Texas Estate Planning

The Sandwich Generation

Are you running from baseball practice to your parent’s doctor’s appointment? Fielding stressful texts and calls from both your children and your parents about everything that’s changing in their lives, perhaps you’re trying to figure out what’s changing? Do you maybe feel like you’re being squished between two pieces of stale bread, with no room to breathe? Well, you might be part of the Sandwich Generation. 

 

If you haven’t heard the phrase before, “The Sandwich Generation” means you’re not only a caretaker for your children, but you’ve also become responsible for your parents’ care needs as well. It can be stressful to be pulled in so many directions at one time. When the responsibilities come to be too much for one person’s schedule, families typically begin the nursing home/assisted living conversation, which can be tricky to navigate. 

 

The biggest question: How are we going to pay for a nursing home? 

“Caring for a family member who may not have long-term care or short-term care insurance or disability insurance, can drain your own savings and disrupt your own retirement plans. A recent AARP study found that many adults in their 40s, 50s and 60s are helping their parents financially.” - From a CNN article from February 2023 about family caregivers 

 

Pricing and location are typically the first logistics families look at when searching for long term care. It’s very important to find a facility that works for your loved one’s care needs, budget, and socialization.  

 

No matter your situation, it can be difficult to saddle a new bill each month if you’re paying for long-term care. Luckily, there are quite a few solutions to help ease this financial burden. At Ard Law Firm, PLLC, we take an individualized approach to each client’s case, factoring in your needs, assets, and personal values in order to create the best plan forward for you, and your family. 

 

Our biggest focus is on asset protection and probate avoidance– we do our best to help future generations carry on the legacy of past generations. Getting all of your ducks in a row will require some collaboration with us, but our process is designed to save you the headache of penalty periods and reduce, or even eliminate, the burden of probate later down the line. 

 

Medicaid Myths

If you’re financially helping your parents with the cost of their care, then it’s time to call an Elder Law Attorney adept at Medicaid. There are many myths surrounding Medicaid, probably because the program varies from state to state and new laws dictating Medicaid are passed every year. It’s hard to hit the moving target of Medicaid when you have so many other things to take care of. 

 

Luckily, we have a dedicated Medicaid team that will guide you and your family through the application process and follow it until your loved one is approved for financial assistance to pay for a nursing home. We file complaints and appeals on your behalf while also staying in contact with the Medicaid office to make sure nothing falls through the cracks. 

 

Check out Sandy’s Medicaid Myths fact sheet to learn more about Medicaid eligibility and logistics: Download 2023 Medicaid Myths

 

Protect the Family Home

One of the biggest Medicaid Myths we hear is that “Medicaid will make me sell the house” – FALSE! 

 

We always recommend waiting to sell the house until you talk with a licensed attorney who works on Medicaid. With asset and income limits and exemptions, it’s important to learn about all of your options. For instance, there is a document called a “Transfer on Death Deed” which has been incredibly helpful to keep the family home out of probate and in the hands of the next generation.

 

Seek Professional Counsel

As you can see, there are many different legal details that go into getting qualified for Medicaid. At the beginning of the process, you will have to provide ample paperwork to prove medical and financial necessity to the Medicaid office, but those efforts can really pay off in the end when the house is securely transferred outside of probate and Medicaid has covered a substantial portion of nursing home costs. 

 

Each case is unique–the earlier you speak to an expert in the field, or a licensed attorney familiar with Medicaid, the more control over your plan you’ll have. Call us today to schedule your free consultation 713-429-0218. Our director of client services will send you a questionnaire prior to your meeting. One of our attorneys will review your answers and start the conversation about your options to pay for nursing home care. If for some reason we’re unable to provide services to you and your family, we will do our best to refer you to an attorney who can help.

What's the Difference Between Medicaid, Medicare, SSI, and SSDI?

If you need assistance paying for long-term care, then you need to look into Medicaid, not Medicare. But if you need health insurance, then it’s a Medicare application you’ll be submitting. And although SSI (Supplemental Security Income) refers to a specific type of program, it’s only a one letter difference from SSDI (Social Security Disability Insurance) which is a completely different benefit program for people with various types of disabilities. 

And when you look into the details of each program, it only gets more complex. So let’s break it down…

There are over one-hundred programs administered under the umbrella of Medicaid out there to help you receive the appropriate health care, insurance, and assistance that you deserve. Because of the sheer number of programs, it can be difficult to find the one best-suited for your needs. Each program has different requirements, guidelines, and limitations. 

