Frequently Asked Questions

Elder Law

How much will Social Security income increase in 2017?
Social Security Income to Increase 0.3% for 2017.  One of the most common questions we are asked is, “how much will my Social Security income increase in 2017?” It has been announced that Retirement Social Security income and Supplemental Security Income (SSI) beneficiaries will receive a 0.3 percent Cost-of-Living Adjustment (COLA), beginning in January, 2017. Prior to 1975, increases to Social Security income could only be made by special legislation. To prevent Social Security income from being eroded by inflation, Congress enacted the COLA provision to begin automatic annual cost-of-living increases. The amount of these increases to Social Security income is based on a government measure of inflation. By law, the official measure used by the Social Security Administration is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). To determine the COLA for the coming year, the Bureau of Labor Statistics in the Department of Labor measures the percentage increase of the CPI-W from the third quarter of the previous year a cost-of-living increase was declared to the third quarter of the current year. If there is no increase during this time, then there can be no cost-of-living increase adjustment, as we saw in 2010, 2011, and 2016.The 2017 COLA marks the lowest increase to Social Security income since Congress enacted the COLA provision. It is estimated that the average payment for retired workers in 2017 will be $1,360 per month, while retired couples are expected to receive an average of $2,260 per month. While getting any increase is certainly an improvement after receiving nothing last year, in reality, this modest increase to Social Security income means that most Social Security beneficiaries will only receive an extra $5 per month. Unfortunately, this increase in Social Security income may be partially or completely offset by increases in Medicare premiums. For approximately 70 percent of Medicare recipients, the average 2017 Medicare Part B premium, which covers outpatient services, emergency visits, and other medical care, is expected to be $109 per month.  This is a 4 percent increase to last year’s premium of $104.90 per month.
What care options are there for my parents as they age?
There are many different care options for aging parents that you could consider; such as in-home care, assisted living communities, senior apartments, and nursing homes. Skilled and specialized care facilities exist for people with dementia or Alzheimer’s Disease. These options provide various levels of care and independence depending on the person’s health and overall needs. Factors to consider include the person’s location, mobility, ailments, medication needs, and frequency of doctor visits. The decision on the type of care your parents receive must be made based on their particular situation. Many times this decision must take into consideration financial factors since different care options vary in cost, sometimes greatly. With life expectancy increasing and the elderly being the fastest growing age demographic according to the U.S. Census Bureau, care costs are often underestimated. Nursing home care can cost several thousands of dollars each month. This is why such a decision should be made proactively and part of a loved one’s overall estate planning in order to maximize the care they deserve, while also preserving as much of their assets as possible. Whether it be, proper planning to be eligible for Medicaid, or obtaining a long-term care insurance policy, the right estate planning will ensure that your parent or loved one will be protected and cared for.
If I retire at age 62, will I be eligible for Medicare?
No. Medicare starts when you reach age Sixty Five (65). If you retire early at age Sixty Two (62), you may be able to continue medical insurance coverage through your employer or purchase it from a private insurance company until you become eligible for Medicare.
If a person receives Medicaid because he or she is disabled, can he or she stay on Medicaid, or does he or she have to apply for something else under health reform such as the healthy michigan plan?
Most residents of the state Michigan who are already covered under the current Medicaid program categories will remain in those programs and nothing about their health care insurance will change for them. If the individual is eligible for Medicaid or Medicare or both, the individual will not be eligible for the Healthy Michigan Plan. Residents of the state Michigan who are covered by the Adult Benefits Waiver program, which provides very limited Medicaid-funded care, are automatically being transitioned to the Healthy Michigan plan. In short, only those who are not covered by the current Medicaid program but believe they will become eligible under the expanded Medicaid program must apply.
My mother has been diagnosed with Dementia, our family wants to hire a caregiver, what steps do you suggest we follow to make sure we are protected?

The Department of Human Services is currently in the process of changing how they will evaluate payment(s) to a caregiver. The most important thing is to make sure that the Department Of Human Services will treat your payment as payment for caregiver services and not as a transfer for less than fair market value or in other words divestment.

