EstatePlanningToolkit:
ProtectingandPreparingfortheFutureTheEssentialsforYouandYourAgingLovedOnes
P.O.Box739•Forest,VA24551•1-800-526-8673•www.AACC.net
EstatePlanningToolkit
LightUniversity2
WelcometoLightUniversityandthe“EstatePlanningToolkit”programofstudy. Our prayer is that you will be blessed by your studies and increase your effectiveness inreaching out to others. We believe you will find this program to be academically sound,clinicallyexcellentandbiblically-based.Our faculty represents some of the best in their field – including professors, counselors andministers who provide students with current, practical instruction relevant to the needs oftoday’sgenerations.We have alsoworked hard to provide youwith a program that is convenient and flexible –givingyoutheadvantageof“classroominstruction”onlineandallowingyoutocompleteyourtrainingonyourowntimeandscheduleinthecomfortofyourhomeoroffice.Thetestmaterialcanbefoundatwww.lightuniversity.comandmaybetakenopenbook.Onceyouhavesuccessfullycompletedthetest,whichcoverstheunitswithinthiscourse,youwillbeawardedacertificateofcompletionsignifyingyouhavecompletedthisprogramofstudy.Thank you for your interest in this program of study. Our prayer is that you will grow inknowledge,discernment,andpeople-skillsthroughoutthiscourseofstudy.Sincerely,
RonHawkinsDean,LightUniversity
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TheAmericanAssociationofChristianCounselors
• Represents the largestorganizedmembership (nearly50,000)ofChristian counselorsandcaregiversintheworld,havingjustcelebratedits25thanniversaryin2011.
• Known for its top-tier publications (Christian Counseling Today, the Christian CounselingConnectionandChristianCoachingToday),professionalcredentialingopportunitiesofferedthroughtheInternationalBoardofChristianCare(IBCC),excellenceinChristiancounselingeducation, an arrayof broad-based conferences and live training events, radioprograms,regulatoryandadvocacyeffortsonbehalfofChristianprofessionals,apeer-reviewedEthicsCode, and collaborative partnerships such as Compassion International, the NationalHispanic Christian Leadership Conference and Care Net (to name a few), the AACC hasbecomethefaceofChristiancounselingtoday.
• With the needed vision and practical support necessary, the AACC helped launch the
International Christian Coaching Association (ICCA) in 2011, which now represents thelargest Christian life coaching organization in the world with over 2,000 members andgrowing.
OurMission
The AACC is committed to assisting Christian counselors, the entire “community of care,”licensedprofessionals,pastors,and laychurchmemberswith littleorno formal training. It isourintentiontoequipclinical,pastoral,andlaycaregiverswithbiblicaltruthandpsychosocialinsights that minister to hurting persons and helps them move to personal wholeness,interpersonalcompetence,mentalstability,andspiritualmaturity.
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OurVision
TheAACC’svisionhastwocriticaldimensions:First,wedesiretoservetheworldwideChristianChurch by helping foster maturity in Christ. Secondly, we aim to serve, educate, and equip1,000,000 professional clinicians, pastoral counselors, and lay helpers throughout the nextdecade.WearecommittedtohelpingtheChurchequipGod’speopletoloveandcareforoneanother.We recognize Christian counseling as a unique form of Christian discipleship, assisting thechurch in its call to bring believers to maturity in the lifelong process of sanctification—ofgrowingtomaturityinChristandexperiencingabundantlife.Werecognizesomearegiftedtodosointhecontextofaclinical,professionaland/orpastoralmanner.Wealsobelieveselected laypeoplearecalledtocareforothersandthattheyneedtheappropriatetrainingandmentoringtodoso.WebelievetheroleofthehelpingministryintheChurchmustbesupportedbythreestrongcords:thepastor,thelayhelper,andtheclinicalprofessional.ItistothesethreerolesthattheAACCisdedicatedtoserve(Ephesians4:11-13).
OurCoreValues
InthenameofChrist,theAmericanAssociationofChristianCounselorsabidesbythefollowingvalues:
VALUE1:OURSOURCEWearecommittedtohonorJesusChristandglorifyGod,remainingflexibleandresponsivetotheHolySpiritinallthatHehascalledustobeanddo.VALUE2:OURSTRENGTHWearecommittedtobiblicaltruths,andtoclinicalexcellenceandunityinthedeliveryofallourresources,services,trainingandbenefits.VALUE3:OURSERVICEWeare committed toeffectivelyandcompetently serve thecommunityof careworldwide—bothourmembership and the churchat large—withexcellenceand timeliness, andbyover-deliveryonourpromises.VALUE4:OURSTAFFWearecommittedtovalueandinvestinourpeopleaspartnersinourmissiontohelpotherseffectivelyprovideChrist-centeredcounselingandsoulcareforhurtingpeople.VALUE5:OURSTEWARDSHIPWe are committed to profitably steward the resourcesGod gives to us in order to continueservingtheneedsofhurtingpeople.
