Why Seek Advice for ALTCS?

As life expectancies and long term care costs continue to rise, the challenge quickly becomes how to pay for these services. Many people cannot afford to pay $4,000 per month or more for the cost of a nursing home, and those who can pay may find their life savings wiped out in a matter of months, rather than years.

Fortunately, the ALTCS Program is there to help. In fact, in our lifetime, ALTCS has become the long term care insurance of the middle class. But the eligibility to receive ALTCS benefits requires that you pass certain tests on the amount of income and assets that you have. The reason for ALTCS planning is simple. First, you need to provide enough assets for the security of your loved ones. Second, the rules are extremely complicated and confusing. The result is that without planning and advice, many people spend more than they should and their family security is jeopardized.

Exempt Assets and Countable Assets: What Must Be Spent?

To qualify for ALTCS, applicants must pass some fairly strict tests on the amount of assets they can keep. To understand how ALTCS works, we first need to review what are known as exempt and non-exempt (or countable) assets. Exempt assets are those which Medicaid will not take into account (at least for the time being). In general, the following are primary exempt assets:

  • Home, no matter what its value. The home must be the principal place of residence. The nursing home resident may be required to show some “intent to return home” even if this never actually takes place.
  • Personal belongings and household goods
  • One car or truck
  • Burial spaces and certain related items for applicant and spouse
  • Up to $1,500 as a burial fund for applicant & spouse
  • Irrevocable prepaid funeral contract
  • Value of life insurance if face value is $1,500 or less. If it does exceed $1,500 in total face amount, then the cash value in these policies is countable.
  • Miller Trust (or Income Only Trust) – see our website for more information

All other assets are generally non-exempt, and are countable. Basically, all money and property, and any item that can be valued and turned into cash, is a countable asset unless it is one of those assets listed above as exempt. This includes:

  • Cash, savings, and checking accounts, credit union share and draft accounts
  • Certificates of deposit
  • Savings Bonds
  • Individual Retirement Accounts, (IRA), Keogh plans, (401K, 403B) (Exempt for the community spouse)
  • Nursing home accounts
  • Prepaid funeral contracts which can be canceled
  • Trust (depending on the terms of the trust)
  • Real estate (other than the residence)
  • More than one car
  • Boats or recreational vehicles
  • Stocks, bonds, or mutual funds
  • Land contracts or mortgages held on real estate sold

For assistance with qualifying for ALTCS please reach out to one of our specialists.

How To Pay For Nursing Home Care

One of the most difficult transitions people face is the change from independent living in their own home or apartment to living in a long term care facility or nursing home. There are many reasons why this transition is so difficult. One is the loss of a home…a home where the person lived for many years with a lifetime of memories. Another is the loss of independence. Still another is the loss of the level of privacy we enjoy at home, since nursing home living is often shared with a roommate.

Most people who make the decision to move to a nursing home do so during a time of great stress. Some have been hospitalized after a stroke, some have fallen and broken a hip, still others have progressive dementia, like Alzheimer’s disease, and can no longer be cared for in their own homes.

Whatever the reason, the spouse or relative who helps a person transition into a nursing home during a time of stress faces the immediate dilemma of how to find the right nursing home. The task is no small one, and a huge sigh of relief can be heard when the right home is found and the loved one is moved into the nursing home. For many, the most difficult task is just beginning; how to cope with nursing home bills that may total $2,500 to $6,000 per month or more?

One of the things that concerns people most about nursing home care is how to pay for that care. There are basically four ways that you can pay the cost of a nursing home:

  1. Long Term Care Insurance – If you are fortunate enough to have this type of coverage, it may go a long way toward paying the cost of the nursing home. Unfortunately, long term care insurance has only started to become popular in the last few years and most people facing a nursing home stay do not have this coverage.
  2. Pay with Your Own Funds – This is the method many people are required to use at first. Quite simply, it means paying for the cost of a nursing home out of your own pocket. Unfortunately, with nursing home bills averaging between $4,000 and $6,000 per month in our own area, few people can afford a long term stay in a nursing home.
  3. Medicare – This is the national health insurance program primarily for people 65 years of age and older, certain younger disabled people, or people with kidney failure. Medicare provides short term assistance with nursing home costs, but only if you meet the strict qualification rules.
  4. ALTCS (Arizona Long Term Care System) – This is a federal & state funded and state administered medical benefit program which can pay for the cost of the nursing home if certain asset and income tests are met.