To start with, the Department of Human Services has decided that relatives who provide assistance to a loved one in need of caregiver services is presumed to do so for love and affection.  Any compensation for past caregiver assistance shall create a rebuttable presumption of a transfer for less than fair market value. They consider a relative to be anyone related to the client by blood, marriage or adoption.

Any care contract or agreement between a relative caregiver or a care providing agency shall be considered a transfer for less than fair market value unless the compensation is in accordance with all of the following:

  1. The caregiver services must be performed after a written legal contract/agreement has been executed between the client and provider. The caregiver services should not be paid for until the services have been provided. The contract/agreement must be dated and the signatures between all parties involved must be notarized; and
  2. At the time of the receipt of the caregiver services, the client may not be residing in a nursing facility, adult foster care home, institution for mental diseases, inpatient hospital, intermediate care facility for mentally retarded or eligible for home and community based waiver, home health or home help; and
  3. At the time caregiver services are received, the services must have been recommended in writing and signed by the client’s physician as necessary to prevent the transfer of the client to a residential care or nursing facility. Such caregiver services cannot include the provision of companionship; and
  4. The Department of Human Services will verify the contract/agreement by reviewing the written instrument between the client and the provider which must show the type, frequency and duration of such services being provided to the client and the amount of consideration (money or property) being received by the provider, or In accordance with a service plan approved by DHS. If the amount paid for services is above fair market value, then the client will be con-sidered to have transferred the asset for less than fair market value. If in question, fair market value of the services may be determined by consultation with an area business which pro-vides such services; and
  5. The contract/agreement must be signed by the client or legally authorized representative, such as an agent under a power of attorney, guardian, or conservator. If the agreement is signed by a representative, that representative cannot be the provider or beneficiary of the contract/agreement.

Under all circumstances, Assets transferred in exchange for a contract/agreement for personal services/assistance or expenses of real property/homestead provided by another person after the date of application for Medicaid are considered available and countable assets.

Our Family hired a home health care worker for our mother with dementia, do we need to pay her overtime?

When hiring a home health care worker for a senior or a special needs individual, families need to be familiar with employment rules, even if the paid caregiver is a family member.  The federal government recently extended minimum wage and overtime protections to most home health care workers.

Under the Fair Labor Standards Act (FLSA), those who hire casual babysitters and home health care worker to provide "companionship services" to elderly persons or persons with illnesses, injuries, or disabilities are not required to pay the minimum wage or provide overtime pay.  Therefore, if clients directly hire a home health care worker whose job it is to solely keep the elderly person company (for example, taking him or her for walks, playing games, reading, or accompanying the person on errands), then FLSA protections do not apply.

However, the companionship services exemption does not apply when the home health care worker spends more than twenty percent (20%) of his or her workweek performing “care services." Care services are defined as assisting the client with activities of daily living, including dressing, feeding, bathing, toileting, transportation, light housework, managing finances, taking medication, and arranging medical care.  Home health care workers who perform tasks for the entire household and home health care workers who perform medical services are also not covered under the companionship exemption. In addition, if a home health care agency is the home health care worker's employer, the home health care agency cannot ever claim the companionship exemption.

The rules for live-in home health care workers are slightly different. If clients hire the live-in caregiver directly, they must pay thehome health care worker minimum wage but are not required to pay overtime. Third-party employers (such as health care agencies) that hire live-in workers are required to pay overtime.  Under the FLSA, to be a "live-in" home health care worker, the worker must either live at the person's home full-time or spend at least 120 hours or five consecutive days or nights in the person's home per week. Home health care workers who live with the person are not necessarily working the entire time they are at the house, and employers do not need to pay for sleep time, mealtime, or other off-duty time.

Families can hire family members as a home health care worker and the same rules apply to them as to non-family care providers. If hiring a family member, the family member must be paid overtime and minimum wage as long as family members are spending more than Twenty percent (20%) of their time on care services. However, it is very important to have a written plan of care detailing the family member's working hours and obligations, so it is clear what is work time and what is family time.

The federal minimum wage in 2016 is $7.25 per hour, but states may have higher rates. Beginning in January 2017, Michigan's minimum wage will be $8.90. Employees who are entitled to overtime pay can receive one and a half times their normal rate for every hour worked over 40 hours a week.

