How Does Elder Law Compare And Relate To Estate Planning In Florida?
Estate planning encompasses the creation of wills, trusts, power of attorney designations, healthcare surrogates, living wills, other advanced directives, and HIPAA authorizations. Elder law adds another layer of specialty to these documents by adding the concept of planning for long-term care and potential incapacity. Elder law is a sub-specialty of estate planning and focuses not so much what on happens when you pass away, but on what happens if you become ill.
There are other types of attorneys who do estate planning as part of a broader specialization such as business succession planning, high-net-worth asset protection, or high-net-worth estate and income tax planning. When you are looking for an estate planning attorney, that is one distinction to consider. Does it make sense to work with an attorney who has an elder law background when creating your estate planning documents?
Should Elder Law Planning Or Long-term Care Planning Always Be Done With Initial Estate Planning?
You will want to consider basic eldercare planning along with your estate planning documents. This includes being very conscientious about the people you select as your fiduciaries under a durable power of attorney and healthcare surrogate designation. These are your primary decision-makers if you lose the ability to manage your finances and make medical decisions. For someone who is under 65 and still working, elder law planning can be touched on lightly. Between age 50 and 65, there should be a consideration and discussion about long-term care insurance because that is typically when the premiums are more sensible. You need the basics covered and discussed because anyone can be in an accident resulting in the need for fulltime care. More advanced planning is typically covered after age 65.
How Do I Avoid Medicaid Recovery?
In the state of Florida, Medicaid recovery is not as aggressive as it is in other states, but it is still an issue. Medicaid estate recovery relates to anyone who would be using long-term care planning as part of their estate plan. If you qualify for Medicaid during your lifetime but you still have some assets that Medicaid did not count, the state of Florida can exercise a lien against that property and force the sale of it to pay its debt for taking care of you after you pass away. The concept is that you needed the property during your life but once you pass away, the state can be paid back.
The Medicaid estate recovery policy is contrary to most people’s estate planning wishes. They would like to avoid creditors, including the state of Florida, upon their death, and they want to get as much of their property to their beneficiaries and loved ones as possible. In Florida, Medicaid liens are enforced in probate proceedings. Thus, the simple technique to avoid recovery would be to avoid probate. In order to do that, attorneys look to designation of beneficiaries, enhanced life estate, and other forms of asset ownership that do not require probate to transfer assets to beneficiaries.
How Much, On Average, Do Nursing Homes Cost In Florida?
Nursing homes in northeast Florida typically cost around $8,000 to $11,000 per month, if you private-pay. This works out to be $250-$320 per day.
Will Medicare Pay For My Nursing Home Costs?
Medicare and Medicaid are commonly confused, but they have distinct and very important differences. Medicare is health insurance and Medicaid is there to fill in the gaps when you do not have health insurance coverage, and even to pay for long-term care. Medicare pays for rehabilitation within a skilled nursing facility, but it does not pay for long-term indefinite stays in a nursing home. In order to get inpatient rehabilitation at a skilled nursing facility paid by Medicare, you need to first have a qualifying three-night stay, after being admitted into a hospital.
The biggest problem comes when someone goes to the hospital and they are not admitted but are placed on observation status. Advocacy needs to occur if you want Medicare to pay for rehabilitation upon admission to the hospital. After the three-night stay in the hospital, Medicare will cover inpatient rehabilitation, which can carry on to become long-term nursing care for that particular patient. Medicare will pay for the first 20 days. After day 20 and through day 100, Medicare will partial-pay about $170 per day. If you do not have a supplemental plan, then you are going to have to pay a copay.
In order for Medicare to pay for long-term care in a nursing home for rehabilitation, there needs to be standards on the therapy and progress needs to be shown. Sometimes, you will get insurance coverage denials based upon a lack of improvement. However, there is a maintenance component and those denials can be appealed to continue that coverage through Medicare before having to private-pay and apply for Medicaid. Typically, Medicare will cover one to three months of inpatient rehabilitation in a skilled nursing facility.
How Can I Avoid Being Impoverished By The High Cost Of Nursing Home Care?
