSES forwhichyouareregistered.TheLOG-OUTandMYDASHBOARDtabswillbeinthetoprightofeachscreen.Clickingonthe>nexttothecoursewilltakeyoutothecoursepagecontainingthequizzes.

• QUIZZES

Ø Simplyclickonthefirstquiztobegin.• PRINTCERTIFICATE

Afterallquizzesaresuccessfullycompleted,a“PrintYourCertificate”buttonwillappearnearthetopofthecoursepage.YouwillnowbeabletoprintoutaCertificateofCompletion.Yournameandthecourseinformationarepre-populated.ContinuingEducationThe AACC is approved by the American Psychological Association (APA) to offer continuingeducationforpsychologists.TheAACCisaco-sponsorofthistrainingcurriculumandaNationalBoard of Certified Counselors (NBCC)ApprovedContinuing Education Provider (ACEPTM). TheAACC may award NBCC approved clock hours for events or programs that meet NBCCrequirements.TheAACCmaintainsresponsibilityforthecontentofthistrainingcurriculum.TheAACCalsoofferscontinuingeducationcreditforplaytherapiststhroughtheAssociationforPlayTherapy (APT Approved Provider #14-373), so long as the training element is specificallyapplicabletothepracticeofplaytherapy.It remains the responsibility of each individual to be aware of his/her state licensure andContinuing Education requirements. A letter certifying participation will be mailed to thoseindividuals who submit a Continuing Education request and have successfully completed allcourserequirements.


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Presenterfor

EstatePlanningToolkit:

ProtectingandPreparingfortheFutureTheEssentialsforYouandYourAgingLovedOnes


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PresenterBiography

Stephen D. Lentz, J.D., Esq., is a graduate of Marshall-Wythe School of Law,College ofWilliam andMary inWilliamsburg, Virginia. Mr. Lentz has extensivenationaland internationalbusinessandmarketingexperienceandworkscloselywith faith-based clients, local churches and ministry organizations. He is thefounder and senior partner of Stephen D. Lentz & Associates, PLC in VirginiaBeach,Virginiaandservesavarietyofclientsworldwide.Heservesasanadjunctprofessor at Regent University School of Business, Regent University School ofCommunications and Regent University School of Law, where he is currentlyteachingWills,Trusts,andEstates.In2007and2008,Mr.Lentzwasawardedthecoveted“AdjunctProfessoroftheYear”bytheStudentBarAssociation.Visithiswebsiteatwww.lentz-law.com.


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EstatePlanningToolkitTableofContents

FinancialIssuesoftheAging:EstatePlanningBasics.................................................................11

LegalandMedicalDirectives:Long-termCare...........................................................................20

NavigatingtheSystem:Medicare,Medigap,andMedicaid.......................................................30


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ESPT–01

FinancialIssuesoftheAging

EstatePlanningBasicsfortheElderly

StephenD.Lentz,J.D.,Esq.


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AbstractTheAmericanelderlyarefacedwiththeissuesofhealthcare,assetpreservation,Medicaidand

Medicareeligibility,retirement,andcompetency.Thenumberofelderlywithinthepopulation

is increasingly growing and this impacts every area of society. This session discusses the

importance of estate planning and the six basic ways to conceptualize your estate needs:

havingawill,doingnothing,usingjointownership,makinggifts,usingbeneficiarytransfers,and

havingalivingtrust.Throughthislesson,onewilllearntheimportanceofplanningasopposed

toreacting.

LearningObjectives

1. ParticipantswillbeabletoarticulatetheissuesofestateplanningusingthefieldofElder

Law.

2. Participantswillexplorethewiderangeofissuesfacingtheelderlyandtheimportance

ofestateplanningatanyage.

3. Participantswillidentifythesixbasicwaystoplantheirestateandtheprosandconsof

each.


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I. TheAmericanElderly

A. GrowingNumbers

1. AtthebeginningoftheMillennium(2000),45.8millionpeoplewere60+.

2. By 2030, it is estimated that therewill be 92.2million people inAmerica over 60

yearsold.