Regardless of who is the home health care worker, there should be a written caregiver contract detailing the home health care worker's rights and responsibilities. The elder law attorneys of Schock Solaiman Ramdayal PLLC can review these contracts to ensure families are following the law and Medicaid laws when it comes to hiring a home health care worker.

What Will You Pay for Medicare Part B in 2017?
The Centers for Medicare & Medicaid Services (CMS) has announced that in 2017, most Medicare beneficiaries (about 70%) will pay $109 per month on average for Medicare Part B. This is up from the $104.90 monthly Part B Medicare premium that has been in effect since 2013. If you fall into this group, you face only a modest Medicare Part B premium increase in 2017 because your Medicare Part B premium is deducted from your Social Security benefit, and you will be receiving only a small Social Security cost-of-living increase next year (0.3%). Due to a provision in the Social Security Act called the "hold harmless" rule, Medicare premiums for existing beneficiaries can't increase faster than their Social Security benefits. Because your Medicare premium increase is based on your actual Social Security benefit, you may pay more or less than the $109 average premium. The Social Security Administration (SSA) will tell you the exact amount of your Part B premium in 2017. Approximately 30% of Medicare beneficiaries are not subject to this provision, and may pay substantially more for Medicare Part B. You fall into this group if:
  • You enroll in Part B for the first time in 2017.
  • You don't get Social Security benefits.
  • You have Medicare and Medicaid, and Medicaid pays your premiums.
  • Your modified adjusted gross income as reported on your federal income tax return from two years ago is above a certain amount.*
The table below shows the Medicare Part B premium you'll pay next year if you're in this group.
Beneficiaries who file an individual income tax return with income that is: Beneficiaries who file a joint income tax return with income that is: Beneficiaries who file an income tax return as married filing separately with income that is: Monthly premium in 2016: Monthly premium in 2017:
$85,000 or less $170,000 or less $85,000 or less $121.80 $134
Above $85,000 up to $107,000 Above $170,000 up to $214,000 N/A $170.50 $187.50
Above $107,000 up to $160,000 Above $214,000 up to $320,000 N/A $243.60 $267.90
Above $160,000 up to $214,000 Above $320,000 up to $428,000 Above $85,000 up to $129,000 $316.70 $348.30
Above $214,000 Above $428,000 Above $129,000 $389.80 $428.60
*Beneficiaries with higher incomes have paid higher Medicare Part B premiums since 2007. To determine if you're subject to income-related premiums, the SSA uses the most recent federal tax return provided by the IRS. Generally, the tax return you filed in 2016 (based on 2015 income) will be used to determine if you will pay an income-related premium in 2017. You can contact the SSA at (800) 772-1213 if you have new information to report that might change the determination and lower your premium (you lost your job and your income has gone down or you've filed an amended income tax return, for example).

