6/9/2018 ESTATE Planning for the Special Needs of Disabled AdultS, and Elders Facing Long-Term Care Costs Caring for Caregivers November 15, 2016 Presented by Donald D. Vanarelli, Esq. _______________________________________ Recipient, Lifetime Achievement Award By New Jersey State Bar Ass’n, Elder and Disability Law Section Certified Elder Law Attorney Accredited Veterans Attorney Founding Member, Assn. of Special Needs Planners Named to the NJ “Super Lawyer” list for 10 yrs, 2007-2016

Asset Protection 6/9/2018 Long Term Care Long Term Care refers to the kind of care a person needs when he or she is unable to care for himself or herself due to disability, frailty or cognitive impairment. Long Term Care is sometimes called Custodial Care - assistance with activities of daily living (ADLs) - bathing, eating, dressing, toileting, continence and transferring - or supervision made necessary because of severe cognitive impairment.

The Cost of Long Term Care Asset Protection 6/9/2018 The Cost of Long Term Care Average cost of 24 hour Home Health Aides provided by an agency - $5,500 per month, or $66,000 per year. Range of costs charged by Assisted Living facilities - $5,500 - $7,500 per month, or $66,000 - $90,000 per year. Typical cost of Nursing Home care in New Jersey - $10,000 per month, or $120,000 per year.

Who Pays For Long Term Care? Asset Protection 6/9/2018 Who Pays For Long Term Care? 1. Private Pay 49% 2. Medicaid 44% 3. VA Benefits 4% 4. Medicare 2% 5. Long Term Care Insurance 1%

Overview of Government Sources for the Payment of Long Term Care Costs Asset Protection 6/9/2018 Overview of Government Sources for the Payment of Long Term Care Costs

Long Term Care Costs Covered by Medicare Asset Protection 6/9/2018 Long Term Care Costs Covered by Medicare 1. Home Health Care 2. Nursing Home Care

Medicare - Home Health Aides Asset Protection 6/9/2018 Medicare - Home Health Aides Covers up to 100 home visits per “spell of illness”. Preconditions to payment: prior hospital stay of at least 3 days and home health care initiated within 14 days of discharge. Beneficiary must be homebound and need skilled nursing care, physical or speech therapy, NOT custodial care.

Medicare Payment of Nursing Home Care Asset Protection 6/9/2018 Medicare Payment of Nursing Home Care Immediate prior hospital stay of 3 days Admitted to NH within 30 days of hospital discharge Covers skilled nursing care or rehabilitation only, NOT custodial care.

How Much Does NH Medicare Pay? Asset Protection 6/9/2018 How Much Does NH Medicare Pay? Maximum Coverage - 100 days Day 1-20 - Medicare pays 100% of covered charges Day 21-100 - Medicare pays all covered charges, except coinsurance amount. Year 2016 coinsurance payment = $161.00/day, or about $4,900/month Day 101 - on your own

Medicaid Joint Federal and State Program. Asset Protection 6/9/2018 Medicaid Joint Federal and State Program. Provides medical assistance for financially eligible persons who are aged, blind or disabled.

Asset Protection 6/9/2018 Income Limits Income - all income is counted in determining eligibility. Income cap - Medicaid programs have an income cap. In 2016, the cap is $2,199/month. Income above the cap must be transferred to a Qualified Income Trust each month.

Asset Protection 6/9/2018 Resource Limits Countable resources - all assets in the sole name of applicant, in the sole name of spouse, or in joint names, either with the spouse or another person. Includes pension and retirement assets of BOTH the applicant and spouse. Resource Limits - $2,000 for an individual and $3,000 for a couple. Excess resources - must be spent down.

Transfer of Resource Rules Asset Protection 6/9/2018 Transfer of Resource Rules To prevent gifting of assets, Medicaid imposes a “penalty period”, or period of ineligibility for Medicaid, for all gifts made within the “lookback period”.

Comparing Medicare and Medicaid Coverage for Long-Term Care Costs Asset Protection 6/9/2018 Comparing Medicare and Medicaid Coverage for Long-Term Care Costs Medicare: covers costs of home health aides and nursing homes for those who need skilled nursing care or therapy, but for a limited time only. No financial limits. Medicaid: covers home health aides, assisted living facilities and nursing homes, but only for the aged, blind and disabled who need custodial care and who meet strict financial limits.

Overview of Major VA Benefit Programs Asset Protection 6/9/2018 Overview of Major VA Benefit Programs Service-Connected Compensation Disability compensation is a monetary benefit for veterans who are disabled by an injury or disease that was incurred or aggravated during active service. Needs-Based Pension Pension is a monetary benefit for veterans who (1) are disabled (not service-connected) (2) have low income and resources, and (3) served during a period of wartime.

Basic Eligibility Criteria for VA Improved Pension Program Asset Protection Basic Eligibility Criteria for VA Improved Pension Program 6/9/2018 All of the following criteria must be met before a veteran or widow(er) of a veteran can receive Improved Pension benefits: a. The veteran must have served at least 90 days of active duty service, one day of which must have been during a wartime period; In general, wartime is: World War I World War II – Dec. 7, 1941 – Dec. 31, 1946 Korean War – June 27, 1950 – Jan. 31, 1955 Vietnam War – Aug. 5, 1964 – May 7, 1975 Gulf War – August 2, 1990 through date to be set

Basic Eligibility Criteria for VA Improved Pension Program (cont’d.) Asset Protection 6/9/2018 Basic Eligibility Criteria for VA Improved Pension Program (cont’d.) b. The veteran must have received a discharge other than dishonorable; c. The claimant must have limited income and assets; and, d. The claimant must be permanently and totally disabled, or be over age 65.

VA Improved Pension Program: Three Tiers of Benefits Asset Protection 6/9/2018 VA Improved Pension Program: Three Tiers of Benefits 1. Low Income Pension 2. Housebound Benefits Aid and Attendance Benefits Housebound benefits and Aid and Attendance benefits are supplements paid in addition to the basic Low Income Pension to certain veterans to cover the additional costs of care for their added disabilities.

Asset Protection 6/9/2018 Net Worth: Standard The VA considers the net worth of the individual seeking benefits, excluding the value of the person’s home, furnishings, and car. The standard as to whether a person will be eligible for benefits is whether the person has “sufficient means” to pay for his or her care. Assets that are counted toward the “sufficient means” analysis include bank accounts, certificates of deposit, money market accounts, investment accounts, annuities, retirement accounts, life insurance cash surrender values, etc.

Net Worth Test STANDARD: Sufficient Means to Self-Pay Asset Protection 6/9/2018 Net Worth Test STANDARD: Sufficient Means to Self-Pay Sufficient Means: A commonly used measure is $80,000 or less for a married couple, $50,000 or less for a single veteran. Age Analysis: Age vs. Asset test

VA Transfer of Resources Rules Asset Protection 6/9/2018 VA Transfer of Resources Rules No look-back period Compare Medicaid with VA Pension rules regarding transfers of resources. But, note difference in VA Nursing Home Rules.

Thank You For Your Attention Asset Protection 6/9/2018 Thank You For Your Attention Questions or Comments?