3. Thisimpactseveryareaofoursociety.

4. It’sadilemmaforthegenerationofchildrenwhoaredealingwiththeirparentsand

thoseapproachingretirementbecausetheyarequestioningwhattheyaresupposed

todo.

B. TheFieldofElderLaw

1. Thereareawiderangeofissuesfacingtheelderly:

• Healthcare

• Assetpreservation

• MedicaidandMedicareeligibility

• Retirement

• Competency

2. Competencyisamajorissueconcerningstatedocuments.

• Dotheyknowtheimportanceofwhattheyaredoing?

• Cantheyactuallysignthedocument?


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II. EstatePlanningandtheElderly

A. Planning

1. Properplanningatanyageisessentialtoensureassetsaredistributedcorrectly.

2. Without planning, assets will fall into Intestate Succession: the state will decide

whereyourassetswillgo.

3. Thereisnomoreimportantplanningmomentthandealingwithelderlyclients!

B. SuccessionPlanning:MoreVitalThanEver

1. Thereisavarietyofestateplanningoptionsavailable:

• IntestateSuccession

• Jointtitling

• Doityourself…“HolographicWills”(handwritten)

• Gifting

• RevocableLivingTrusts

2. EstatePlanningisimportantbecause:

• Afterdeath,onecancontrolwhoreceivesassetsratherthanthestate

• Onewillpayminimumfeesandtaxesbyhavingaplanasopposedtothereactive

part.

• At incapacity, one can control assets or identify thosewhowillmakemedical

decisions.

C. WhoNeedsEstatePlanning?

1. Everyonewhoisanadultneedsanestateplanincluding:

• Singleadults


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• Familieswithyoungchildren

• TheElderly

2. Again,thisdetermineswhoone’sassetsgoto,whowilltakeofthechildren,aswell

as setting up children for success by determining when they will take their

inheritance.

D. WhenShouldYouPlan?

1. Thebesttimetoplanyourestateisnow,whileyoucanandbeforeyouneedit.

2. Withestateplanning,thereisnosecondchance.

III. PlanningyourEstate

A. CommonEstatePlans

1. Commonestateplansinclude:

• Donothing

• Givingawayassets

• Usingjointownership

• Havingawill

• Usingbeneficiarytransfers

• Havingalivingtrust

2. Thesecomponentscontributetothedecisiontohaveawill:

• Awillexpressesyourwishes.

• Willsonlycontrolassettitledinone’sname.

• AwillisenforcedbyProbateCourt.


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B. Probate

1. Probateisalegalprocesswhere:

• Thewillisvalidated.

• Debtsarepaid.

• Assetsaredistributedaccordingtothewill.

2. The only legalway to change a title on an asset iswhen the person listed as the

ownercannotsignhisorhername.

3. TheaveragetimeforprobateinUnitedStatestodayisabout9monthsto2years.

4. Probateiscostly.

• $100K estate in Florida was costing $2,000 and $5,000 in New York and

Pennsylvania.

• $600K estate average cost of probate was $9,000 in Texas and Virginia and

$22,000inNewYorkandPennsylvania.

• Thesedidnotincludeexecutorfees.

5. Probateispublic.

• Anyinterestedpartycanseewhatyouowned.

• Theprocessmakesthewilleasytocontest.

• Exposesyourfamilytounscrupuloussolicitors.

C. WillsandIncapacity

1. Awillisa“deathdocument.”

2. Willsdonotspeaktoincapacityordisability.

3. Willsonlygointoeffectafteryoudie.


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D. RevocableLivingTrust

1. Revocablelivingtrustsarenotnew.

• Theyhavebeenusedforhundredsofyearsjustlikewills.

• Bothawillandarevocablelivingtrustnamesomeonetohandlefinalaffairs(an

Executor).

• Bothawillandarevocablelivingtrustnamewhoyouwanttoreceiveassets.