Changes to other Medicare costs

Other Medicare Part A and Medicare Part B costs will change in 2017, including the following:
  • The annual Medicare Part B deductible for Original Medicare will be $183, up from $166 in 2016.
  • The monthly Medicare Part A (Hospital Insurance) premium for those who need to buy coverage will cost up to $413, up from $411 in 2016. However, most people don't pay a premium for Medicare Part A.
  • The Medicare Part A deductible for inpatient hospitalization will be $1,316, up from $1,288 in 2016. Beneficiaries will pay an additional daily co-insurance amount of $329 for days 61 through 90, up from $322 in 2016, and $658 for stays beyond 90 days, up from $644 in 2016.
  • Beneficiaries in skilled nursing facilities will pay a daily co-insurance amount of $164.50 for days 21 through 100 in a benefit period, up from $161 in 2016.
To view the Medicare fact sheet announcing these and other figures, visit Medicare.gov.
What is an Elder Law Attorney?
If you’re looking for an elder law attorney in Metro Detroit or the surrounding areas, you’ll find the experienced help you need at Schock Solaiman Ramdayal PLLC (SSR Law Offices) . We are dedicated to providing support and assistance for senior citizens who are in need of long-term healthcare, estate planning, and other legal services. Elder law attorneys are advocates for the elderly and their loved ones. Most elder law attorneys handle a wide range of legal matters affecting an older or disabled person, including issues related to health care, long term care planning, guardianship, retirement, Social Security, Medicare/Medicaid, and other important matters.  Attorneys who practice in the specialty area of elder law bring more to their practice than an expertise in the appropriate area of law. an Elder Law attorney also has knowledge of the senior population and their unique needs as well. They are aware of the physical and mental difficulties that often accompany the aging process. Because of the broad knowledge base of an elder law attorney they are able to more thoroughly address the legal needs of their clients. Here is an example, when planning an estate, an elder law attorney should take into consideration the health of the person or couple, the potential for nursing home care and the wishes and concerns of the person or couple if that event were to occur.  A skilled elder law attorney will also help steer you into finding additional benefits that the senior or a loved one may be eligible for to help them offset the cost of long term care. Elder law covers all aspects of planning, counseling, education, and advocating for clients. Elder law attorneys can be a resource to their clients because they understand their clients needs may extend beyond basic legal services and stay informed about and connected to the local networks of professionals who serve the elder population.
How do I tell an elderly parent or loved one that it is time to stop driving?
Driving is one of the ultimate symbols of independence. Giving up that independence and control could cause an aging parent or loved one to feel trapped. Loss of control is a fear for any person. This is especially so for someone who is aging and feeling loss of control over their health. As people grow older, having conversations with them about important aspects of their lives such as driving can be very difficult. Some seniors may refuse to stop driving or even consider limiting their driving, despite recent accidents and the requests of loved ones. They may also refuse to discuss their finances or estate planning. However, these conversations are necessary for their safety and well being. That is why including an experienced and compassionate elder law attorney in these discussions gives your family the expert advice and peace of mind needed to make these important decisions.

Veteran Affairs

Is there a look back period for va benefits?
No. There is no look back period for va benefits like other government programs, such as Medicaid. The VA only looks at assets owned at the time of application. However, we are anticipating a three-year look back being implemented by the Department of Veterans Affairs sometime in the future.
For Veteran Benefits purposes, what is an incompetence Declaration?
The medical evidence submitted with your application for pension indicates your disabilities may prevent you from effectively managing your VA benefit. Upon receipt of an incompetence declaration you may choose to accept or deny the VA’s proposal. Generally, this is not a determination that we recommend appealing; however, the proposal requires a response from the claimant.
Is a Power of Attorney (POA) allowed to sign the application for benefits in place of the veteran or surviving spouse?
No. No one is permitted to sign the application for the claimant, unless the Veterans Administration has previously appointed a fiduciary. Unfortunately, the department of Veteran Affairs does not recognize a Power of attorney. Even if the claimant’s signature is very poor, it will be accepted by the VA. If the claimant cannot sign their name, he or she may mark the document with an “x”, but the signature needs to be witnessed by two people.
Can I receive the Aid and Attendance Pension if I am already receiving a service connected disability benefit?
If you are already receiving benefits from a service connected disability, you cannot also receive benefits from a non-service connected disability. However, if you apply for the pension for Aid and Attendance and are awarded more than your service connected disability benefit, the VA will pay you whichever is greater.
For purposes of the Department of Veteran Affairs Aid and Attendance pension, can the claimant use a family member caregiver?
If the veteran or claimant is rated by the Department of Veteran Affairs as qualifying for Aid and Attendance pension benefits, the veteran or claimant may use a family member caregiver.  The family member caregiver is not required today by the the Department of Veteran Affairs to be licensed by the state. However, under no circumstance may the spouse for Department of Veteran Affairs purposes  be considered a caregiver.  The VA alway considers that care provided by a spouse to be done so out of love and affection for the veteran or claimant. Additionally, in order to have the family member caregiver services count as an “Allowable Medical Expense”, the provider MUST be paid for their services.  The family member caregiver will also be required to sign an Attendant Affidavit  for the department of Veteran Affairs which certifies the services that the family member caregiver is providing and the compensation that the family member caregiver is receiving for providing said services.  Without a signed attendant affidavit, the department of veteran affairs will not consider the amount paid to the family member caregiver as a recurring monthly medical expense.
I am a veteran with benefits through the U.S. Department of Veteran Affairs veterans health care program, am i covered for puposes of the Federal Affordable (Health) Care Act?
You’re considered covered. and you do not have to do anything if you as a veteran or your dependents are enrolled in one of four programs — the veterans health care program, the VA Civilian Health and Medical Program (CHAMPVA), the spina bifida health care benefits program or TRICARE. If you’re not enrolled in a veterans health care program, you can still get coverage through the marketplace, where you may qualify for tax credits, lower deductibles and co-pays, or for free or low-cost coverage through Medicaid.
For purposes of Section 8 Housing, is the VA Aid and Attendance pension countable as Income?