Each program is guided by laws that change each year, if not more often, and vary from state to state, depending on the program. It can be quite helpful to get counsel from a licensed attorney in your area who stays up to date on the laws that specifically deal with the program you are applying to. The Attorneys at our Firm stay up to date through consistent continued learning experiences offered specifically for this purpose, and they ensure that every member of the team is made aware of updates and changes in the law so that we can better serve the needs of our community. 

To help you in your search for the program that best fits you and your family’s needs, here is a very quick rundown of 4 common programs that are easy to confuse: 

 

1. Medicaid: 
   • Health coverage (which is legal entitlement to payment or reimbursement for your health care costs)
   • Funded and administered jointly by the state and federal governments. This means that each state has different laws regarding Medicaid.
   • Income and asset limit 
   • Available to low-income: 
     1. Adults
     2. Children
     3. Pregnant women
     4. Elderly adults 
     5. People with disabilities 
   • Can be used for: 
     1. Long-term care 
     2. Inpatient and outpatient hospital services
     3. Physician services
     4. Lab and x-ray services
     5. Home health services 
2. Medicare: 
   • Health insurance 
   • Administered by the federal government 
   • Eligibility is based on: 
     1. Age (65 or older) 
     2. Certain younger people with disabilities 
     3. People with End-Stage Renal Disease 
   • There are various Medicare plans based on your eligibility and needs. 
3. SSI (Supplemental Security Income): 
   • Supplemental monthly income 
   • Eligibility is based on:
     1.  income and asset limits 
     2. disability
     3. Age 
        • Adults: 65+, or blind, or have a disability 
        • Children: under 18 and have physical or mental condition(s) that very seriously limits their daily activities for a period of 12 months
4. SSDI (Social Security Disability Insurance): 
   1. Supplemental monthly income 
   2. Means-tested based on disability and recent work history 
      1. Includes income and asset limits 
   3. Same medical requirements as SSI 

 

Hopefully that helps give you a better picture of where to start in your search for the programs that you or your loved ones might need. Remember that each state has their own set of laws regarding benefit programs and a licensed attorney with an understanding of these programs can be a helpful resource in navigating the application process. 

Ard Law Firm, PLLC is located in the Greater Houston Area, off I-45 south on the way to Galveston, but is able to serve all of Texas. Over the last decade, we’ve focused on Medicaid to help people transition into long-term care without large financial burdens.

We work with our clients to get their information together in order to apply for the benefits they deserve, and if obstacles come up along the way we work together to overcome them. Whether that means drafting legal documents, conducting research, or even arguing appeals, we walk with you on your journey, every step of the way.

Saying Medicaid Estate Recovery Keeps Families in Poverty, Advocacy Groups Call for Abolishing It

To qualify for Medicaid coverage of long-term care, you must satisfy very complicated financial eligibility rules—rules that often can be traps for the unwary. One of the most significant traps is Medicaid's right to recover its expenses from your estate after you die – a practice known as “estate recovery.”

Under current Medicaid law, states are required to attempt to recoup Medicaid spending for long-term care services. Since about the only asset you're allowed to own and still get Medicaid coverage is your home, this right of estate recovery is the state's claim against your home. In other words, if you own a home, Medicaid is really a loan. It will pay for your care, but your house will have to be sold when you die to repay the state for the services it provided.

Now, five elder advocacy groups are calling on Congress to eliminate Medicaid estate recovery after a congressional advisory commission concluded that the practice recoups only a tiny percentage of Medicaid spending while contributing to generational poverty and wealth inequity.

“The burden of estate claims falls disproportionately on economically oppressed families and communities of color, preventing families from building wealth through home ownership, which has been historically denied to communities of color through discriminatory public policy,” the five groups – Justice in Aging, the National Academy of Elder Law Attorneys, the National Health Law Program, California Advocates for Nursing Home Reform, and the Western Center on Law & Poverty – wrote in a jointly authored Issue Brief, Medicaid Estate Claims: Perpetuating Poverty & Inequality for a Minimal Return. “Congress should amend Federal law to eliminate Medicaid estate claims. Alternatively, the law should be amended so that states have the choice of whether to use Medicaid estate claims, as recommended in a recent report to Congress by the Medicaid and CHIP Payment and Access Commission (MACPAC).”

In its March 2021 report to Congress, MACPAC recommended that Congress amend Medicaid law to make estate recovery optional for states, rather than required as it is now. The group, a non-partisan legislative branch agency that provides analysis and recommendations to Congress, the U.S. Department of Health and Human Services (HHS) and the states, also recommends that HHS set minimum standards for hardship waivers under the Medicaid estate recovery program.  Currently, it’s up to the states to decide what qualifies as “hardship.”