2. Revocablelivingtrustsavoidprobate.

3. Theword“revocable”meansthatitischangeable.

E. FourTitles

1. Thegrantor(you)àcreatesandcontrolstrust.

2. Thetrusteeàmanagesassetsplacedinthetrust.

3. Firstbeneficiaryàallassetsbelongtoyou.

4. Thecontingentbeneficiariesàreceiveassetswhenyoudie.

F. CompanionDocuments

1. Therearemorecomponentstoastateplanthaneitheratrustorawill.

2. Trustsarelifedocumentsasopposedtoawill,whichisadeathdocument.

3. Therearefourcomponentstoagoodestateplan:

• Documents


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• Pour-overwill

• DurableGeneralPowerofAttorney

• LivingWillorAdvancedMedicalDirective

G. DurableGeneralPowerofAttorney

1. ADurableGeneralPowerofAttorney isalegalinstrumentthatisdrawnupbyan

attorney.

• DonotusetheInternet.

• PowerofAttorneyneedstomakesurethatthepowersarebroadenoughtotake

careofalloftheaffairsoftheperson.

• Anon-disclosureclauseneedstobeincluded.

• This clause states that if sued, the Power of Attorney cannot be used to get

evidencefortrial.

2. ThebenefitsofaPowerofAttorneyinclude:

• Givesyouragentthepowertomakedecisions.

• Givesyouragenttheabilitytosignlegaldocuments.

• If incapacity, disability, or incompetence is present, thepowerof attorneywill

havethedecision-makingauthority.

• Power of Attorney is a valuable tool to avoid costly and embarrassing public

appointments.

IV. LivingWillorAdvancedMedicalDirective

A. ForMedicalDecisions

1. AnAdvanceMedicalDirectiveisimportantinmedicaldecisions.

• Cananswer thevitalquestion that if youare terminal,death is imminent, and

thereisnohopeofrecovery,“Doyouwanttobeartificiallykeptalive?”


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• Givesthepowertotheagent(usuallyaspouse,child,ortrustedfamilymember)

to be able to go ahead andmake the decisionwhen one is terminal, death is

imminent,andthereisnohopeforrecovery.

2. AformoftheAdvancedMedicalDirectivemaybegiventhroughthehospital.

• PartA:Doyouwanttobeartificiallykeptalive?

• Doyouwanttoberesuscitatedornot?

3. TheimportantpartofalegallydraftedAdvancedMedicalDirectiveisPartB.

• PartBstateswhotheappointedagentisandgivesthatpersonmedicalPowers

ofAttorneythatallowshim/hertoverifywhethertheperson is inthatspecific

spotofbeingterminal,deathisimminent,andthereisnohopeofrecovery.

B. Planning

1. Planningissuperiortoreacting!

2. Make sure to send your clients to an estate-planning practitioner, not a general

practitionerwhodoesnotspecializeintheseareas.

3. HavingaRevocableLivingTrustisthefarsuperiorwaytotransferassetsseamlessly,

without interruption, minimize probate length of time and cost, and be able to

privatelypassthingsontolovedones.

V. Resource:

www.lentz-law.com


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ESPT–02

LegalandMedicalDirectivesLong-TermCare



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Abstract

Thestudyoflong-termcarecoversmedical,social,personal,supportiveandspecializedservices

requiredby individualswhohave lost someability tocare for themselvesdue todisabilityor

illness. This session introduces the components of long-term care and the importance of

planningaheadsothatindividualsmaymaintainanoptimumlevelofindependence.

LearningObjectives

1. ParticipantswillbeabletoarticulatethefeaturesofLong-TermCareintoday’ssociety.

2. Participantswillexplore the twovarious typesofLong-TermCareandunderstand the

riskofthem.

3. Participantswill identifyhow the currentHealthCareAct affects Long-TermCareand

knowthechangesthataretakingplace.


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I. Long-TermCare

A. TheStudyofLong-TermCare

1. Thestudyoftheneedforlong-termcare(LTC)encompassesawidearrayofmedical,

social, personal, supportive and specialized services required by individuals who

have lost somecapacity for self-carebecauseofadisablingconditionora chronic

illness.