If you are looking for assistance in qualifying for ALTCS please reach out to one of our specialists at Legal Awareness for Seniors.

 

Is An Annuity Right For Me?

What are the advantages and disadvantages of an annuity?

The very significant advantage of owning an annuity is peace of mind. The assurance that no matter how long you live, that check from the insurance company will arrive in the mailbox every month. This can alleviate a major source of stress for many seniors.

The main disadvantage is loss of liquidity. That’s why retirement planning experts recommend a diverse portfolio in which a portion is dedicated to an annuity, leaving the remaining funds available for emergencies and other types of investments.

Annuity critics say the products are too complex, and some annuities have fees and features that can drag down your interest earnings. That’s why it takes a commitment to shop around and ask the right questions. Talking with a professional can help answer your questions and assist in finding an annuity that is tailored to your needs.

How do I know an annuity is right for me?

Some questions to ask in determining if an annuity is right for you include: Am I in good health? Can I afford to remove some of my nest egg and put it into an annuity? What are my retirement goals? What is my risk tolerance?

Where does an annuity fit in my retirement plan?

Top financial planners recommend an annuity to address longevity risk and provide guaranteed income. The important part is to have a balanced retirement plan. Providing an income from an annuity enables you to take a little more risk with remaining money.

Many financial planners recommend rolling an IRA, or a percentage of it, into an annuity. In addition to providing income and longevity insurance, rolling into an annuity is a tax-free process.

ALTCS 5 Most Common Questions

1. Is ALTCS only for those who require to be in a skilled nursing facility in Arizona?
ALTCS (Arizona Long-Term Care System) provides a wide array of care for those that would like home care, adult day care, assisted living and more. So, even if you don’t need immediate skilled attention, you can apply to receive ALTCS to assist you.

2. Does the care you receive through ALTCS differ from the care you would receive if you paid privately?
Those that receive care through ALTCS receive the same wonderful care and medical treatment as they would if they paid for it out of their own pocket. Health care providers are legally required to give the same level of care to each patient no matter how it is paid for.

3. Are you allowed to keep your personal physician once you are on ALTCS?
ALTCS has a limited network of doctors that they work with. If you want ALTCS to pay for the doctor visits you will be required to see a doctor that is on their list. You may continue to see your doctor if they are out-of-network only if you pay for it yourself. But, don’t worry, case managers are available to assist you in finding the right doctor.

4. Are there any medical costs that ALTCS members must pay on their own?
Each person has different circumstances. Sometimes members are asked to pay a share of the cost while other members are fully covered. For example, a member living in Assisted Living may be required to pay for their room and board while ALTCS pays for the medical expenses. Most of the time members will learn what their share of the costs will be at the time of their qualification process.

5. If I have too many financial resources can I give them away in order to qualify for ALTCS?
No, you may not give them away. ALTCS looks back 5 years to see if you have gifted any of your resources. However, if you speak with one of our qualified ALTCS representatives we can help you to establish strategies in order to qualify for ALTCS without ‘spending down’ your resources.

What is Spend Down for ALTCS

When qualifying for ALTCS (Arizona Long Term Care System) otherwise known as Medicaid many applicants will come to learn the term “spend down”. If you have too many assets when you apply ALTCS will deny you. In order to qualify you will need to spend down your assets.

The assets you have cannot be given away, but they can be spent on certain exempt resources. ALTCS looks back five years to check for gifting. They want to assure that you are spending your money on your own needs and not the needs of family or friends.

Some of these qualifying exemptions are:

  • Funeral trust
  • House
  • Car
  • Personal items (clothing, medications, appliances, etc.)
  • Care needs
  • Legal fees, such as estate planning
  • Miller Trust (or Income Only Trusts)

There are means to avoiding spend down. You will want to be sure to get quality legal advice or speak to one of our knowledgeable estate planners to help assure ALTCS will accept you.