Michigan Section 8 Housing Choice Voucher program provides rental assistance to income eligible families and individuals who reside in the state of Michigan.  Section 8 rental assistance is only available to citizens of the United States and legal aliens. The applicant will need to provide citizenship documents when applying for Section 8 housing assistance. The applicant's household should meet the definition of a family as defined by the program.  The applicant's household income should also be within income limits as determined by United States Department of Housing and Urban Development (HUD) to receive Section 8 housing assistance.  It should also be noted that the income limit for Section 8 housing is entirely dependent upon the location where the individual resides. Finally, all members of the applicant's household should pass a criminal background check to be eligible for Michigan Section 8 Housing Choice Voucher program.

HUD has clarified that VA Aid and Attendance Pension payments must be included as income for purposes of Section 8 housing, except portions of the benefit being used strictly for medical expenses. There is no statutory or regulatory exclusion for the VA Aid and Attendance Pension payments.  Because of this, both the full amount of periodic VA Aid and Attendance Pension payments and the full amount of periodic VA disability benefit payments are included  as income.

Owners of Section 8 housing are reminded pursuant to 24 CFR 5.609(c)(4), any money received by the family that is specifically for, or in reimbursement of, the cost of medical expenses for any family member is excluded from annual income. Because of this, the owner must verify any amount provided for VA Aid and Attendance Pension payment which is used strictly for medical expenses and exclude the verified amount.  Any portion of the benefit not being used for medical expenses must be included as income.

How much will VA Pension Income Increase in 2017?

VA Pension Income to Increase 0.3% for 2017. For veterans, their families, and their surviving spouses receiving disability compensation and pension benefits from the Department of Veterans Affairs, it has been announced that a 0.3 percent cost-of-living increase will be made to payments beginning January 1, 2017.

Periodically, VA pension income is increased to prevent it from being eroded by inflation. By law, the cost-of-living adjustments (COLA) to VA pension income rates are the same percentage as the COLA for Social Security benefits. The official measure used by the Social Security Administration to determine the COLA is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). To determine the COLA for the coming year, the Bureau of Labor Statistics in the Department of Labor measures the percentage increase of the CPI-W from the third quarter of the previous year a cost-of-living increase was declared to the third quarter of the current year. If there is no increase during this time, then there can be no cost-of-living increase adjustment, as we saw in 2016 with no increase to either Social Security or VA pension income. However, unlike Social Security, there is no automatic annual COLA increase to VA pension income. Instead, each year it takes special legislation that must be approved by lawmakers in both the House of Representatives and the Senate, and then signed into law by the President, for Veterans to receive any increase to their VA pension income. For Veterans without dependents, the new compensation rates will range from $133.57 per month for a disability rated at 10 percent to $2,915.55 per month for a disability rated at 100 percent.

The full rates provided by the Department of Veterans Affairs are available at http://www.benefits.va.gov/COMPENSATION/resources_comp01.asp. The COLA increase also applies to disability and death pension recipients, surviving spouses receiving dependency and indemnity compensation, disabled Veterans receiving automobile and clothing allowances, and other benefits.

If an ex spouse divorced the Veteran, is she still entitled to the Aid and Attendance Pension?
Generally, No. A surviving ex spouse is not entitled to benefits from the department of veteran affairs under the record of the former spouse.   However, in circumstances of extreme mental cruelty or physical abuse, the VA has been known to consider these circumstances and consider the application. However, there would have to be unquestionable evidence and documentation to support the claim of abuse. Even with this evidence, the VA may choose not to consider the application.