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LightUniversity• Establishedin1999undertheleadershipofDr.TimClinton—hasnowseennearly200,000
students from around the world (including lay caregivers, pastors and chaplains, crisisresponders,lifecoaches,andlicensedmentalhealthpractitioners)enrollincoursesthataredelivered via multiple formats (live conference and webinar presentations, video-basedcertificationtraining,andastate-of-theartonlinedistanceteachingplatform).
• Thesepresentations,courses,andcertificateanddiplomaprograms,offeroneofthemostcomprehensive orientations to Christian counseling anywhere. The strength of LightUniversity is partially determined by its world-class faculty—over 150 of the leadingChristianeducators,authors,mentalhealthcliniciansandlifecoachingexpertsintheUnitedStates. This core groupof facultymembers represents a literal “Who’sWho” inChristiancounseling. No other university in the world has pulled together such a diverse andcomprehensivegroupofprofessionals.
• Educational and training materials cover over 40 relevant core areas in Christian—
counseling, lifecoaching,mediation,andcrisis response—equippingcompetentcaregiversand ministry leaders who are making a difference in their churches, communities, andorganizations.
OurMissionStatement
TotrainonemillionBiblicalCounselors,ChristianLifeCoaches,andChristianCrisisRespondersbyeducating,equipping,andservingtoday’sChristianleaders.
AcademicallySound•ClinicallyExcellent•DistinctivelyChristian
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Video-basedCurriculum
• UtilizesDVDpresentations that incorporateover 150 of the leading Christian educators,authors,mentalhealthclinicians,andlifecoachingexpertsintheUnitedStates.
• Eachpresentationisapproximately50-60minutesinlengthandmostareaccompaniedbyacorrespondingtext(inoutlineformat)anda10-questionexaminationtomeasurelearningoutcomes.Therearenearly1,000uniquepresentationsthatareavailableandorganizedinvariouscourseofferings.
• Learning is self-directed and pacing is determined according to the individual time
parameters/scheduleofeachparticipant.• With the successful completion of each program course, participants receive an official
Certificate of Completion. In addition to the normal Certificate of Completion that eachparticipant receives, Regular and Advanced Diplomas in Biblical Counseling are alsoavailable.
Ø TheRegularDiploma isawardedbytakingCaringForPeopleGod’sWay,BreakingFreeandoneadditionalElectiveamongtheavailableCoreCourses.
Ø TheAdvancedDiplomaisawardedbytakingCaringForPeopleGod’sWay,BreakingFree,andanythreeElectivesamongtheavailableCoreCourses.
Credentialing
• LightUniversitycourses,programs,certificatesanddiplomasarerecognizedandendorsedbytheInternationalBoardofChristianCare(IBCC)anditsthreeaffiliateBoards:theBoardofChristianProfessional&PastoralCounselors(BCPPC);theBoardofChristianLifeCoaching(BCLC);andtheBoardofChristianCrisis&TraumaResponse(BCCTR).
• Credentialing is a separateprocess from certificate or diploma completion.However, theIBCC accepts Light University and Light University Online programs as meeting theacademic requirements for credentialing purposes. Graduates are eligible to apply forcredentialinginmostcases.
Ø Credentialinginvolvesanapplication,attestation,andpersonalreferences.
Ø CredentialrenewalsincludeContinuingEducationrequirements,re-attestation,andoccureitherannuallyorbienniallydependingonthespecificBoard.
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OnlineTesting
TheURLfortakingallquizzesforthiscourseis:http://www.lightuniversity.com/my-account/.
• TOLOGINTOYOURACCOUNT
Ø You should have received an email upon checkout that included your username,password,andalinktologintoyouraccountonline.
• MYDASHBOARDPAGE
Ø Once registered, youwill see theMyDVD Course Dashboard link by placing yourmousepointerovertheMyAccountmenuinthetopbarofthewebsite.Thispagewill include studentPROFILE informationand theREGISTEREDCOURSES forwhichyouareregistered.TheLOG-OUTandMYDASHBOARDtabswillbeinthetoprightofeachscreen.Clickingonthe>nexttothecoursewilltakeyoutothecoursepagecontainingthequizzes.
• QUIZZES
Ø Simplyclickonthefirstquiztobegin.• PRINTCERTIFICATE
Afterallquizzesaresuccessfullycompleted,a“PrintYourCertificate”buttonwillappearnearthetopofthecoursepage.YouwillnowbeabletoprintoutaCertificateofCompletion.Yournameandthecourseinformationarepre-populated.ContinuingEducationThe AACC is approved by the American Psychological Association (APA) to offer continuingeducationforpsychologists.TheAACCisaco-sponsorofthistrainingcurriculumandaNationalBoard of Certified Counselors (NBCC)ApprovedContinuing Education Provider (ACEPTM). TheAACC may award NBCC approved clock hours for events or programs that meet NBCCrequirements.TheAACCmaintainsresponsibilityforthecontentofthistrainingcurriculum.TheAACCalsoofferscontinuingeducationcreditforplaytherapiststhroughtheAssociationforPlayTherapy (APT Approved Provider #14-373), so long as the training element is specificallyapplicabletothepracticeofplaytherapy.It remains the responsibility of each individual to be aware of his/her state licensure andContinuing Education requirements. A letter certifying participation will be mailed to thoseindividuals who submit a Continuing Education request and have successfully completed allcourserequirements.