Pointing out that estate recovery recoups only about 0.55 percent of total fee-for-service long-term care spending, MACPAC recommends that states not be allowed to pursue recovery against any asset that is “the sole income-producing asset of survivors,” homes of “modest value,” or any estate valued under a certain dollar figure.

In their Issue Brief, the five advocacy groups go a step further. Noting that “no other public benefit program requires that correctly paid benefits be recouped from deceased recipients’ family members,” they call for the elimination of estate recovery “so that low-income families are better able to retain wealth and pass it on to future generations. Or, at a minimum, federal law should be amended to make estate claims voluntary.”

The Issue Brief details how Medicaid estate recovery keeps families in poverty, exacerbates racial wealth gaps, and runs counter to efforts to create more affordable housing.

To read the Issue Brief, click here.

To read the relevant chapter of MACPAC’s report to Congress, click here.

Making a Fresh Start for 2020? Here’s Help

Some people like to start their New Year’s off with a clean slate, going through the past year’s files and tossing or shredding anything they don’t absolutely need. However, many don’t, in part because we’re not sure exactly what documents we need to keep, and which we can toss. This article from AARP Magazine provides the missing information so you can get started: “When to Keep, Shred or Scan Important Papers.”

Tax Returns. Unless you’re planning on running for office, the last three years of tax returns and supporting documents are enough. That’s the window the IRS has to audit taxpayers. But there are some exceptions: if you are self-employed or have a complex return, double that number to six years, which is how much time the IRS has to audit you, if it suspects something’s fishy.

Regardless of how you earn your income, visit MySocialSecurity.gov account before shredding to make sure that your income is being accurately recorded. Having your tax records in hand will make it easier to get any figures fixed.

As for documents regarding home ownership, keep records related until you sell the house. You can use home-improvement receipts to possibly reduce taxes at that time.

Banking and Investments. If you or your spouse might be applying for Medicaid to pay nursing home costs, you’ll need to have five years of financial records. That includes bank statements, credit card statements, and statements from brokerage or financial advisors. This is so the government can look for any asset transfers that might delay eligibility.

If that’s not the case, then you only need banking and financial statements for a year, except for those issued for income-related purposes to provide the IRS with a record of tax-related transactions. Your bank or credit card issuer may have online statements going back several years online. However, if not, download statements and save them in a password protected folder on your home computer.

Stocks and bonds purchases need to be kept for six years after filing the return reporting the sale of the security. Again, this is for the IRS.

If you have a stack of cancelled checks, shred them. Most every bank and credit union today have an electronic version of your checks.

Medical Records. These are the records you want to keep indefinitely, especially if you have had a serious illness or injury. The information may make a difference in how your physicians treat you in the future, so normal or not, hang on to the following documents: surgical reports, hospital discharge summaries and treatment plans for major illnesses. Put these in a password-protected folder in your computer or a secure cloud-based account, so they can be shared with future healthcare providers. You should also keep immunization and vaccination records. The goal is to have your own medical records and not to rely on your doctor’s office for these documents.

Maintain proof of payments to medical providers for six years, with the relevant tax return, in case the IRS questions a health care deduction.

Prior Planning Always a Better Alternative

None of us knows what kind of unexpected surprises will occur in our lives. We’d like to believe they will all be happy events, like winning the big Power Ball jackpot. However, unpleasant things like illness or a flood or fire often occur. We never think it will happen to us, says The Dalles Chronicle’s article “Prepare now for emergencies.” Unfortunately, these things do happen, and when they do, being prepared can make all the difference between a stressful situation and a really awful situation that could have been made, well, less awful.

For starters, have you met with an estate planning attorney to create a comprehensive estate plan that includes a last will and testament, a financial power of attorney and a health care power of attorney? The will concerns distribution of your possessions and property, the power of attorney gives a trusted person the ability to take financial and legal actions on your behalf, in the event that you become incapacitated and the medical power of attorney allows someone to make health care decisions for you, also if you become incapacitated. There are also many other tools that an estate planning attorney can help you with, such as a Special Needs Trust, if your family includes a family member with special needs, or other trusts, if they are needed.