Lady Bird Deed and Real Estate

Can Medicaid estate recovery take my house when I die?
Maybe.  Under the Medicaid Estate Recovery program enacted here in Michigan, the Michigan Department of Community Health (MDCH) has the ability to place a claim on a Medicaid recipient’s probate estate to seek repayment of benefits received from Medicaid. This includes laying a claim for reimbursement from the recipient’s homestead property after he or she passes away. However, a vital limitation to this power is that the claim is limited only to the recipient’s probate estate. Therefore, if the home is transferred to the recipient’s heirs outside of probate, Medicaid estate recovery will be prevented from laying a claim against it.  The key is working with an experienced Elder law attorney to make sure your assets avoid probate.
I live in a nursing home, but still maintain a home. May I claim a principal residence exemption on the home I own?
The quick answer for the state of Michigan is Yes.  The individual may maintain a principal residence exemption if they are presently residing in a nursing home, assisted living or skilled care facility so long as the owner of the property manifests an intent to return to the home and so long the home is not rented to another person or for any business purpose. On March 20, 2014, Michigan Governor Rick Snyder signed Senate Bill 4810, which amended Section 211. 7cc(5) of the General Property Tax Act.  MCL 211(7)(c)(c)  The amendment to the General Property Tax Act eliminated the requirement that the individual's home not be listed for sale, in order for the owner to continue to claim the principal residence exemption (PRE) while living in a nursing home, skilled care facility or assisted living facility. The amendment for the principal residence exemption is retroactive and effective for real property taxes levied after December 31, 2012. Therefore, as of December 31, 2012, a person who previously occupied property as his or her principal residence but now resides in a nursing home, skilled care facility or assisted living facility may retain an principal residence exemption on their property if the owner manifests an intent to return to that property.  The owner does not physically have to return to the property and an owner is considered to manifest an intent to return to his home if he or she satisfies all of the following conditions:
  1. The owner continues to own that property while residing in the nursing home, skilled care facility or assisted living facility.
  2. The owner has not established a new principal residence.
  3. The owner maintains or provides for the maintenance of that property while residing in the nursing home or assisted living facility.
  4. That property is not occupied, is not leased, and is not used for any business or commercial purpose.
Does recording a ladybird deed uncap my property taxes?
Per the Michigan State Tax Commission, the creation and recording of ladybird deeds should be treated as life estates. Creation and recording of a ladybird deed will not uncap the property taxes immediately upon filing, but the Ladybird deed uncaps the property taxes when the granter dies. For purposes of this answer, to uncap the property taxes means that the taxable value of the subject property becomes the same as the state equalized value. Pursuant to MCL 211.27a(7)(c) a transfer of that portion of real property subject to a life estate or life lease retained by the transferor does not uncap the property, until expiration or termination of the life estate or life lease. Here is an example: June Cleaver Ladybird deeds her Lake Saint Clair mansion located in Macomb County to her son, Wally Cleaver, retaining a life estate in 2013. June Cleaver dies in April of 2014. The Michigan State Tax Commission says the Lake Saint Clair mansion property taxes are uncapped following the death of June Cleaver in 2014. This interpretation may seem contrary to the new amendment to the uncapping provisions. However, recent communication with the Michigan State Tax Commission has verified this example and the uncapping of the property tax assessment would apply to a ladybird deed in this situation. Further, the it was specifically stated that the uncapping will apply even considering under the recent amendments that occurred in January of 2015. The Michigan State Tax Commission’s opinion on a ladybird deed uncap of the property tax assessment argues that MCL 211a(7)(t) (this is the recent amendment mentioned above known as the “new immediate family exception”) shall not apply when immediate family member gets title to property on death of parent who held life estate. Further the property tax assessment is uncapped pursuant to MCL 211.27 a(7)(c) (termination of life estate) as (7)(c) because this the "most specific provision" that applies under the circumstances.
My wife and I own our house as husband and wife, what does this mean? what is tenancy by the entirety?