How To Start A Conversation With Your Elderly Parents

We love our parents and spend a lot of time with them, but do we really know them? Sometimes visiting your elderly parent can be difficult because you don’t know what to say. However, your parents are very knowledgeable and have lived a full life. Getting them to talk about what they know can be very entertaining and help your visit be more productive.

We have put together some questions to help you get started with learning more about your parents. You may even gain some new insight about your parents and maybe even learn a little something about yourself.

  1. Looking back on your life, what do you remember being one of your happiest moments?
  2. What is your earliest memory?
  3. Did you receive allowance when you were younger? Did you save it or spend it?
  4. What were your group of friends in high school like?
  5. Do you remember any fads from when you were younger? Clothing? Hairstyles?
  6. Do you have a lost love or “the one that got away”?
  7. Did you participate in any sports or clubs in high school or college?
  8. Did you enjoy school? What were your best and worst subjects you studied?
  9. What did you like to do for entertainment and fun?
  10. What are you most proud of?
  11. What world events had the most impact on your life and why?
  12. Who is the person you knew that influenced your life the most?
  13. Is there anything you have never told me, but wished that you would have?
  14. Is there anything you wish you would have asked your parents?
  15. What new technology do you find to be the most useful? What technology do find to be the most annoying?
  16. In what ways do you think I’m like you? What ways do you think I’m not like you?
  17. Do you wish anything would have been different between us?
  18. How did you meet/get engaged to my mom/dad?
  19. How would you like to be remembered?
  20. What are the most important lessons you learned in life?

Caring for Aging Parents with Your Siblings

Caring for an aging parent can be a struggle alone, but add in your siblings and things can get stressful. It is important to work together as a team to support your parent. You may each have a different idea of how your parent should be taken care of which can cause stress and tension. At the same time your parent is aware that they are relying more and more on their children and are probably not happy about it.

Caring for a parent is a shared responsibility. It is important, however, to assign a primary care provider. Consider who is the most dependable, has the most time to devote to their parents care, and who is emotionally prepared to fill this role. Once that is established you can decide what the other siblings roles will be and what they can provide.

It may be best to schedule a family meeting. Make sure everyone has time to discuss their feelings and how they see the care being handled. If you feel there will be contention it may be best to host the family meeting with a facilitator such as a social worker, family friend or other trusted person outside the family. To have a productive meeting try these guidelines:

  • Set an agenda for the meeting.
  • Focus on the now – try not to bring up issues from the past.
  • Share how you feel instead of accusing others (keep your sentences using ‘I’ instead of ‘you’).
  • Listen and respect what others are saying. Give everyone time to speak.
  • Find a way to come to a compromise. Everyone may not get their way, but at least you can all come to an understanding. Everyone may have to give a little.

If you find that anyone in particular doubts that their parent needs care have them spend a week or even a day with the parent to see a first hand view of the issues.

It is also important to have your parent draw up an Advanced Health Care Directive. They have an idea of who they want to make their major decisions and they should have a choice in the matter.

Creating A Trust for Your Spouse or Child With Special Needs

Preparing to leave your loved one an inheritance when they have special needs must be done with care. Most individuals that have some sort of ailment or impairment are usually on government assistance. Leaving them any sort of inheritance can disqualify them from continuing to receive that assistance.

There are ways to prevent the loss of this assistance. With a Miller Trust (also known as an Income Only Trust) you will rest assured that their Medicaid won’t be taken away from them.

Setting up this trust has a few steps:

  1. Have the Miller Trust prepared by an Estate Planner such as with Legal Awareness for Seniors. We will have the correct wording drawn up as to maintain any financial assistance they are currently on or will be receiving through any programs.
  2. Open a bank account in the name of the newly acquired trust. The tricky part is that when you open the account you cannot have an opening balance. Most banks will give you a hard time about this, but there are banks out there that are familiar with and will accommodate this request.
  3. Reach out to social security, pensions, and any other income resources your loved one is receiving. Have them deposit their funds directly into the newly set up bank account.

Once everything is set up the funds can be used towards your loved one. However, there are some stipulations. These funds cannot be used directly to purchase shelter, clothing, food or any of the services that the government benefits will normally provide. The funds are commonly used to pay for vacations, home furnishings, personal care attendance, education, recreation, vehicles, physical rehabilitation and so on.

