by Thomas D. Begley, Jr., CELA

The key issue concerning trusts “for the sole benefit of” is availability. In a private letter, HCFA, now CMS, has taken the position that a trust established for the sole benefit of a community spouse under HCFA Transmittal 64 is an available resource.^[1] HCFA maintained that there is a material difference between a standard annuity and an “annuitized” trust. HCFA states:

a standard annuity can protect the funds used to purchase the annuity from being counted as resources in determining eligibility for Medicaid. However, there is a fundamental difference between a standard annuity and the “annuitized” trust you established. A standard annuity requires the actual purchase of a commodity; i.e., the annuity itself. A specific amount of money is given to the entity selling the annuity, in return for which the entity contractually agrees to provide an income stream for a specified period of time. Upon completion of the transaction, the buyer no longer owns the funds used to purchase the annuity. Instead, the buyer owns the annuity itself. If the annuity is irrevocable, as most annuities are, the buyer cannot reclaim ownership of the funds used to purchase the annuity. The buyer is only entitled to the income stream purchased and only for as long as the annuity stipulates. This is essentially the same as the purchase of any item or product where funds are exchanged for ownership of something else.

It is important to note that the letter from HCFA is not law or policy. It is an interpretation of policy as articulated in HCFA Transmittal 64. Under this letter, only the amount of the CSRA could be able to be placed in a “sole benefit of” trust. HCFA Transmittal 64 clearly compares the transfer of assets to a community spouse with the transfer of assets to a trust for the sole benefit of a community spouse.^[2] The document clearly states “when transfers between spouses are involved, the unlimited transfer exception should have little effect on the eligibility determination, primarily because resources belonging to both spouses are combined in determining eligibility for the institutionalized spouse.” Thus, resources transferred to a community spouse are still be considered available to the institutionalized spouse for eligibility purposes.

[1] Letter dated April 16, 1998, from Robert A. Streimer, Disabled and Elderly Health Programs Group, Center for Medicaid and State Operations, Health Care Financing Administration, to Jean Galloway Ball.

[2] HCFA Transmittal 64 § 3258.11.

Every senior should be aware of Michigan’s “Long Term Care Ombudsman” program, which upholds the rights of seniors, whether they are in a nursing home, or an assisted living setting.

Michigan Senior Living

Seniors living in Michigan, and who may be planning to add a dwelling to their existing property to live in—while renting out their home—may already be familiar with accessory dwelling units (ADU). Instead of living in that backyard treehouse, the one you built for the kids umpteen years ago, these so-called ‘carriage flats,’ or mother-in-law apartments, are creating havoc with local zoning laws.

For sure, they’ve been around for decades, and they do represent plausible sources of supplemental income for homeowners, particularly for seniors looking to amp up their income stream.

While Michigan admits it is not in the subsidized housing market, they do recognize that ADUs offer another choice for “housing affordability.”

Home-care aides to earn more in 2015

Of course, in a perfect Senior World, that income just might be there to help defray a couple’s home care costs with the income from renting out their main residence.

No surprise, but home care costs are rising. In fact hourly pay for home care aides were given a bump this year when the government made it mandatory for most direct-care workers to receive the federal minimum wage, including overtime pay.

Homeowners with limited financial resources, and who are willing to do a lot of research, may have the option to pay for home care costs by taking out a reverse mortgage. In fact, the HUD.gov website touts its ‘brand’ of reverse mortgages as a vehicle that allows you to  “Use Your Home to Stay at Home;” it is the only reversed mortgage that is federally insured.

Regardless of the housing choice, a predominant theme for those over the age of 50, is one of growing old in “isolation” from family and community, according to an overview on the AARP site. For sure, either by choice, or because of aging-related diseases like Alzheimer’s, seniors can go through daily depression simply because they think they don’t matter.

Someone does care…

When a spouse decides it’s best for their loved one to move into a long-term care facility, the whole process is beyond overwhelming, particularly if there is no one living close by.

Every senior should be aware of Michigan’s “Long Term Care Ombudsman” program, which upholds the rights of seniors, whether they are in a nursing home, adult foster care home, or even an unlicensed, assisted living setting.

In short, the program exists for family, or relatives, to make sure that complaints/concerns are dealt with. Volunteers help with issues ranging from resident rights, guardianship and nursing home placement.

Financial support for Medicaid spouses.

The biggest fear among seniors is the idea of having to relinquish their home and deplete their life savings in order to receive Medicaid’s financial assistance.

That is simply not the case. In fact Congress has made sure that no one in this situation needs to go bankrupt due to the costs associated with long-term care.

As such, Medicaid law is there to provide a minimal financial footing for spouses of a Medicaid applicant; this, through the “community spouse resource allowance,” or CSRA.

A thirty-day stay is necessary, and on the day of admittance into a nursing home, for example, all of the assets of the couple are calculated. Generally, for 2015, a spouse can keep up to $119,200 in countable assets with a minimum of $23,844. As noted on the Nolo.com website:

“States are required to have spousal protection rules for Medicaid recipients who are in nursing homes, but they are not currently required to have spousal protection rules for other Medicaid recipients, like those receiving in-home care. However, many states do have rules protecting the income and/or assets of spouses of Medicaid recipients getting long-term care outside of nursing homes…”

Contact us to discuss the many options available to you through proper estate planning.

The post Home-care costs for ‘aides’ get a bump in 2015; includes over-time pay. appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.