In Michigan, when a husband and wife acquire title to real property as husband and wife via the same deed or will, it is treated as if owned by the two of them as tenancy by the entirety. The most common way tenancy by the entirety is created is on a deed or will when the grantee line reads as follows: Owner conveys to William J. Clinton and Hillary Clinton, husband and wife.

A tenancy by the entirety is available only to husband and wife (this would be true under common law, we are not sure how true this statement would be treated after the 2015 Supreme Court Decision allowing same sex marriage.  Either way, the Michigan legislature has not amended the statute to state if tenancy by the entirety can be created by a married couple that is of the same sex.  At some point we are fairly confident that this will or should apply to all married couples).  Tenancy by the entirety is a form of joint tenancy.  It resembles joint tenancy in that upon the death of either the husband or the wife, the survivor automatically acquires title to the share of a deceased spouse.  Tenancy by the entirety is generally the reason why the surviving spouse does not need to probate the estate of a deceased spouse if they only own a home and they own it as husband and wife.

Either spouse, acting alone, cannot convey real property held in tenancy by the entirety. The real property must be transferred by the husband and wife, acting in concert. As mentioned, there is an exception to this rule: One spouse may convey the real property to the other spouse, thereby destroying the tenancy by the entirety. The tenancy by the entirety will also be destroyed by death, or divorce.

MCL Chapter 557 - PROPERTY OF HUSBAND AND WIFE

What is a Lady Bird Deed?
Lady Bird Deed

Lady Bird Johnson

The Lady Bird deed presumably acquired its name after President Lyndon B. Johnson used this type of deed to convey land to his wife, “Lady Bird” Johnson. Lady Bird deeds are primarily used to avoid the probate of real estate, but they can be used to transfer other assets like tangible personal property such as household furnishings.  When used in long-term-care Medicaid planning, the Lady Bird deed offers the additional benefit that its execution is not considered a divestment for Medicaid purposes, even though it transfers ownership of property at death without probate. A Lady Bird deed is merely a style of either a warranty deed or a quitclaim deed.  When you as a landowner sign a Lady Bird Deed, you convey your home to yourself, but you reserve the power to sell, mortgage, gift (or otherwise transfer) your home during your lifetime. If you don’t convey your home during your lifetime, the Lady Bird Deed identifies who receives your home after you die. This can be one or more individuals, or it can be a trust. An additional benefit for using a ladybird deed is that the default beneficiary receives the property at the grantor’s death (remember, the grantor is both the donor and donee), it is included in the grantor’s gross estate and thus receives a basis step-up.  Pursuant to Internal Revenue Code Section 2033 The real property conveyed by the ladybird deed is included in the grantor’s gross estate because it is considered property in which “the decedent had an interest as of the date of death. A Lady Bird Deed can be a great estate planning strategy to see whether the use of a this type of deed makes sense with your estate plan (it almost always does), contact SSR Law Office today and take advantage of our complimentary consultation.
In Michigan, what are the benefits of a Lady Bird Deed?
1. A Lady Bird Deed will avoid probate. The property you own will go directly to whom you want it to go to, without getting the Michigan probate court system involved. 2. A Lady Bird Deed is Medicaid friendly. Contrary to popular belief, if your home is in a trust, it is “countable” for Medicaid purposes. A Lady Bird Deed will avoid this problem, and the execution of one is not considered “divestment” for Medicaid purposes. 3. Lady Bird Deeds are tax friendly. Since there is no “gift” during your lifetime (the transfer only occurs at death), the person receiving the property gets what is known as a “step up in basis”. In short, there may be no income tax on the sale of your property after you die. 4. A Lady Bird Deed Avoids Michigan Estate Recovery. (Today) After you die, Michigan’s estate recovery law allows the government to take your home under certain circumstances if you received Medicaid benefits during your lifetime. A Lady Bird Deed is a great tool to avoid estate recovery. 5. You don’t give up any control. You can still do whatever you want with your property during your lifetime. And you can change it or take it back at any time.