2. Thereisnoneedforfearoranxiety.

3. Itisjustaproblemrequiringasolution.

“Planningisfarsuperiortoreacting!”

B. AspectsofLong-TermCare

1. The primary goal of LTC is to maintain a patient’s maximum functional

independence.

2. Thegoalisnotto“cureanillness,”buttoallowtheindividualtoattainandmaintain

anoptimalleveloffunctioning.

3. LTC pertains to theorganization, financing, and delivery ofMedical and Human

Servicestopeopleinneed.

C. SettingsforLong-TermCare

1. LTCcantakeplaceinavarietyofsettings,including:

• Anindividual’shome

• Atsitesinthecommunity


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• InanAssistedLivingFacility(ALF)

• InaSkilledNursingFacility(SNF)

2. Theprimarygoalistoenablethepersonswhoprefertoremainintheirhomestobe

abletodosoandtomaintaintheirindependenceaslongaspossible.

3. Therearetwotypesoflong-termcare:

• MedicalLong-TermCare

• NonmedicalCare

D. MedicalLong-TermCare

1. Medical long-term care is “chronic care”with the aimofmanagement, control of

symptoms,andmaintenanceoffunction.

2. Medicallong-termcareincludes:

• Falls,fractures,andinjuries

• Pulmonaryandcardiovasculardisorders

• Psychiatricdisorders

• Kidneyandlivermalfunction

• Prescriptiondrugtreatment

• Labwork

• Surgeries

E. NonmedicalCare

1. Manyindividualsrequiringlong-termcarearenotill.


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2. LTConthe“nonmedicalfront”ismorelikecustodialcare,designedtoassistpeople

withsupportservicesfordailytaskssuchas:

• Bathing

• Grooming

• Eating

• Dressing

• “Private/intimate”activities:personalhygiene,dressing,andtoileting

3. ActivitiesofDailyLiving(ADLs)aredailyactivitiessuchasgettingintooroutofbed,

showering,anddressing,eating,andthebasicsofself-care.

4. PrivateinsuranceandMedicaidrelyonADLmeasuresas“triggers”forbenefits.

5. Typicallyapersonwillneed2outof6ADLsthatrequireassistanceinordertotrigger

benefitsforLTC.

• Bathing

• Maintainingcontinence

• Eating

• Toileting

• Dressing

• Transferring(gettingoutofbedorachair)

6. ResidentsinLTCfacilitiesneedhelpwithanaverageoffourADLs.

7. Residentsinhomesneedhelpwith2.5ADLs.

II. Long-TermCareRisksandStatistics

A. Whoisatrisk?1


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1. Theriskofneedinglong-termcareincreaseswithage.

• 40%ofthosewhoneedLTCare40yearsoryounger.

2. Atyoungerages,congenitaldefectsandaccidentsaretheprimarycause.

3. Duringthemiddleages(45-55),congenitaldiseasescontributetotherisk.

4. After age 70, multiple health conditions and frailty combine with congenital

diseases.

B. OtherFactsandStatistics

1. Morethan6millionelderlyAmericansneedassistancefromfamilyorfriendsifthey

aretoliveathome.2

2. At least 2/3 of all home-care assistance is provided free by family members and

friends.3

3. Bytheyear2020,1outof6Americanswillbe65orolder.4

4. Ofthepeopleturning65,69%willneedsomelong-termcarebeforetheydie.5

5. More than half of the U.S. population will require some type of LTC during their

lives.6

6. Theaveragenursinghomestayisapproximately2.5years.7

• However,thereisa5-yearlookbackasfarasfundsthathavetransferredoutof

thatperson’sestatetotryandqualifythemiftheyaregoingtohaveitpaidby

Medicaid


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7. After2021,thepopulationinnursinghomesisexpectedtoincreasesubstantiallyto