The reason this type of trust works is because Medicaid (in Arizona it is called ALTCS) sees the income being received by the Trust and not the individual. To accurately set up this type of document and received guidance you will want to work closely with us at Legal Awareness for Seniors.

Dealing with Aging Parents

As our parents age we may find it difficult to deal with them. We can often find ourselves frustrated or angry with their stubbornness or forgetfulness. Often we forget that old age is a time of decline rather than personal growth and development. Our middle age lifestyle is completely different then theirs. With managing our children, work life and social life we are moving at a fast pace in order to be efficient to juggle everything we need to do. This is completely different than our aging parents who are winding down and have a lot of time on their hands.

Not only are we running at a different speed than our parents, we are also going through different emotions. As our parents age they are losing friends, freedoms, independence, memory and more causing them to cling on to what they have. Trying to understand where your parents are coming from may help you to be a bit more understanding.

Here are a few tips to assist you when dealing with your aging parents:

1. Understand that senior citizens often lose their short-term memory before their long-term memory. Something you told them last week may easily have been forgotten. If it is something important that they need to remember you can write notes around the house. Add a smiley face to them in order to keep the tone light.

2. Many seniors are dealing with aches and pains. If it takes them a little longer to do things, such as tie their shoe, be patient or offer to assist them.

3. You may not be able to visit them every day, but instead of dropping by 5 minutes here or there, set aside a substantial amount of time every week to spend with them. Maybe schedule Friday lunches or Sunday strolls.

4. Often in conversations with aging parents the topics can seem erratic. One minute you may be talking about your craft project with the kids and the next they are talking about how their light bulb is out in their bedroom. Be sure to listen to what they are saying. If your story is really important to you find a way to guide the conversation back, if not, listen to the story behind their story. What is it that they really need?

5. Be patient with them when teaching them new technology. You may have already gone over how to use their remote control and on each visit they ask you to go over it with them again. It is hard for the elderly to learn new things and remember what they learned. Just patiently go over it with them again.

6. Plan for the worst, but hope for the best. Be sure to take time to plan for your parents passing. Setting up a living trust, power of attorney, and other ancillary documents are very important with an aging parent. Let Legal Awareness for Seniors assist you with this process.

Creating A Trust With A Blended Family

With divorce becoming more prevalent so are remarriages with blended families. Finding a way to create a trust with a blended family must be handled delicately. It is important that you and your new spouse discuss what you would like to have happen when you each pass away. Relying on your spouse and children to work it out is not a plan. We have gathered some tips to help guide you along your journey.

1. Make A List. Each of you should create a list of what you would like to leave to each of your children. Look at each others list in order to discuss and compromise. You may want to list items as “yours,” “mine,” and “ours” to help divide the assets appropriately between the spouse and each of the children. Many times having an Estate Planner present to review your lists together can help alleviate arguments.

2. Create A Trust. If you are lucky enough to agree on how assets will be distributed you can create a trust together. You may create a testamentary trust that becomes irrevocable upon the death of the first spouse in order to protect your children. Or you may create separate trusts so that if the wife passes first her estate will be divided among her children and current husband and same for the husband.

3. Use Life Insurance. A common practice to assure your children will receive something at the time of your passing is to name them as beneficiaries to a life insurance policy. This will give your children some definite financial security at the time of your death.

4. Prenuptial or Post-Marital Agreements. Couples usually have an easier time figuring out these things ahead of time. Knowing what assets will go to who can ease your mind throughout your marriage.

5. Update your accounts. When you re-marry you may want to look over all your assets and ensure that they are properly adjusted. You don’t want to inadvertently leave property or an account to your ex because you didn’t update your accounts.

6. Change Your Beneficiaries. This is another situation that can easily be overlooked. You may want to leave an IRA to your new spouse, but never updated it from your ex’s name. It is important to review your beneficiaries every three years or so. However, if you are ordered by the court to leave the account to your ex than you must follow those court orders.

Each family is different and requires individual planning. Our Estate Planners have helped many couples resolve issues and set up a trust that pleases everyone.