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Presenterfor
EstatePlanningToolkit:
ProtectingandPreparingfortheFutureTheEssentialsforYouandYourAgingLovedOnes
EstatePlanningToolkit
LightUniversity9
PresenterBiography
Stephen D. Lentz, J.D., Esq., is a graduate of Marshall-Wythe School of Law,College ofWilliam andMary inWilliamsburg, Virginia. Mr. Lentz has extensivenationaland internationalbusinessandmarketingexperienceandworkscloselywith faith-based clients, local churches and ministry organizations. He is thefounder and senior partner of Stephen D. Lentz & Associates, PLC in VirginiaBeach,Virginiaandservesavarietyofclientsworldwide.Heservesasanadjunctprofessor at Regent University School of Business, Regent University School ofCommunications and Regent University School of Law, where he is currentlyteachingWills,Trusts,andEstates.In2007and2008,Mr.Lentzwasawardedthecoveted“AdjunctProfessoroftheYear”bytheStudentBarAssociation.Visithiswebsiteatwww.lentz-law.com.
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EstatePlanningToolkitTableofContents
FinancialIssuesoftheAging:EstatePlanningBasics.................................................................11
LegalandMedicalDirectives:Long-termCare...........................................................................20
NavigatingtheSystem:Medicare,Medigap,andMedicaid.......................................................30
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ESPT–01
FinancialIssuesoftheAging
EstatePlanningBasicsfortheElderly
StephenD.Lentz,J.D.,Esq.
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AbstractTheAmericanelderlyarefacedwiththeissuesofhealthcare,assetpreservation,Medicaidand
Medicareeligibility,retirement,andcompetency.Thenumberofelderlywithinthepopulation
is increasingly growing and this impacts every area of society. This session discusses the
importance of estate planning and the six basic ways to conceptualize your estate needs:
havingawill,doingnothing,usingjointownership,makinggifts,usingbeneficiarytransfers,and
havingalivingtrust.Throughthislesson,onewilllearntheimportanceofplanningasopposed
toreacting.
LearningObjectives
1. ParticipantswillbeabletoarticulatetheissuesofestateplanningusingthefieldofElder
Law.
2. Participantswillexplorethewiderangeofissuesfacingtheelderlyandtheimportance
ofestateplanningatanyage.
3. Participantswillidentifythesixbasicwaystoplantheirestateandtheprosandconsof
each.
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I. TheAmericanElderly
A. GrowingNumbers
1. AtthebeginningoftheMillennium(2000),45.8millionpeoplewere60+.
2. By 2030, it is estimated that therewill be 92.2million people inAmerica over 60
yearsold.
3. Thisimpactseveryareaofoursociety.
4. It’sadilemmaforthegenerationofchildrenwhoaredealingwiththeirparentsand
thoseapproachingretirementbecausetheyarequestioningwhattheyaresupposed
todo.
B. TheFieldofElderLaw
1. Thereareawiderangeofissuesfacingtheelderly:
• Healthcare
• Assetpreservation
• MedicaidandMedicareeligibility
• Retirement
• Competency
2. Competencyisamajorissueconcerningstatedocuments.
• Dotheyknowtheimportanceofwhattheyaredoing?
• Cantheyactuallysignthedocument?
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II. EstatePlanningandtheElderly
A. Planning
1. Properplanningatanyageisessentialtoensureassetsaredistributedcorrectly.
2. Without planning, assets will fall into Intestate Succession: the state will decide
whereyourassetswillgo.
3. Thereisnomoreimportantplanningmomentthandealingwithelderlyclients!
B. SuccessionPlanning:MoreVitalThanEver
1. Thereisavarietyofestateplanningoptionsavailable:
• IntestateSuccession
• Jointtitling
• Doityourself…“HolographicWills”(handwritten)
• Gifting
• RevocableLivingTrusts
2. EstatePlanningisimportantbecause:
• Afterdeath,onecancontrolwhoreceivesassetsratherthanthestate
• Onewillpayminimumfeesandtaxesbyhavingaplanasopposedtothereactive
part.
• At incapacity, one can control assets or identify thosewhowillmakemedical
decisions.
C. WhoNeedsEstatePlanning?
1. Everyonewhoisanadultneedsanestateplanincluding:
• Singleadults
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• Familieswithyoungchildren
• TheElderly
2. Again,thisdetermineswhoone’sassetsgoto,whowilltakeofthechildren,aswell
as setting up children for success by determining when they will take their
inheritance.
D. WhenShouldYouPlan?
1. Thebesttimetoplanyourestateisnow,whileyoucanandbeforeyouneedit.
2. Withestateplanning,thereisnosecondchance.
III. PlanningyourEstate
A. CommonEstatePlans
1. Commonestateplansinclude:
• Donothing
• Givingawayassets
• Usingjointownership
• Havingawill
• Usingbeneficiarytransfers
• Havingalivingtrust
2. Thesecomponentscontributetothedecisiontohaveawill:
• Awillexpressesyourwishes.