The main way to avoid financial impoverishment from nursing home care costs is to take part in Medicaid planning with an elder law attorney. The purpose of Medicaid planning is to be advised as to the proper transfer of assets, the proper classification of assets, and probate avoidance strategies so that your assets can be preserved. The typical path of paying for skilled nursing is to spend all your money and all your retirement, sell your house, sell your car, spend everything on your care, and then apply for Medicaid. That is what creates impoverishment.
The problem with the typical path is that you are not taking advantage of existing laws for your enhanced care and quality of life. Once you are approved for Medicaid, basically all your income is paid to the nursing home as part of your monthly copay. You get to keep only $130 and pay for your supplemental or private insurance. You have $130 for haircuts, cellphone bills, supplemental food, and additional care staff to make sure you have an enhanced quality of life. You might have to go without the things you enjoy and survive on the absolute minimums. Preserving assets gives you some fallback, so you can continue a normal quality of life.
If My Spouse Is Going Into A Nursing Home, Can He Or She Just Transfer All His Or Her Assets To Me And Then Qualify For Medicaid?
There are planning options to address the issues of married couples and transferring assets from one spouse to another is a partial solution, but not a complete solution. Certain assets, if they are transferred, will create income tax issues. Some assets, if transferred in the case of a second or subsequent marriage, will create estate disputes. There are solutions that involve moving money to the spouse living at home, but it is only a partial solution. There is more to consider when doing Medicaid eligibility planning for a married couple.
There is a community spouse resource allowance in each state. In the state of Florida, in 2020, the community spouse resource allowance is $128,640. What that means is that the spouse living at home can only have approximately $128,000 of assets. Anything over that will disqualify the nursing home spouse for Medicaid. You need to go to an elder law attorney to make sure that all the issues are addressed and covered and that you still meet Medicaid eligibility criteria.
Can I Transfer My Assets to My Children Before I Go into A Nursing Home and Still Qualify for Medicaid?
When Medicaid was developed, initially, it did not consider the fact that a parent going into a nursing home could simply gift their children all of their inheritance and then have the estate take care of that parent with no future consequence. When state budgets got tight and legislatures discovered that people were taking advantage of the system, the federal guidelines were changed to create a lookback period and a penalty period. The lookback period in Florida is currently five years from the date of the Medicaid application. Within those five years, the state can inquire as to whether there has been a transfer of assets to a child for the purposes of qualifying for Medicaid sooner. If that has been done and the transfer cannot be remedied, then the state of Florida will impose a penalty duration and will not pay for the cost of nursing home care within the duration. It is highly inadvisable to make transfers of assets to children unless directed by an elder law attorney.
Isn’t It Wrong to Hide Assets in Order to Qualify for Medicaid?
The issue of the morality of Medicaid planning is one that has been carrying on for approximately 30 years. The phrase “hide assets” leads people to believe that you are taking cash and illegally stashing it away. Hidden assets can be discovered through bank records, which the state of Florida will request with any Medicaid application. To get money out of a bank or financial institution, you would have to close the account and make a withdrawal. One of the data points that is always requested by Medicaid is proof of account closure and of where the funds went. If there is no explanation, the caseworker is led to believe that there is cash hidden somewhere.
Hiding assets is wrong and illegal and can result in Medicaid transfer penalties. However, there are exceptions to the rules as they relate to which assets are countable and which assets are not countable towards the $2,000 Medicaid asset limit. There are also rules and exceptions regarding which assets must be transferred, to whom the assets can be transferred, why they are transferred, and how they are transferred. There are all kinds of exceptions to the Medicaid rules about what is considered an asset and how you can get rid of that asset.
In an elder law attorney’s office, we will advise on the proper transfer of assets and we will disclose these transfers to the estate and to a Medicaid application while giving legal support for the reasons why we have transferred the asset. There is no hiding. The asset transfers that elder law attorneys engage in are always disclosed. We simply advise as to the law and how to apply the law in each situation. There are no rules that say you must work with an elder law attorney. You can choose not to follow the exceptions in the law that were carved out with the intention of providing quality care and quality of life for Medicaid applicants.
The morality of utilizing elder law attorneys’ services revolves around misconceptions. The elder law attorney works for the person in a nursing home who needs care. If that person is aware that he or she can do things with their assets to provide quality of life in a nursing home, they may choose to do that. The person who is receiving the care should be consulted and deferred to on the issue of the quality of care that he or she wants to pay for.
For more information on Elder Law And Estate Planning, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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