3outof4millionresidents(thisistheyeartheoldestbabyboomerswillturn75).8

III. TheCostofLTC

A. Services

1. ServicesassociatedwithLTCarethemostexpensivehealth-carecostsever.

2. Costfactorsinclude:

• Locationofcare(regionalcosts)

• Typeofproviderwhoadministerscare

• Lengthofcare

3. Theaverageburnrateinaskillednursinghomecanbe$6,000-$10,000permonth).

• Community-BasedServices…Low

• HomeHealthCare…LowtoHigh

• BoardandCareRooms…LowtoHigh

• AssistedLiving…MediumtoHigh

• ContinuingCareRetirementCommunities…High

• SkilledNursingHomes…High


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IV. LevelsofLTC

A. CustodialCare

1. ThepurposeofcustodialcareistoprovideassistancewithADLs.

• Aimedatmeetingpersonalneeds(asopposedtomedicalneeds).

• Performedinthehomebyfamilyandfriends.

• Performedin“residencefacility,”unlicensedindividualsorlicensedhealthaides.

• “Resthomes”…”nursinghomes.”

2. MajorityofLTCpatientsreceive“custodialcare.”

B. IntermediateCare

1. Intermediatecare is likedoctor’ssupervision,but“continuousmedicalcare” isnot

needed.

2. Intermediate care is usually “nursing or rehabilitative care” (example: knee

replacement).

V. EmergingFrontier:AffordableHealthCareAct

A. MajorTrend

1. Thereare18,000careagenciesintheUnitedStates.

• Non-skilled

• Momandpop

• 99.8%donotofferhealthcarebenefits

2. HealthCarecostswillrise.

• Overtimeisbeingrequiredtobeadded


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3. Whowillpay?

• Companieswillcapworkers

• Homecarecostswillincrease

B. Shift

1. Affordable and safe consumer access directly to the healthcare providerswithout

traditionalagencies.

2. Agencieswillbemoreexpensiveandmorecomplicatedtohirethaneverbefore!

• “CareFamily handles insurances, bonding, payroll taxes; tasks that families or

careproviderswouldotherwisehavetomanage.”9

• “A result of having low expenses is that CareFamily can undercut the hourly

chargesoftraditionalagencies.”10

• “A family can remotely monitor a caregiver's attendance, provide reminders

aboutmedicationsandexchangecareplans.”11

• “CareFamily’sinnovativeuseoftechnologyallowsseniorstoremainintheirown

home,whilefamilymemberscloselymonitortheircare.”12

C. HowitWorks13

1. Thenationalaverageofhourlycostinthehomeusinganagencywouldbe$21per

hourasopposedto$14perhourunderhybrids.

• Thefamilysaves$7perhourbycuttingouttheagency.

2. Whenworking foranagency, theworkeronly receives$9perhourasopposedto

$12perhourthroughahybrid.

Don’tmisstheopportunitytoplan!


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Endnotes1RobertB.Friedland,“FacesofLong-TermCare:ALookintheMirror,”inGeorgetownUniversity,Long-TermCare

FinancingProject(2007).2“AmericansforLong-TermSecurity,”Long-termCareWeb,June7,2007,www.ltcweb.org/.3Ibid. 4Ibid.5PeterKemper,HarrietL.Komisar,andLisaAlecxih,“Long-TermCareOvertheUncertainFuture:WhatCanCurrent

RetireesExpect?”InquiryJournal,43(4)(2005):335-350.6“AmericansforLong-TermSecurity,”Long-termCareWeb,June7,2007,www.ltcweb.org/.7Ibid.8Ibid.9AldoSvaldi,“CareFamilyTargetsDenverforNewSeniorCareApproach,”DenverPost,October8,2012,

www.denverpost.com/business/ci_21709395/carefamily-targets-denver-new-senior-care-approach?IADID=Search-

www.denverpost.com-www.denverpost.com.10PhilipMoeller,“CanTechnologyReinventHowWeCareforSeniors?”U.S.NewsandWorldReport,February

15,2013,www.money.usnews.com/money/blogs/the-best-life/2013/02/15/can-technology-reinvent-how-we-

care-for-seniors.11“AsFeaturedIn,”CareFamily,June7,2013,www.carefamily.com/.12Ibid.13“HowCareFamilyWorks,”CareFamily,June14,2013,www.carefamily.com/about-us.