Next, your emergency preparations should include having important documents assembled in a notebook, on a memory stick and/or a safe location. Imagine there was an emergency evacuation and you had to leave your home immediately. What documents would you need? Here’s a checklist:

• Contact information for family members, doctors, attorneys, dentist, insurance broker, financial advisor.
• Cash, so if ATMs are not working, you will have cash on hand.
• Identification documents, including originals of your birth certificate, marriage license, divorce papers, passport, Social Security card, health insurance cards (or Medicare or Medicaid cards).
• A video of your home and all of your possessions on your mobile phone. Consider emailing it to a family member or friend who lives in a different location.
• Insurance policies for home, auto, disability, long-term care, etc. Include contact information for either 800-numbers or your local agent, if you need to file a claim.
• A copy of recent financial statements for credit cards, banks, brokerage firms, retirement accounts, car loans, mortgage and similar types of accounts.
• Copies of the last three years of tax returns. If you work with a CPA, they should have them on a secure portal, but a hard copy will be useful to have.
• Legal documents for your estate plan, including the will, power of attorney and health care power of attorney, as described above.
• Other legal documents, including car registration, car title and property deed to your home.

These documents should all be organized in a folder that is placed in your home where you and your spouse know where it is and can grab it on your way out the door.

One more item that should be noted in this digital age: if you use a laptop or tablet that contains websites that you use frequently for personal finance, investments, etc., be mindful of its location in the house, so you can grab it and a charger cable quickly. If you have passwords for accounts—and most of us do—you should print them out and include them in your file folder for easy access. You can almost always re-set a password, but how much easier will rebuilding your life be if you have them on hand?

If you do ever face a catastrophic emergency, having these materials will save you hours of time and stress.

Reference: The Dalles Chronicle (July 16, 2019) “Prepare now for emergencies”

Protect A Life of Working and Saving from Long Term Care Costs

Every month, Lawrence Cappiello writes a check to a nursing home for $12,000 to pay for the cost of his wife’s nursing home care. Two years ago, his net worth was $500,000. In less than two years, the Cappiello’s savings will be gone. This unsettling story is explained in the article “How to Keep LTC Costs From Devouring Your Client’s Life Savings” from Insurance News Net. He is suffering from nursing home sticker shock and says he should have known better.

Cappiello was a professor at the University of Buffalo for 25 years. During that time, he taught an introductory course on health care and human services that touched on the costs to consumers. He said it was clear even then, that the cost of health care was going to escalate out of control.

To qualify for Medicaid payments of nursing home care in New York State, residents are permitted to own no more than $15,450 in nonexempt assets. However, elder lawyers, whose practices focus on these exact issues, say that the way to protect the family’s assets, is to take steps years before nursing home care is needed. Some general recommendations:

• Signing over the deed of the home to children or any others who would otherwise inherit it from you in a will. The transaction would need to stipulate that you have life use of the home.
• Establishing an irrevocable trust, that upon death, transfers the house to the beneficiaries. There must be language that ensures that you have life use of the house.
• Giving away savings and other financial assets.

Transfers of any assets must take place more than five years before applying for Medicaid nursing home coverage. If they have been given away or transferred within the five year “look-back” period, then there is a chance that they may still qualify, or they may have to wait five years.

That is why planning with an experienced elder law attorney is so critical for families, especially when one of the spouses is facing a known illness that will get worse with time. There are steps that can be taken, but they must be done in a timely manner.

Many older people are not exactly jumping with joy at the idea of handing over their assets, even when relationships with adult children are good. The idea of giving up assets and the family home is a marker of the passage of time and the inevitability of death. These are not things that we enjoy considering. However, taking these steps in advance, can make a huge difference in the quality of the well spouse’s life. 

It should be noted that a sick spouse can move assets to a healthy spouse, to make the sick spouse lawfully poor and eligible for Medicaid. There is no look back period or penalty for interspousal transfers. This sounds like a very simple solution. However, these are complex matters that need the help of an experienced attorney. If it were so easy, countless spouses would not be facing their own impoverishment because of an ill spouse.

Reference: Insurance News Net (Feb. 4, 2019) “How to Keep LTC Costs From Devouring Your Client’s Life Savings”

Financing Assisted Living by Saving, Planning and Insurance

Part of the increase in the number of people who live long enough to be of retirement age, is because life expectancies have increased. The average U.S. life expectancy has increased from 68 years in 1950 to 79 years in 2013, according to the Population Reference Bureau cited in an article from U.S. News & World Report titled “How Should I Finance Assisted Living?”

The combination of increasing life expectancies and improvements to healthcare, means that more people are living longer after they stop working. This has led to a financial crisis for many Americans: how can they pay for the increased cost of healthcare and assistance needed, as they enjoy these additional years, and in some cases, decades.

It’s like a math problem. If you retire at age 65 and need to enter an assisted living facility 10 years later, how much money will you need to pay for the health care you’ll need by the time you reach 84? It’s impossible to calculate, because there are so many unknown factors.

Those factors are exactly what Americans need to consider, because most facilities primarily rely on private payments and Medicare does not cover the cost of assisted living facilities. It only pays for rehabilitation in a nursing home for the first hundred days. After that, the only assistance available is Medicaid. 