• Willsonlycontrolassettitledinone’sname.
• AwillisenforcedbyProbateCourt.
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B. Probate
1. Probateisalegalprocesswhere:
• Thewillisvalidated.
• Debtsarepaid.
• Assetsaredistributedaccordingtothewill.
2. The only legalway to change a title on an asset iswhen the person listed as the
ownercannotsignhisorhername.
3. TheaveragetimeforprobateinUnitedStatestodayisabout9monthsto2years.
4. Probateiscostly.
• $100K estate in Florida was costing $2,000 and $5,000 in New York and
Pennsylvania.
• $600K estate average cost of probate was $9,000 in Texas and Virginia and
$22,000inNewYorkandPennsylvania.
• Thesedidnotincludeexecutorfees.
5. Probateispublic.
• Anyinterestedpartycanseewhatyouowned.
• Theprocessmakesthewilleasytocontest.
• Exposesyourfamilytounscrupuloussolicitors.
C. WillsandIncapacity
1. Awillisa“deathdocument.”
2. Willsdonotspeaktoincapacityordisability.
3. Willsonlygointoeffectafteryoudie.
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D. RevocableLivingTrust
1. Revocablelivingtrustsarenotnew.
• Theyhavebeenusedforhundredsofyearsjustlikewills.
• Bothawillandarevocablelivingtrustnamesomeonetohandlefinalaffairs(an
Executor).
• Bothawillandarevocablelivingtrustnamewhoyouwanttoreceiveassets.
2. Revocablelivingtrustsavoidprobate.
3. Theword“revocable”meansthatitischangeable.
E. FourTitles
1. Thegrantor(you)àcreatesandcontrolstrust.
2. Thetrusteeàmanagesassetsplacedinthetrust.
3. Firstbeneficiaryàallassetsbelongtoyou.
4. Thecontingentbeneficiariesàreceiveassetswhenyoudie.
F. CompanionDocuments
1. Therearemorecomponentstoastateplanthaneitheratrustorawill.
2. Trustsarelifedocumentsasopposedtoawill,whichisadeathdocument.
3. Therearefourcomponentstoagoodestateplan:
• Documents
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• Pour-overwill
• DurableGeneralPowerofAttorney
• LivingWillorAdvancedMedicalDirective
G. DurableGeneralPowerofAttorney
1. ADurableGeneralPowerofAttorney isalegalinstrumentthatisdrawnupbyan
attorney.
• DonotusetheInternet.
• PowerofAttorneyneedstomakesurethatthepowersarebroadenoughtotake
careofalloftheaffairsoftheperson.
• Anon-disclosureclauseneedstobeincluded.
• This clause states that if sued, the Power of Attorney cannot be used to get
evidencefortrial.
2. ThebenefitsofaPowerofAttorneyinclude:
• Givesyouragentthepowertomakedecisions.
• Givesyouragenttheabilitytosignlegaldocuments.
• If incapacity, disability, or incompetence is present, thepowerof attorneywill
havethedecision-makingauthority.
• Power of Attorney is a valuable tool to avoid costly and embarrassing public
appointments.
IV. LivingWillorAdvancedMedicalDirective
A. ForMedicalDecisions
1. AnAdvanceMedicalDirectiveisimportantinmedicaldecisions.
• Cananswer thevitalquestion that if youare terminal,death is imminent, and
thereisnohopeofrecovery,“Doyouwanttobeartificiallykeptalive?”
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• Givesthepowertotheagent(usuallyaspouse,child,ortrustedfamilymember)
to be able to go ahead andmake the decisionwhen one is terminal, death is
imminent,andthereisnohopeforrecovery.
2. AformoftheAdvancedMedicalDirectivemaybegiventhroughthehospital.
• PartA:Doyouwanttobeartificiallykeptalive?
• Doyouwanttoberesuscitatedornot?
3. TheimportantpartofalegallydraftedAdvancedMedicalDirectiveisPartB.
• PartBstateswhotheappointedagentisandgivesthatpersonmedicalPowers
ofAttorneythatallowshim/hertoverifywhethertheperson is inthatspecific
spotofbeingterminal,deathisimminent,andthereisnohopeofrecovery.
B. Planning
1. Planningissuperiortoreacting!
2. Make sure to send your clients to an estate-planning practitioner, not a general
practitionerwhodoesnotspecializeintheseareas.
3. HavingaRevocableLivingTrustisthefarsuperiorwaytotransferassetsseamlessly,
without interruption, minimize probate length of time and cost, and be able to
privatelypassthingsontolovedones.
V. Resource:
www.lentz-law.com
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ESPT–02
LegalandMedicalDirectivesLong-TermCare
StephenD.Lentz,J.D.,Esq.
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Abstract
Thestudyoflong-termcarecoversmedical,social,personal,supportiveandspecializedservices
requiredby individualswhohave lost someability tocare for themselvesdue todisabilityor
illness. This session introduces the components of long-term care and the importance of
planningaheadsothatindividualsmaymaintainanoptimumlevelofindependence.