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ESPT–03

NavigatingtheSystem

Medicare,Medigap,andMedicaid



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Abstract

Asoneages,itisimportanttounderstandthedifferenttypesofinsuranceprograms.Medicare,

Medigap,andMedicaidtargetspecificpopulationsandcoveravarietyofhealthrelatedneeds.

There are also varying degrees of coverage under each program, and by gaining a deeper

understandingofeachprogram,apersonwill beable to choosewhichprogramswouldbest

meettheirhealthrelatedneeds.

LearningObjectives

1. Participants will be able to identify the components of Medicare, Medigap, and

Medicaid.

2. Participantswillunderstandthelimitationsofeachprogram.

3. Participants will achieve greater insight into the common objections to Medicaid

planning.


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I. Medicare

A. ComponentsofMedicare

1. MedicareistheFederalGovernment’shealthinsuranceprogram.

2. Medicarewasimplementedin1965targetingadultswhowere65orolder.

3. Thosewhoare65andolderarenottheonlyoneswhobenefitfromMedicare.

• Thosebenefittedcanbeyoungerifthereareassociateddisabilities.

• Thosebenefittedcanbeyoungerifthereispermanentkidneyfailure.

• ThosebenefittedcanbeyoungerifthepatienthasLouGehrig’sdisease.

4. Thisisafederallyfundedprogramthat“helps”withhealthcarecosts.

• Itdoesnotcoverallmedicalexpensesassociatedwithanindividual’slife.

• Medicaredoesnotcoverlong-termcare.

5. TherearefourcomponentsoftheMedicareprogram.

• Hospitalinsurance

• Medicalinsurance

• MedicareAdvantage

• Prescriptiondrugs

B. HospitalInsurance

1. Hospital insuranceunder the federally fundedplan is free to citizenswhoare65+

andwhoarepermanentU.S.residents.

2. Medicarecoversinpatienthospitalcare,somenursingcare,healthcare,andhospice

care.


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3. Thistypeofcareisdesignedforhospitalrelatedincidencesthatcomeup.

C. MedicalInsurance

1. Foranadditional,optionalfee,patientscanpurchasemedical insurancetogowith

thehospitalcomponentoftheMedicareplan.

2. MedicalinsuranceunderMedicaredoesnotcomeautomatically.

D. MedicareAdvantage

1. MedicareAdvantageisreallywhatiscalled“Medigapinsurance.”

2. Medicare Advantage is offered through private health insurance companies and

privateproviders.

3. MedicareAdvantageexpandscoverageforhospitalandmedicalinsuranceandadds

prescriptiondrugs.

4. ItisbasicallywhatyouarepayingforifyouareusingaHMOorPPO.

5. OneofthehallmarksoftheMedicareAdvantageisthatitrequiresthepatienttosee

doctorswhoareenrolledinthatplan.

E. PrescriptionDrugs

1. The option to be able to have prescription drugs paid for underMedicare can be

purchased.


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2. Drugs are becomingmore expensive and it makes the optional prescription drug

componentofMedicareveryimportant.

F. MedicareandLong-TermCare

1. Medicaredoesnotpayforlong-termcare.

2. Medicareisdesignedtocovermedicalexpensesforacuteconditions.

3. Medicare does pay for medically necessary skilled nursing homes, but for short

periodsoftime.

• 3daysinthehospital

• Needforskillednursingcare

• Doctorhasorderedcare

• Thepaymentonlylastfor100days


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4. Medicare will not pay for personal care services or custodial care outside of the

nursingfacility.

5. Medicaredoesnotcover“custodialhomehealthcare.”

II. Medicaid

A. MedicaidSpend-Down

1. “Spend-down” isaprocessofreducingtheassetsan individualpossesssothatthe

individualcanqualifyforMedicaid.