Medicaid coverage is supposed to kick in, only when a person has spent down all of their assets and is basically destitute.

One survey by a major financial company reports that the median monthly cost for an assisted living community is $3,750 or $45,000 a year. Long-term care by a home health aide can top $4,000 monthly or nearly $50,000 a year. 

These kinds of numbers demonstrate the need to save and plan well for retirement and for the possibility of needing to pay for assisted living. However, boomers are not at all positioned well for either retirement or assisted living. By the time people start thinking about retirement, they are usually in their 50s or 60s.

No matter when you start, starting is better than not doing anything. When you meet with your estate planning attorney, discuss how your estate is structured, in terms of paying for long-term care. Does it make sense for you to purchase an insurance policy to protect your assets and should it be owned by you or by a trust? What kind of trust?

Your estate planning attorney also is likely to have a network of professionals who help families navigate this complex world of care facilities. Understanding this system and the individual’s needs, can go a long way in making a difficult and expensive process much easier.

Reference: U.S. News & World Report (Oct. 10, 2018) “How Should I Finance Assisted Living?”

Medicaid Problems in Louisiana

It would probably come as a shock for most nursing home residents, if they were suddenly sent an eviction notice. It would be even more shocking, if the residents were all on Medicaid and the government was paying for their care. 

That is about to happen to some 30,000 nursing home residents in Louisiana, who are on Medicaid. 

The state faces a revenue shortage and the Louisiana House's budget cuts include Medicaid funding. That would mean that the state Medicaid program will no longer be able to pay for nursing home care, as of July 1. 

The notices are being sent out by law as the USA Today reports in "More than 30,000 nursing home eviction notices to be sent in Louisiana Thursday."

There is still time for the state to fix this problem. However, there appears to be an impasse between the governor and the legislature over funding. Something similar could also eventually happen in other states. 

As the population of the U.S. gets older, Medicaid expenses are growing for both the states and the federal government. Many states are looking for ways to change their programs to save money and the Trump administration has given them greater flexibility to do. 

It is not certain how far the administration will allow states to go. For example, Kansas was recently denied its request to limit the number of years a person could be on its program. However, the administration has been more amenable to imposing work requirements on recipients who are not disabled.

Reference: USA Today (May 7, 2018) "More than 30,000 nursing home eviction notices to be sent in Louisiana Thursday."

Medicaid and Long-Term Care

Medicaid is the government program that provides health care to poor people. The debate over it, often focuses on how much is being spent on poor children and poor working age people.

What is often left out of the debate, is that Medicaid also provides services to a great many elderly people.

In fact, the majority of people in nursing homes today have their care paid for by Medicaid. With potential cuts possible in the future, Medicaid reductions have implications for people who are now nearing retirement age.

This is the subject of a New York Times article titled "How the Medicaid Debate Affects Long-Term Care Insurance Decisions."

Estimates are that approximately half of the people turning 65 today, will eventually need nursing home care. Many of them can expect to need it for five years or more.

If Medicaid will not be available to pay for that care in the future, then people need to make plans for how they will pay for their care.

There are options available, such as self-funding for those who can afford it and long-term care insurance, which is very expensive.

If you have questions about your options for nursing home care in the future, consult with an elder law attorney about them. However, the future of long-term care is still uncertain and the government might find alternative ways to pay for it.

Reference: New York Times (July 14, 2017) "How the Medicaid Debate Affects Long-Term Care Insurance Decisions."

The Debate Over Medicaid Should Matter to You

Medicaid is the extremely expensive government program. It is intended to provide health care for the poorest Americans.

Medicaid is often an easy program for politicians to attack as too costly, because most Americans are not poor and do not think they will ever be poor enough to qualify for Medicaid.

Thus, when a politician talks about cutting the costs of the program, it is easy for many people to nod their heads in agreement.

The problem?

Medicaid is not that simple.

Many people who do not think they will ever need Medicaid are mistaken, as The New York Times points out in "Plan on Growing Old? Then the Medicaid Debate Affects You."

Medicaid provides health care for a substantial number of the nation's elderly.

More than 60% of people in nursing homes, have their care paid for by the program. Many more receive home health care through the program.

If you grow old and outlive your retirement funds, which is easy to do, given the costs of health care for the elderly, then you might need Medicaid to pay for your care someday.

That is not to say you should have an opinion one way or another in the debate over the program.  However, you should take a personal interest in it, because your future interests are at stake.

Reference: New York Times (June 30, 2017) "Plan on Growing Old? Then the Medicaid Debate Affects You."