Planning ahead for any unforeseen medical expenses, the Stewards purchased long term care (LTC) insurance. This thoughtful planning proved to be vitally important, because some years later Bernetta suffered a stroke that led to her needing the services of a local senior living community. While this insurance was thoughtful planning on behalf of the Stewards and vitally important in providing financial assistance for her care, after two years of residing in an assisted living community, Bernetta had depleted the funds of her policy. Turning to Medicaid became an essential decision for the Stewards.
Getting Bernetta approved for Medicaid was not something the Stewards could easily handle on their own, and reaching out to us at Berger Estate & Elder Law was the right decision. We would soon know what Bernetta’s options were and how to get her approved for benefits for her much needed care. After conducting a thorough investigation of the Stewards' assets, it was discovered, like many of the other smart decisions they had made over the years, financial planning was one of them. However, with the increasing costs of health care services, the Stewards assets were insufficient if Bernetta was to continue to live well into her 80s and 90s.
The Stewards were concerned that, like their LTC insurance, their modest joint checking account, IRAs and investments would quickly run out without Medicaid when Bernetta entered her 90s. In order to qualify for Medicaid in Kansas, applicants must need a nursing home level of care, have non-exempt resources of $2,000 or below, have income less than the cost of care and not have made any uncompensated transfers (gifts) during the 5 years prior to applying for benefits. While, their savings didn’t make the Stewards millionaires, they did disqualify Bernetta for Medicaid.
In a married couple situation, Medicaid has special rules that apply in order to prevent the well spouse from becoming impoverished by the high cost of care for the nursing home spouse. Knowing what these rules are and allowing them to work for you is essential in getting approved for Medicaid and not going broke in the meantime. After a thorough investigation, it was decided the Stewards needed to submit a division of assets and purchase a Medicaid qualified annuity, converting some of their assets over to an income source for Burt. This plan allowed Bernetta to spend down less of the Stewards' total assets in order to be approved for Medicaid. These decisions and a few others protected the Steward’s home and a significant portion of their assets from the high cost of LTC.
The plan proved successful and, after being approved for Home and Community Based Services (Medicaid), Bernetta transitioned from using her LTC insurance policy to having Medicaid pay for the care of the assisted living community she was already in. This provided Bernetta and Burt with peace of mind financially and kept her from having to make any changes with her care.
So case closed, right? Bernetta can ride off into the sunset and Burt can too, staying at home taking care of himself for the rest of his life? We all know that’s not always the case, and it certainly was not for the Stewards. Although the Stewards were able to find a comfortable scenario for Bernetta, there would be more challenging decisions ahead for the them regarding LTC.
It came time for Burt to move into the same assisted living community as Bernetta, so his physical needs could be taken care of, while being with the one he’d loved all his life. But, Burt’s scenario was different than Bernetta's, because of his own unique circumstances and needed a different type of planning.
While the division of assets protected the Stewards' home from the costs of LTC when Bernetta needed Medicaid approval, it didn’t protect the home when Burt needed similar care. Burt, knowing that he would soon be in need of care, decided to transfer their home over to one of their sons. This had been a part of Burt's and Bernetta’s dreams for much of their lives, and Burt wanted to make this decision while he still could. While transferring the house was a lifelong goal, this decision was part of a twofold solution, because it put in motion the strategy necessary to help pay for Burt’s care.
In addition to fulfilling the Stewards' lifelong desire to pass along their estate, this strategy allowed assets to be passed into the hands of the ones they trusted most. This created another source of funds for the Stewards if they needed it while being cared for together in the same community.
While transferring the home was helpful, it required that Burt undergo a different type of planning than Bernetta. Transferring one’s home in Kansas disqualifies an individual from Medicaid for up to five years. Having a long-term relationship with clients like the Stewards is such a great benefit when BEEL assists with planning for LTC. Knowing that Burt was a veteran, we also knew that he could transfer their house and still qualify for some form of assistance from the VA.
As a result of Burt’s service during the Korean War, he was able to qualify for a not well-known pension plan through the Veterans Administration. These pensions come in three different levels and through planning with us, Burt was able to qualify for the largest benefit. This veteran's pension not only paid for Burt’s care in the same assisted living community as Bernetta, but preserved their home and many of their assets for their children, who then had funds to cover any shortfall in their care coverage.
Being able to take care of families is something Berger Estate & Elder Law has been doing for over 30 years. Forming lifelong relationships in an environment that provides the highest quality of legal counsel in an atmosphere of compassion and friendship is our mission. Before you or one you love loses anymore unnecessary finances to long-term care or time with Medicaid worrying about if an approval will ever come, give Berger Estate & Elder Law P.A. a call at (913) 491-6332 or come by our offices for a free consultation.