Estate Planning For Title 19
What is the difference between a family that loses hundreds of thousands of dollars to nursing home costs and a family that preserves hundreds of thousands of dollars from nursing home costs? In many cases, the difference is time and the desire to obtain effective legal advice.
Let me share the story of a client of mine. This client one day mentioned that her mother “Helen” resided in an assisted living facility. Helen was doing well with no chronic health issues, although naturally she was getting older and her risk for Alzheimer’s and other chronic health issues increased every year. Like many people, Helen preferred the majority of her life savings pass on to her family rather than be consumed or at risk for possible nursing home costs that exceed $90,000 per year in Connecticut.
After reviewing the situation with Helen and her family to gain a better understanding of her wishes and the financial realities of the situation, I put together a plan to accomplish Helen’s goals of keeping her life savings within the family without jeopardizing her own eligibility for Title 19 Medicaid benefits. Helen’s family promptly reviewed and acted on my recommendations. We did not give everything away and leave Helen at risk to her family’s desire to pay for expenses nor did we assume any risks without a thorough discussion of those risks and careful hedging against the unavoidable risks. Helen was my client and she was protected throughout the entire plan.
The reason I bring this up now is to remind everyone about time. My work with Helen began approximately three years ago. Back in 2004, I completed the initial analysis for Helen’s family which was the foundation for evaluating asset protection and Title 19 eligibility strategies. A critical portion of that analysis was making a reasonable, realistic, and informed estimate for how the next three to five years would unfold in terms of health and finances. I am proud to say Helen and her family have been exceedingly pleased with results. As we approach the third anniversary of Helen’s planning, her goals have been accomplished and the critical three year look-back window (this was before the DRA of 2005) is going to close in the very near future. The plan was carefully thought out and it was successful. I helped Helen and her family protect over $900,000.
Let’s consider an alternative for a moment. What if Helen’s daughter mentioned her mother’s situation to me back in 2004 and I told her that since everything was fine right now they should not consider any additional planning until it became obviously necessary? Well, as you may know the Deficit Reduction Act of 2005 was enacted which extended the look-back period to five years. This change alone would have had a significant impact on Helen’s ability to achieve her goals. There were additional restrictions on Title 19 eligibility included in the Deficit Reduction Act of 2005 that would have also had adverse effects on Helen’s options.
It is an unfortunate fact that Connecticut nursing homes are expensive. They average over $9,000 per month. It is also an unfortunate fact that none of us know who is going to need nursing home care and who will not need nursing home care. For many people, nursing home costs are the single greatest threat to their life savings and their estate plan. An annual bill of more than $90,000 can devastate a modest family.
What’s the difference between protecting over $900,000 and risking over $900,000? As we can see, in many cases it is a matter of time and getting the right legal help. I don’t know when the next wave of regulations or case law that further restrict Title 19 Medicaid eligibility in Connecticut will come along and in general I don’t recommend my clients wait to find out either. I do know what I can do today to secure my client’s estate plan and life savings. Medicaid planning and protection does not happen overnight. In Helen’s case, it took three years; and she is in a much better position than if she waited until the last minute.
Do you have a plan?
Are you protected? Do you want to be in charge of what happens to you, or are you content to hope for the best? Find out more about the Connecticut Medicaid Asset Protection Trust estate plan.
Popularity: 44% [?]
Index Tags: alzheimer's, asset protection, connecticut medicaid, estate planning, medicaid eligibility, nursing home, title 19 medicaid
This is a very useful article for anyone interested in estate planing for their family! Thanks
Comment by Orange County Estate Planning — March 15, 2008 @ 7:59 pm