Questions. Everyone has questions. How much does this cost? If a passenger train left Chicago traveling at 100 mph, and a freight train left Los Angeles at 90 mph, where would the two trains meet? (The answers to these questions are readily available at our fingertips, via the Internet. (The above answers are: it depends on the item or service; it has to do with light rays and the atmosphere; and ask a math teacher. I never could figure these types of questions out in school.)
In our field of expertise, we receive our fair share of questions about estate and financial planning, what needs to be done for Medicaid, etc… Not a week passes without someone contacting our staff and seeking advice for themselves, a family member or a friend on one of these complicated subjects. Sometimes, the person is fortunate enough to be preplanning, making plans now to avoid problems, and has questions about protecting assets. But the overwhelming majority of calls involve a person in crisis mode (in the hospital and going to be placed into assisted living or a nursing home). He or she is frantic and needs immediate help. Even in these situations, it’s not too late to take action and protect assets. Remember: never prejudge your situation.
Here is a sample of some of the more commonly asked questions.
Why should my family hire a professional firm like your group? We can save money by doing the paperwork process ourselves.
We all want to save money; that’s a natural instinct. But applying for Medicaid isn’t the time to pinch pennies, even though you have the urge to. Are you familiar with a hedge maze, the labyrinth of living green walls that twist and turn in every direction? Imagine that maze being the Medicaid system but only worse. Without the property tools, you’d get confused and lost, but eventually may end up at your destination. The Medicaid process is a lot like that. Medicaid rules change regularly, and that’s information you, as a consumer, may not be aware of. But the professionals are. They continually attend training sessions, workshops and conferences to learn about changes and potential changes. And if there’s an area they aren’t that familiar with, through networking at workshops and conferences, chances are they know someone who can get the answer for them.
Professionals are well informed, and know the rule book cover-to-cover. You might think you know the path to approval but, chances are, you’re going to encounter unforeseen obstacles that you didn’t anticipate. This is where professional assistance pays off.
My brother-in-law in Texas told me about a loop hole he used in qualifying his family for Medicaid. Could I do the same for my mother in Ohio?
Sorry to disappoint you, but the short answer is, no. Medicaid is and always has been jointly funded by the state and federal governments; it’s been that way since it was introduced in 1965. However, each state has the responsibility of managing the program as it sees fit. Meaning, rules and regulations vary from state to state. There is the strong possibility of what worked in Texas may not work in Ohio or the 48 other states. Again, this is why it’s important to seek professional help, from people who deal with Medicaid on a daily basis and know the rules.
Dad/Grandma/Auntie gave us kids $10,000 each last year. Is there a problem with that?
Oh my goodness, yes! The IRS says a person can gift (give) away up to $14,000 a year to family members or charity (church fund-raisers, Salvation Army, etc…). But IRS rules and Medicaid rules are different. The gifting away of that much money would be considered an improper transfer, and the person applying for Medicaid would be penalized for an undetermined amount of time. Now if Grandma gives each of the three grandchildren $50 for Christmas, or $200 as a wedding gift, that’s perfectly fine. It’s the large amounts of money that raise the red flags and problems start.
Mom and Dad prepaid their funerals. Was that a good idea?
Not only was it a good idea, it was an excellent idea! Anyone who prepays his or her funeral is thinking ahead. First of all, that person didn’t want to burden the family with making decisions at such a sorrowful time, but he or she didn’t want the family to worry about finding the money to pay for the funeral. It’s already set aside! There are third-party insurance companies that specifically offer prepaid funeral trusts. The money is held by the company. When the time comes to need it, the company is contacted and the money is wired to the funeral home of your choice anywhere in the United States. Prepaid funeral trusts also help with Medicaid planning; it’s not considered a countable asset under Medicaid rules. If there is a lot of money involved in a pending Medicaid case, some states allow Mom and Dad to pay for their children’s funerals, and their spouses. So a lot of money can be properly moved off the table with prepaid funeral trusts.
Mom and Dad had Power of Attorney (POA) drawn up about 15 years ago, and have thought about getting it updated. What do you think?
Absolutely! Your parents should be congratulated for having a POA created. Now here’s an issue: documents drawn up 10 – 20 years ago probably don’t include Health Care and Financial POAs and other, newer provisions. If an older POA does have health care provisions, the language may be vague or not as strong as it could or should be. Twice a year, we’re reminded to check the batteries in smoke detectors. Similarly, we should do the same with all legal documentation. Take it out and review it, and see if it needs to be updated or changed. The attorney who created the documents will charge a nominal fee to update, but you know what? It’s in your best interest.
Here’s another reason why it’s good to update your legal documents. In this post 9/11 world, the financial and estate planning world has changed. Dealing with banking and other financial institutions has become stricter and legal documentation like a POA previously accepted by financial institutions (banks, stock brokers, and insurance companies) just a few years ago aren’t cutting it. These institutions are requiring specifically worded documents. Is it a pain? Yes, but it’s the world we live in today, and to get money or health or financial information, we need to abide by the new rules.
Is there anything wrong with visiting an assisted living facility or nursing home before my loved one goes there?
You’re within your right to visit. In fact, it’s recommended that you visit to see if the facility fits your family member’s physical and financial needs. Here’s something else to keep in mind: don’t assume all facilities accept Medicaid. Your Dad may be in the nursing home private-paying now but in six months or a year, may have to transition over to Medicaid. If Dad’s nursing home doesn’t take Medicaid, Dad might have to move to another facility. It’s good to know that information beforehand.
Is your head spinning yet? Feel like the proverbial deer in the headlights? Don’t worry, those are natural reactions. After reading this, you might realize you have encountered some of the same questions, but the answers are different, or not quite what you expected at all. Or Pandora ’s Box burst open with a multitude of questions you didn’t anticipate and still need to be asked, such as how much do Mom and Dad have in checking, is there other property involved like a condo in Gulf Shores, and what about stocks and bonds? You might ask, why are the professionals prying into sensitive areas? It’s not that we’re being nosy, but these are the same types of questions the Medicaid caseworkers are going to ask during the application process. And not having the correct answers at time of application could result in a delay.
Admitting that you don’t know or have an answer isn’t a sign of weakness. What did your grandmother tell you growing up: You’d never know the answer unless you ask, right? The same idea your wise, grey-haired grandma had still applies today to estate and financial planning and Medicaid planning. Ask those questions of the professionals. There is no such thing as a dumb question when it comes to Medicaid and estate planning.