2. Spend-downisnothingmorethanspendingone’smoneyuntiltheappropriateasset

limitisreached.

B. MedicaidEligibility

1. Medicaidtargetsthosewithlowincome.

2. Medicaidspecificallytargets:

• Pregnantwomen

• Childrenunder19

• Peoplewhoare65+

• Peoplewhoaredisabled

• Peoplewhoneednursinghomecare

C. Example

1. The state of New Jersey has the asset limit to be able to qualify forMedicaid of

$2,000.


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• Therearedifferentrulesthatapplytoamarriedcouplethanthosethatapplyto

anindividual.

• Toqualifyforthe“MedicaidOnly”programinNewJersey,thepersonhastobe

65-yearsold,havealimitedincome($1,737/monthorless),andamedicalneed.

2. Inmostcases,whendealingwithseniorcitizens,theindividualisinorisanticipating

goingintoanursinghomeoranassistedlivingfacility.

• Dependingonthefactsoftheindividualcase,notallassets,includingcash,have

tobespentdown.

D. SpendDownExemption

1. Certainassetsareexemptfromthespend-down.

2. Forexample,inthecaseofasingleindividual,theindividual’shomeisexemptifthe

personintendstoreturntoit.

3. InNewJersey,itisassumedbyMedicaidthatthepersonwillnotreturnhomeifthe

persondoesnotreturnwithinsixmonthsofenteringthenursinghome.

• Thisisanassumptionthatcanberebutted.

4. If, on the other hand, the individual in the nursing home is married and the

“communityspouse”isstillinthehome,thenitisexemptfromthespend-down.

• Similarly,inthecaseofthemarriedcouple,thefamilycarisexempt.

• The community spouse, that is, the non-institutionalized spouse, enjoys a

“communityspouseresourceallowance”whichmeansthathe/shegetstokeep

one-halfofalltheassetsofthecoupleuptoapredeterminedmaximum.

• Theassetsthatcomprisethecommunityspouseresourceallowanceareexempt

fromspend-downbecause,bylaw,thespouseispermittedtokeepthoseassets.


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• Allassetsinexcessofthecommunityspouse’ssharearesubject,ifnototherwise

exempt,tothespend-down.

5. If thecouplehasahouseand$100,000cash, thecommunityspousewouldget to

keepthehouseand$50,000.

• Theinstitutionalizedspouse,inordertoqualifyfortheMedicaidOnlyProgram,

wouldhavetospend$48,000.

• Thespenddownis$48,000.

6. Theamountofthespend-downisdeterminedbasedontheassetsofthecoupleas

of the day the institutionalized spouse enters a facility, hospital, nursing homeor

assistedlivingfacilityforanextendedstay.

• Thisiscalledthe“snapshotdate.”

7. Thereareexemptionsandallowancesavailabletocouples,whicharenotavailable

tosingleindividuals.

8. A single individual is not entitled to any allowanceother thana $35/daypersonal

needsallowance(tolimitedexceptions).

• The allowances for the community spouse are intended to protect the

communityspousefrombecomingimpoverished.

9. Thespend-downisnotaroboticspendingofmoney.

• AnindividualorcouplecandesignaMedicaid/AssetProtectionPlan.

• The goal ofwhich is to “dispose” of assets in a systematic, plannedmatter in

ordertoprotectandpreservethoseassetsforthefuture.

10. Disposalofassetsdoesnotnecessarilymean“spending”assets.


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• Disposition for a couple may mean conversion of assets from “countable” to

“exempt.”

• One example of conversion from countable to exempt is the purchase of a

funeralfortheinstitutionalizedspouse.

• Spend-downdoesnotmeanthattheassetsmustbespentoncare,(e.g.,medical

careand/orthenursingfacility).

11. Spend-downmeansthatthefundsareusedtopurchaseitemsattheir“fairmarket”

value.

