Lowcountry Elder Law & Estate Planning

The eligibility rules for nursing home Medicaid are said to be, for the most part, uniform throughout the country. Medicaid is, afterall, a federal program with laws issued by Congress and the federal agency overseeing the program (CMS).
However, states may implement laws that are more generous than the federal system. The federal system allows a Medicaid applicant to keep only $2,000 in assets. One such generous benefit accorded South Carolina residents is the protection given to the family home- .i.e., the “homestead”. Under this rule, one need not sell the “homestead” to qualify for nursing home Medicaid as long as the value of the home is less than $500,000.

This is a very generous rule not allowed in many other states. In New Jersey, for example, as long as all other assets are reduced to $2,000, you will be granted temporary Medicaid and given 6 months to sell the homestead. Once sold, you lose Medicaid and must start paying the private rate for nursing home care. There is no homestead protection in NJ.

The South Carolina law, which allows you to keep the homestead, is a bit deceiving though. SC has a a system for recouping the money it pays for nursing home costs through use the Medicaid lien. So when the State of SC says you don’t have to liquidate the homestead, what the really mean is that you can get an interest free loan for the nursing home costs it pays for you, but, when you die, the State can collect on the loan by placing a lien on the homestead. This lien ensures that the State of SC will be repaid for its costs on your behalf, before the homestead and be sold or passed on to heirs of your estate.

Greetings to vistitors from Yahoo, Facebook and the Island Packet!

I will present an  Elder Law Workshop at the Bluffton Public Libarary on April 22, 2009 at 1: p.m.

The Topics will include:

How Power of Attorney, Joint Accounts and Wills work together; What to discuss with adult children about your financial affairs; What is Probate and why is everyone trying to avoid it; Revocable v. Irrevocable Trusts; Medicaid look back and asset transfer rules and who pays for nursing home costs; Difference in Medicaid laws between single and married couples. Bring your questions!

Joint bank accounts have many valuable uses. Individuals use them for different reasons. In my experience, it is too often for the wrong reason. When you are in the business of estate planning (like yours truly) joint accounts are frequently discussed at initial consultations. From these consultations I know, first hand, that there is a great misunderstanding of how joint accounts are to be used correctly, and to the client’s advantage.   Read More below

Lesson:  For Attorney- ask your clients about their health

               For client- tell your estate planning attorney about your health. 

The Supreme Court of South Carolina ruled that an attorney's failure to draft a will and arrange for its execution before a client's death does not give prospective beneficiaries of the will a cause of action for legal malpractice. Rydde v. Morris (S.C., No. 26619, March 23, 2009).

All seats for the Elder Law Seminar to be held Monday , April 6, 2009 at Pinckney Hall in Sun City Hilton Head have been RESERVED! (of course there is no fee for the seminar so nothing was really sold  ).

I was expecting , hopefully, 45 attendees. By the time I had conducted the first count of the reservations, I was over 55 and had to request a bigger hall! And before you know it, the other 45 seats were reserved and I had to start turning down seat requests!

Thank you Sun City residents for showing such interest in the topics, and my apologies to those who could not reserve seats. 

However, I will be speaking at an Elder Law Workshop at the Bluffton Public Library on April 22, at 1 p.m., on the same topics.

In addition, I have reserved another room at Sun City Hilton Head and will return to Pinckney Hall to present on another Elder Law topic on June 8, 2009.

It doesn’t take long after a family member enters a nursing home facility for a lifetime of savings to be depleted to pay for the costs of long-term care.   

And, when assets are spent-down to $2,000, MediCAID can kick in and start paying the bill. But, once a MediCAID beneficiary spends down to $2,000, assets must stay below $2,000 or else, if they rise again to exceed $2,000, eligibility is lost.

While Medicare and Medicaid are distinctly different government administered health insurance programs, they do have some similarities in types of coverage. One area where Medicare and Medicaid overlap, and where there is some confusion, is when a beneficiary is admitted to a skilled nursing facility, a/k/a nursing home.  Most MediCARE beneficiaries realize that Medicare does not cover the costs of long-term custodial care (i.e. nursing home care) yet, it is not unusual to find a Medicare beneficiary in a known nursing home with costs covered by Medicare.  How can this be?      READ More Below

Most of us are aware that when a taxpayer’s medical expenses exceed a portion (7.5%) of annual income, those expenses can become itemized deductions on tax returns, and taking the decuction, will, therefore, save income taxes. It's tax season and a good time to discuss an important issue for many Low Country senior residents who live in the numerous Assisted Living Facilities (ALF’s herein) in the area. ALF residents should be aware of tax laws specifically applicable to them. ALFs are NOT nursing homes, but they do cater to our elder community and some, if not ALL of the services provided, can fall under the rubric of “medical expenses” as the tax code defines that term so that the entire ALF monthly bill may qualify as a medical expense. And, if not all ALF monthly expenses qualify as deductible medical expense, a portion of the monthly cost probably will.

Very often clients want to “protect” their home for the family. Some think the best way to do this is giving it giving to other family members. More typically the question that is asked in this manner:  "How do I add my children's name to my deed?".  While protecting the home is a legitimate concern, there are smart ways and bad ways of achieving that goal. There is tremendous risk when transferring outright ownership to other family members, including harmful tax implications. It is just as harmful to simply add a child's name to your deed.

A typical Life Estate deed legally transfers the future ownership in real estate, and reserves rights of current ownership in the person making the conveyance. This is different than an outright transfer where no strings attach to the person making the conveyance. A “life estate” is similar to the concept to a timeshare. With a timeshare, a person owns the right to use property during a designated period of ownership. An owner of a life estate has the right to live in the property for a lifetime. The lifetime right automatically terminates upon death when persons designated in the deed become outright owners. 

A Life Estate Deed used for basic Estate Planning is a way to transfer ownership of property at death in the same way one might want to in a Will. The benefit of this transfer is that the Life Estate deed AVOIDS PROBATE. Thus, it is a simple, and inexpensive, way to transfer ownership of the home at death.          Read more below

One of the most frequent questions asked of an Elder Law attorneys is: 

Q. What is the 5 year look-back rule for Medicaid?

A. There is no 5 year look-back rule yet. The Deficit Reduction Act of 2005 which increased look-back from 3 years to 5 years will not be fully implemented until February, 2011.

Huh? Talk about a brain twister. Let's start from the beginning.

The Medicaid Program

Medicaid is a jointly funded (federal and state government) program intended to provide health care for the poor that has also become the major source of financing for nursing home care. Nursing-home residents must spend virtually all of their assets, down to as little as $2,000, before they may qualify. Married couples have higher asset allowances when one spouse is healthy enough to remain at home.

Medicaid planning, always a sensitive subject, became even more sensitive when  Congress enacted new rules to restrict planning strategies when it passed the Deficit Reduction Act of 2005, made into law on February 8, 2006.

Medicaid planning occurs when individuals use a very arcane set of Medicaid laws to protect their assets in order to reduce them to the $2,000 level and qualify for Medicaid help sooner.

The "DRA of 2005"