LearningObjectives
1. ParticipantswillbeabletoarticulatethefeaturesofLong-TermCareintoday’ssociety.
2. Participantswillexplore the twovarious typesofLong-TermCareandunderstand the
riskofthem.
3. Participantswill identifyhow the currentHealthCareAct affects Long-TermCareand
knowthechangesthataretakingplace.
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I. Long-TermCare
A. TheStudyofLong-TermCare
1. Thestudyoftheneedforlong-termcare(LTC)encompassesawidearrayofmedical,
social, personal, supportive and specialized services required by individuals who
have lost somecapacity for self-carebecauseofadisablingconditionora chronic
illness.
2. Thereisnoneedforfearoranxiety.
3. Itisjustaproblemrequiringasolution.
“Planningisfarsuperiortoreacting!”
B. AspectsofLong-TermCare
1. The primary goal of LTC is to maintain a patient’s maximum functional
independence.
2. Thegoalisnotto“cureanillness,”buttoallowtheindividualtoattainandmaintain
anoptimalleveloffunctioning.
3. LTC pertains to theorganization, financing, and delivery ofMedical and Human
Servicestopeopleinneed.
C. SettingsforLong-TermCare
1. LTCcantakeplaceinavarietyofsettings,including:
• Anindividual’shome
• Atsitesinthecommunity
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• InanAssistedLivingFacility(ALF)
• InaSkilledNursingFacility(SNF)
2. Theprimarygoalistoenablethepersonswhoprefertoremainintheirhomestobe
abletodosoandtomaintaintheirindependenceaslongaspossible.
3. Therearetwotypesoflong-termcare:
• MedicalLong-TermCare
• NonmedicalCare
D. MedicalLong-TermCare
1. Medical long-term care is “chronic care”with the aimofmanagement, control of
symptoms,andmaintenanceoffunction.
2. Medicallong-termcareincludes:
• Falls,fractures,andinjuries
• Pulmonaryandcardiovasculardisorders
• Psychiatricdisorders
• Kidneyandlivermalfunction
• Prescriptiondrugtreatment
• Labwork
• Surgeries
E. NonmedicalCare
1. Manyindividualsrequiringlong-termcarearenotill.
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2. LTConthe“nonmedicalfront”ismorelikecustodialcare,designedtoassistpeople
withsupportservicesfordailytaskssuchas:
• Bathing
• Grooming
• Eating
• Dressing
• “Private/intimate”activities:personalhygiene,dressing,andtoileting
3. ActivitiesofDailyLiving(ADLs)aredailyactivitiessuchasgettingintooroutofbed,
showering,anddressing,eating,andthebasicsofself-care.
4. PrivateinsuranceandMedicaidrelyonADLmeasuresas“triggers”forbenefits.
5. Typicallyapersonwillneed2outof6ADLsthatrequireassistanceinordertotrigger
benefitsforLTC.
• Bathing
• Maintainingcontinence
• Eating
• Toileting
• Dressing
• Transferring(gettingoutofbedorachair)
6. ResidentsinLTCfacilitiesneedhelpwithanaverageoffourADLs.
7. Residentsinhomesneedhelpwith2.5ADLs.
II. Long-TermCareRisksandStatistics
A. Whoisatrisk?1
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1. Theriskofneedinglong-termcareincreaseswithage.
• 40%ofthosewhoneedLTCare40yearsoryounger.
2. Atyoungerages,congenitaldefectsandaccidentsaretheprimarycause.
3. Duringthemiddleages(45-55),congenitaldiseasescontributetotherisk.
4. After age 70, multiple health conditions and frailty combine with congenital
diseases.
B. OtherFactsandStatistics
1. Morethan6millionelderlyAmericansneedassistancefromfamilyorfriendsifthey
aretoliveathome.2
2. At least 2/3 of all home-care assistance is provided free by family members and
friends.3
3. Bytheyear2020,1outof6Americanswillbe65orolder.4
4. Ofthepeopleturning65,69%willneedsomelong-termcarebeforetheydie.5
5. More than half of the U.S. population will require some type of LTC during their
lives.6
6. Theaveragenursinghomestayisapproximately2.5years.7
• However,thereisa5-yearlookbackasfarasfundsthathavetransferredoutof
thatperson’sestatetotryandqualifythemiftheyaregoingtohaveitpaidby
Medicaid
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7. After2021,thepopulationinnursinghomesisexpectedtoincreasesubstantiallyto
3outof4millionresidents(thisistheyeartheoldestbabyboomerswillturn75).8
III. TheCostofLTC
A. Services
1. ServicesassociatedwithLTCarethemostexpensivehealth-carecostsever.
2. Costfactorsinclude:
• Locationofcare(regionalcosts)
• Typeofproviderwhoadministerscare
• Lengthofcare
3. Theaverageburnrateinaskillednursinghomecanbe$6,000-$10,000permonth).
• Community-BasedServices…Low
• HomeHealthCare…LowtoHigh
• BoardandCareRooms…LowtoHigh
• AssistedLiving…MediumtoHigh
• ContinuingCareRetirementCommunities…High
• SkilledNursingHomes…High
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IV. LevelsofLTC
A. CustodialCare
1. ThepurposeofcustodialcareistoprovideassistancewithADLs.
• Aimedatmeetingpersonalneeds(asopposedtomedicalneeds).
