alzheimer's association presentation 2012
TRANSCRIPT
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ESTATE PLANNING, VETERANS BENEFITS, MEDICARE, AND MEDICAID: HELPING A LOVED ONE WITH ALZHEIMER’S
P. Haans Mulder, JD, MST, CFP®
Cunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) [email protected]
Alzheimer's Association-West Michigan
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Background• Partner at Cunningham Dalman, P.C.• Has a Masters in Tax, CFP®, and
specialize in estates/elder law and business planning
Serving the Holland area since 1900
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Overview• Elements of an estate plan and what the
process involves• Most common types of estate plans• Veteran’s Aid & Attendance benefits and
eligibility rules
Serving the Holland area since 1900
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Overview• Medicare Parts A-D• Transition from Medicare to Medicaid• Medicaid process and eligibility rules• Example of how Medicaid planning works
Serving the Holland area since 1900
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What is estate planning?• Process of planning for the future
management and distribution of your assets and your future medical care
• Includes documents such as wills, trusts, and powers of attorney (financial and health care)
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Why is it important?• Reduces the cost of administration• Minimizes stress for family and friends• Determines who will receive your assets• Authorizes who will make your medical
decisions
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What is probate?• Probate is a court process to administer
a deceased person’s financial affairs• Required when someone passes away
with assets in his or her own name or fails to name a beneficiary
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Why avoid probate?• It is a public process • Can exacerbate family situations• Can be costly to administer ($5,000)• Takes time to complete (6-9 months)
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What are the most common estate plans?
• Basic plan includes wills (potentially with a trust) and powers of attorney
• For clients who do not have a house or are not concerned with avoiding probate
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What are the most common estate plans?
• More comprehensive plan includes a living trust, pour-over wills, and powers of attorney
• Designed for clients who want to avoid probate
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Veteran’s A&A Benefit• Veteran is eligible for up to $1,704 per
month (expenses must exceed income)• Surviving spouse is eligible for up to
$1,094 per month • Veteran with a spouse is eligible for up to
$2,020 per month
Serving the Holland area since 1900
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Veteran’s A&A Benefit• Will cover in-home, assisted living, and
nursing home care• Can either have low monthly income or
medical expenses that exceed income• Must have not more than $80,000 of
countable assets
Serving the Holland area since 1900
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Medicare and Medicaid• 40% of people 65 years and older will
stay in a nursing home• Average cost to stay in a local nursing
home is $7,500-9,000/month
Serving the Holland area since 1900
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Medicare and Parts A-D• Medicare is a government insurance
program that has many aspects and is divided into parts
• Have to be 65 years old, be disabled, or fit specific criteria
• Part A covers hospital expenses
Serving the Holland area since 1900
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Medicare Parts A-D• Part B deals with doctor’s and out-
patient expenses• Part C is a private insurance plan that
covers your medical expense in general• Part D is your prescription drug coverage
Serving the Holland area since 1900
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Transition to Medicaid• Many people who are eventually
approved for Medicaid start on Medicare• Must have a three day hospital stay • Medicare will cover up to 100 days, but
there can be a co-pay after the 20th day
Serving the Holland area since 1900
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What is Medicaid?• State and federal program that pays
for medical treatment (including nursing home care)
• Oftentimes confused with Medicare
Serving the Holland area since 1900
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When does Medicaid apply?• Applies principally in a nursing home
(could apply in your home or an assisted living facility)
• Applies to people who are 65 years or older, blind, or disabled
• Must pass the income and asset tests
Serving the Holland area since 1900
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Who does Medicaid apply to?
• Under income test, you cannot have enough income to pay the monthly cost of staying in a nursing home ($7,500-9,000 in this area)
Serving the Holland area since 1900
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Who does Medicaid apply to?
• Under assets test, a single person can only have $2,000 in countable assets
• Can keep your home (if it’s not in your trust) and a vehicle
• All other assets are countable
Serving the Holland area since 1900
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Who does Medicaid apply to?
• Asset test allows a married couple to keep their home (again, if it’s not in a trust), a vehicle, and one-half of their other assets
Serving the Holland area since 1900
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Example• Clients were husband and wife• Wife had to go to a nursing home• Didn’t stay in a hospital for three days
so Medicare didn’t cover stay• Had house, vehicle, and investments
Serving the Holland area since 1900
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Example• Could keep the house (because it was
properly owned) and their vehicle• Without any Medicaid planning, they
would have had to spend down one-half of their investments
Serving the Holland area since 1900
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Example• Drafted a trust that allowed them to
protect all of their investments (as opposed to just half)
• This provided peace of mind to the husband
Serving the Holland area since 1900
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Questions……
Serving the Holland area since 1900
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Thank YouP. Haans Mulder, JD, MST, CFP®
Cunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) [email protected]
Serving the Holland area since 1900