• “Fairmarketvalue”mustdistinguishthespend-downfrom“gifting”(i.e.,giving

somethingawayormakingapurchaseforlessthan“fairmarketvalue”).

• Thepurchaseofclothes,atelevision,ahaircutorothersimilaritemsareforfair

marketvalueanddonotconstituteas“gifts.”

• GiftsorpurchasesforlessthanfairmarketvaluearepenalizedbyMedicaidand

thepenaltiesresultinperiodsofineligibilityforMedicaid.

E. Medicaid/AssetProtectionPlanning

1. Medicaid/Asset Protection Planning is the process of designing a plan for the

disposition of assets in such a fashion as to save themaximum amount from the

spend-down, thereby protecting those assets from “loss” by being spent on long-

termcareorforothermedicalpurposes.

2. Usually,planninginvolvesthetransferofthefundstothechildrenofthecoupleor

individualandoncegivenbelongtotherecipient(s)todowithastheywish.

III. EthicsofMedicaidSpend-Down

A. Economics


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1. ClientsrequestMedicaidplanningadviceprimarilytolessentheeconomicimpactof

long-termcare.

• The cost of long-term care is often catastrophic for the elderly, middle class

individuals,andcouples.

2. Is it “wrong” to help the elderly protect their assets by engaging in Medicaid

planning?

B. CommonObjectionstoMedicaidPlanning

1. Medicaidplannersareoftenaccusedof“gamingthesystem”fortheirundeserving

andoverprivilegedclients.

2. Medicaidisforthe“poor,”notforpeoplewhohavemoneyandcanhirethelawyers

tosheltertheirassets.

3. Ifleftunchecked,Medicaidplanningwillbankruptthesystem.

4. TheresultofuncheckedMedicaidplanningwillbeatwo-tieredsystemoflong-term

care:thosewhocanpayprivatelyforgoodcareandthosewithnomoneywhoare

forcedintoMedicaidnursinghomesthatprovidesubstantialcare.

5. Medicaidplanningisaformofelderabuse.

• Becausemanyeldersinnursinghomeslackthementalcapacitytochoosetodo

Medicaid planning, their children, who stand to gain most from saving the

moneyfromthenursinghome,makethechoiceforthem.

• Insteadoftheelder’sassetsbeingexpendedtopayforgoodlong-termcare,the

assetswindupinthechildren’shands—andtheelderwindsupwithsubstandard

long-termcare.


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6. Medicaidplanningdiscourages“personalresponsibility.”

• Theasset-focusedMedicaidplanningthatelevatesprotectingtheelder’sassets

from the nursing home above all other goals, particularly above the goal of

promotingandmaintainingtheelder’squalityoflifeandqualityofcare

7. TheelderlawattorneywhoishiredtodoMedicaidplanning,butwhofailstotake

reasonablemeasurestoavoidorminimizethelikelihoodthatharmwillresulttohis

client,isactingunethically.

8. Mom and Dad worked all their lives and paid into the system. Why, then, is it

unethicalforthemtodoMedicaidplanningandgettheirmoneybackout?

9. AnotherargumentmakesananalogyofMedicaidplanningtoestatetaxplanning.

• Ifitisokaytodoestatetaxplanningtominimizeestatetaxes,whyisitnotokay

tosavenursinghomecostsbyMedicaidplanning?

10. DefenderswillsayMedicaidplanning,likeestatetaxplanning,islegal.

• Healthcarecoststhreatentodepleteanelder’sestateduringhislifetime.

• ThegoalofMedicaidplanningisthereforetopreservetheindividual’sestate.

• Ethical rules allow elder law attorneys to assist clients who wish to minimize

thosecosts,eveniftheplanisaggressive,aslongastherepresentationiscarried

outwithintheboundsofthelaw.


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Copyright2013LightUniversity

AllRightsReserved.

NopartofthispublicationmaybereproducedinanyformwithouttheexpressedwrittenpermissionofLightUniversityortheAmericanAssociationofChristianCounselors.

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