• Performedinthehomebyfamilyandfriends.
• Performedin“residencefacility,”unlicensedindividualsorlicensedhealthaides.
• “Resthomes”…”nursinghomes.”
2. MajorityofLTCpatientsreceive“custodialcare.”
B. IntermediateCare
1. Intermediatecare is likedoctor’ssupervision,but“continuousmedicalcare” isnot
needed.
2. Intermediate care is usually “nursing or rehabilitative care” (example: knee
replacement).
V. EmergingFrontier:AffordableHealthCareAct
A. MajorTrend
1. Thereare18,000careagenciesintheUnitedStates.
• Non-skilled
• Momandpop
• 99.8%donotofferhealthcarebenefits
2. HealthCarecostswillrise.
• Overtimeisbeingrequiredtobeadded
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3. Whowillpay?
• Companieswillcapworkers
• Homecarecostswillincrease
B. Shift
1. Affordable and safe consumer access directly to the healthcare providerswithout
traditionalagencies.
2. Agencieswillbemoreexpensiveandmorecomplicatedtohirethaneverbefore!
• “CareFamily handles insurances, bonding, payroll taxes; tasks that families or
careproviderswouldotherwisehavetomanage.”9
• “A result of having low expenses is that CareFamily can undercut the hourly
chargesoftraditionalagencies.”10
• “A family can remotely monitor a caregiver's attendance, provide reminders
aboutmedicationsandexchangecareplans.”11
• “CareFamily’sinnovativeuseoftechnologyallowsseniorstoremainintheirown
home,whilefamilymemberscloselymonitortheircare.”12
C. HowitWorks13
1. Thenationalaverageofhourlycostinthehomeusinganagencywouldbe$21per
hourasopposedto$14perhourunderhybrids.
• Thefamilysaves$7perhourbycuttingouttheagency.
2. Whenworking foranagency, theworkeronly receives$9perhourasopposedto
$12perhourthroughahybrid.
Don’tmisstheopportunitytoplan!
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Endnotes1RobertB.Friedland,“FacesofLong-TermCare:ALookintheMirror,”inGeorgetownUniversity,Long-TermCare
FinancingProject(2007).2“AmericansforLong-TermSecurity,”Long-termCareWeb,June7,2007,www.ltcweb.org/.3Ibid. 4Ibid.5PeterKemper,HarrietL.Komisar,andLisaAlecxih,“Long-TermCareOvertheUncertainFuture:WhatCanCurrent
RetireesExpect?”InquiryJournal,43(4)(2005):335-350.6“AmericansforLong-TermSecurity,”Long-termCareWeb,June7,2007,www.ltcweb.org/.7Ibid.8Ibid.9AldoSvaldi,“CareFamilyTargetsDenverforNewSeniorCareApproach,”DenverPost,October8,2012,
www.denverpost.com/business/ci_21709395/carefamily-targets-denver-new-senior-care-approach?IADID=Search-
www.denverpost.com-www.denverpost.com.10PhilipMoeller,“CanTechnologyReinventHowWeCareforSeniors?”U.S.NewsandWorldReport,February
15,2013,www.money.usnews.com/money/blogs/the-best-life/2013/02/15/can-technology-reinvent-how-we-
care-for-seniors.11“AsFeaturedIn,”CareFamily,June7,2013,www.carefamily.com/.12Ibid.13“HowCareFamilyWorks,”CareFamily,June14,2013,www.carefamily.com/about-us.
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ESPT–03
NavigatingtheSystem
Medicare,Medigap,andMedicaid
StephenD.Lentz,J.D.,Esq.
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Abstract
Asoneages,itisimportanttounderstandthedifferenttypesofinsuranceprograms.Medicare,
Medigap,andMedicaidtargetspecificpopulationsandcoveravarietyofhealthrelatedneeds.
There are also varying degrees of coverage under each program, and by gaining a deeper
understandingofeachprogram,apersonwill beable to choosewhichprogramswouldbest
meettheirhealthrelatedneeds.
LearningObjectives
1. Participants will be able to identify the components of Medicare, Medigap, and
Medicaid.
2. Participantswillunderstandthelimitationsofeachprogram.
3. Participants will achieve greater insight into the common objections to Medicaid
planning.
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I. Medicare
A. ComponentsofMedicare
1. MedicareistheFederalGovernment’shealthinsuranceprogram.
2. Medicarewasimplementedin1965targetingadultswhowere65orolder.
3. Thosewhoare65andolderarenottheonlyoneswhobenefitfromMedicare.
• Thosebenefittedcanbeyoungerifthereareassociateddisabilities.
• Thosebenefittedcanbeyoungerifthereispermanentkidneyfailure.
• ThosebenefittedcanbeyoungerifthepatienthasLouGehrig’sdisease.
4. Thisisafederallyfundedprogramthat“helps”withhealthcarecosts.
• Itdoesnotcoverallmedicalexpensesassociatedwithanindividual’slife.
• Medicaredoesnotcoverlong-termcare.
5. TherearefourcomponentsoftheMedicareprogram.
• Hospitalinsurance
• Medicalinsurance
• MedicareAdvantage
• Prescriptiondrugs
B. HospitalInsurance
1. Hospital insuranceunder the federally fundedplan is free to citizenswhoare65+
andwhoarepermanentU.S.residents.
2. Medicarecoversinpatienthospitalcare,somenursingcare,healthcare,andhospice
care.
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3. Thistypeofcareisdesignedforhospitalrelatedincidencesthatcomeup.
C. MedicalInsurance
1. Foranadditional,optionalfee,patientscanpurchasemedical insurancetogowith
thehospitalcomponentoftheMedicareplan.
2. MedicalinsuranceunderMedicaredoesnotcomeautomatically.
D. MedicareAdvantage
1. MedicareAdvantageisreallywhatiscalled“Medigapinsurance.”
2. Medicare Advantage is offered through private health insurance companies and
privateproviders.
3. MedicareAdvantageexpandscoverageforhospitalandmedicalinsuranceandadds
prescriptiondrugs.
4. ItisbasicallywhatyouarepayingforifyouareusingaHMOorPPO.
5. OneofthehallmarksoftheMedicareAdvantageisthatitrequiresthepatienttosee
doctorswhoareenrolledinthatplan.
E. PrescriptionDrugs
1. The option to be able to have prescription drugs paid for underMedicare can be
purchased.
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2. Drugs are becomingmore expensive and it makes the optional prescription drug
componentofMedicareveryimportant.
F. MedicareandLong-TermCare
1. Medicaredoesnotpayforlong-termcare.
2. Medicareisdesignedtocovermedicalexpensesforacuteconditions.
3. Medicare does pay for medically necessary skilled nursing homes, but for short
periodsoftime.
• 3daysinthehospital
• Needforskillednursingcare
• Doctorhasorderedcare
• Thepaymentonlylastfor100days
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4. Medicare will not pay for personal care services or custodial care outside of the
nursingfacility.
5. Medicaredoesnotcover“custodialhomehealthcare.”
II. Medicaid
A. MedicaidSpend-Down
1. “Spend-down” isaprocessofreducingtheassetsan individualpossesssothatthe
individualcanqualifyforMedicaid.
2. Spend-downisnothingmorethanspendingone’smoneyuntiltheappropriateasset
limitisreached.
B. MedicaidEligibility
1. Medicaidtargetsthosewithlowincome.
2. Medicaidspecificallytargets:
• Pregnantwomen
• Childrenunder19
• Peoplewhoare65+
• Peoplewhoaredisabled
• Peoplewhoneednursinghomecare
C. Example
1. The state of New Jersey has the asset limit to be able to qualify forMedicaid of
$2,000.
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• Therearedifferentrulesthatapplytoamarriedcouplethanthosethatapplyto
anindividual.
• Toqualifyforthe“MedicaidOnly”programinNewJersey,thepersonhastobe
65-yearsold,havealimitedincome($1,737/monthorless),andamedicalneed.
2. Inmostcases,whendealingwithseniorcitizens,theindividualisinorisanticipating
goingintoanursinghomeoranassistedlivingfacility.
• Dependingonthefactsoftheindividualcase,notallassets,includingcash,have
tobespentdown.
D. SpendDownExemption
1. Certainassetsareexemptfromthespend-down.
2. Forexample,inthecaseofasingleindividual,theindividual’shomeisexemptifthe
personintendstoreturntoit.
3. InNewJersey,itisassumedbyMedicaidthatthepersonwillnotreturnhomeifthe
persondoesnotreturnwithinsixmonthsofenteringthenursinghome.
• Thisisanassumptionthatcanberebutted.
4. If, on the other hand, the individual in the nursing home is married and the
“communityspouse”isstillinthehome,thenitisexemptfromthespend-down.
• Similarly,inthecaseofthemarriedcouple,thefamilycarisexempt.
• The community spouse, that is, the non-institutionalized spouse, enjoys a
“communityspouseresourceallowance”whichmeansthathe/shegetstokeep
one-halfofalltheassetsofthecoupleuptoapredeterminedmaximum.
• Theassetsthatcomprisethecommunityspouseresourceallowanceareexempt
fromspend-downbecause,bylaw,thespouseispermittedtokeepthoseassets.
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• Allassetsinexcessofthecommunityspouse’ssharearesubject,ifnototherwise
exempt,tothespend-down.
5. If thecouplehasahouseand$100,000cash, thecommunityspousewouldget to
keepthehouseand$50,000.
• Theinstitutionalizedspouse,inordertoqualifyfortheMedicaidOnlyProgram,
wouldhavetospend$48,000.
• Thespenddownis$48,000.
6. Theamountofthespend-downisdeterminedbasedontheassetsofthecoupleas
of the day the institutionalized spouse enters a facility, hospital, nursing homeor
assistedlivingfacilityforanextendedstay.
• Thisiscalledthe“snapshotdate.”
7. Thereareexemptionsandallowancesavailabletocouples,whicharenotavailable
tosingleindividuals.
8. A single individual is not entitled to any allowanceother thana $35/daypersonal
needsallowance(tolimitedexceptions).
• The allowances for the community spouse are intended to protect the
communityspousefrombecomingimpoverished.
9. Thespend-downisnotaroboticspendingofmoney.
• AnindividualorcouplecandesignaMedicaid/AssetProtectionPlan.
• The goal ofwhich is to “dispose” of assets in a systematic, plannedmatter in
ordertoprotectandpreservethoseassetsforthefuture.
10. Disposalofassetsdoesnotnecessarilymean“spending”assets.
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• Disposition for a couple may mean conversion of assets from “countable” to
“exempt.”
• One example of conversion from countable to exempt is the purchase of a
funeralfortheinstitutionalizedspouse.
• Spend-downdoesnotmeanthattheassetsmustbespentoncare,(e.g.,medical
careand/orthenursingfacility).
11. Spend-downmeansthatthefundsareusedtopurchaseitemsattheir“fairmarket”
value.
• “Fairmarketvalue”mustdistinguishthespend-downfrom“gifting”(i.e.,giving
somethingawayormakingapurchaseforlessthan“fairmarketvalue”).
• Thepurchaseofclothes,atelevision,ahaircutorothersimilaritemsareforfair
marketvalueanddonotconstituteas“gifts.”
• GiftsorpurchasesforlessthanfairmarketvaluearepenalizedbyMedicaidand
thepenaltiesresultinperiodsofineligibilityforMedicaid.
E. Medicaid/AssetProtectionPlanning
1. Medicaid/Asset Protection Planning is the process of designing a plan for the
disposition of assets in such a fashion as to save themaximum amount from the
spend-down, thereby protecting those assets from “loss” by being spent on long-
termcareorforothermedicalpurposes.
2. Usually,planninginvolvesthetransferofthefundstothechildrenofthecoupleor
individualandoncegivenbelongtotherecipient(s)todowithastheywish.
III. EthicsofMedicaidSpend-Down
A. Economics
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1. ClientsrequestMedicaidplanningadviceprimarilytolessentheeconomicimpactof
long-termcare.
• The cost of long-term care is often catastrophic for the elderly, middle class
individuals,andcouples.
2. Is it “wrong” to help the elderly protect their assets by engaging in Medicaid
planning?
B. CommonObjectionstoMedicaidPlanning
1. Medicaidplannersareoftenaccusedof“gamingthesystem”fortheirundeserving
andoverprivilegedclients.
2. Medicaidisforthe“poor,”notforpeoplewhohavemoneyandcanhirethelawyers
tosheltertheirassets.
3. Ifleftunchecked,Medicaidplanningwillbankruptthesystem.
4. TheresultofuncheckedMedicaidplanningwillbeatwo-tieredsystemoflong-term
care:thosewhocanpayprivatelyforgoodcareandthosewithnomoneywhoare
forcedintoMedicaidnursinghomesthatprovidesubstantialcare.
5. Medicaidplanningisaformofelderabuse.
• Becausemanyeldersinnursinghomeslackthementalcapacitytochoosetodo
Medicaid planning, their children, who stand to gain most from saving the
moneyfromthenursinghome,makethechoiceforthem.
• Insteadoftheelder’sassetsbeingexpendedtopayforgoodlong-termcare,the
assetswindupinthechildren’shands—andtheelderwindsupwithsubstandard
long-termcare.
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6. Medicaidplanningdiscourages“personalresponsibility.”
• Theasset-focusedMedicaidplanningthatelevatesprotectingtheelder’sassets
from the nursing home above all other goals, particularly above the goal of
promotingandmaintainingtheelder’squalityoflifeandqualityofcare
7. TheelderlawattorneywhoishiredtodoMedicaidplanning,butwhofailstotake
reasonablemeasurestoavoidorminimizethelikelihoodthatharmwillresulttohis
client,isactingunethically.
8. Mom and Dad worked all their lives and paid into the system. Why, then, is it
unethicalforthemtodoMedicaidplanningandgettheirmoneybackout?
9. AnotherargumentmakesananalogyofMedicaidplanningtoestatetaxplanning.
• Ifitisokaytodoestatetaxplanningtominimizeestatetaxes,whyisitnotokay
tosavenursinghomecostsbyMedicaidplanning?
10. DefenderswillsayMedicaidplanning,likeestatetaxplanning,islegal.
• Healthcarecoststhreatentodepleteanelder’sestateduringhislifetime.
• ThegoalofMedicaidplanningisthereforetopreservetheindividual’sestate.
• Ethical rules allow elder law attorneys to assist clients who wish to minimize
thosecosts,eveniftheplanisaggressive,aslongastherepresentationiscarried
outwithintheboundsofthelaw.
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