Estate Planning

What is a Durable Power of Attorney?
A durable power of attorney is a power of attorney by which an individual designates another as the principal’s agent in a writing that contains the words “This power of attorney is not affected by the principal’s subsequent disability or incapacity, or by the lapse of time”, or “This power of attorney is effective upon the disability or incapacity of the principal”, or similar words showing the principal’s intent that the authority conferred is exercisable notwithstanding the principal’s subsequent disability or incapacity and, unless the power states a termination time, notwithstanding the lapse of time since the execution of the instrument. A durable power of attorney shall be dated and signed voluntarily by the individual or signed by a notary public on the principal’s behalf. The durable power of attorney shall be 1 or both of the following
    • Signed in the presence of 2 witnesses, neither of whom is the attorney-in-fact, and both of whom also sign the durable power of attorney
    • Acknowledged by the principal before a notary public, who endorses on the durable power of attorney a certificate of that acknowledgment and the true date of taking the acknowledgment.
What can the Agent under a Durable Power of Attorney do?

In the state of Michigan, an agent designated and acting under a Durable Power Of Attorney has the authority, rights, responsibilities, and limitations as provided by law including, but not limited to, all of the following

      • The agent shall act in accordance with the standards of care applicable to fiduciaries exercising powers under a durable power of attorney.
      • The agent shall take reasonable steps to follow the instructions of the principal.
      • Upon request of the principal, the agent shall keep the principal informed of the agent’s actions. The agent shall provide an accounting to the principal upon request or to a conservator or guardian appointed on behalf of the principal upon request or pursuant to judicial order
      • The agent shall maintain records of their actions on behalf of the principal, including transactions, receipts, disbursements, and investments.
      • The agent may receive reasonable compensation for the agents’s services if provided for in the durable power of attorney.

The agent under a durable power of attorney shall not gift all or any part of the principal’s assets, nor create an account or other asset in joint tenancy between the principal and the agent unless provided for specifically in the power of attorney or by order of a judge. In the event the agent acts inappropriately, they may be liable for any damage or loss to the principal.

Most importantly before exercising authority the agent under a durable power of attorney,  shall execute an acknowledgment of the attorney-in-fact’s responsibilities.

Do I give up any rights when I execute a Durable Power of Attorney?
No. Signing a Durable Power of Attorney allows you to appoint an agent that will have the power to exercise the rights that you provide for in the power of attorney document. For example, if you permit it, the agent can withdraw money from your bank account or write checks from your bank account. Because nothing in a power of attorney deprives you of these rights, you have not surrendered any rights.
Can I change a Durable Power of Attorney or Designation of Patient Advocate after I sign it?
Yes. The individual granting the power or powers to an agent can change a Durable Power of Attorney or Designation of Patient Advocate at any time. As the person appointing an agent, you can change the person that you designated as the attorney-in-fact or agent, add or subtract powers that the agent you appointed is allowed to assist you with or revoke the document in its entirety. However, you must notify your attorney-in-fact or agent of the changes. If you modify or change your Durable power of attorney or designation of Patient advocate it would be wise to alert other people such as your physician, your banker or other financial adviser to avoid confusion.
Can I disinherit a Child?
The quick answer is yes. There could be any number of reasons why an individual may want to disinherit a child. If you plan to disinherit a child, or for that matter leave him or her less than what they believe they should receive, it is crucial to have prepared an estate plan. The professionals of SSR Law office can help you accomplish this desire. First of all, you need to state in your Estate Plan (last will and testament, trust), that you are intentionally disinheriting a child as a beneficiary. In most cases, you don't have to give a reason why, and SSR Law Offices suggest you do not. The proper wat to accomplish this is to indicate that you are not forgetting your child, but are intentionally omitting him or her as a beneficiary. By doing this, they will not be able to legally claim that they were accidentally left out as a beneficiary of your estate plan. The professionals of SSR Law Office are commonly asked, as a way of acknowledging the child, in our estate plan we should leave him or her One Dollar ($ 1.00). This is generally not good advice, for several reasons.
  1. Leaving the child, you intend to disinherit any amount automatically gives him the legal right to obtain information about your estate or trust, without even having to file a lawsuit.
  2. A One Dollar ($ 1.00) gift must be delivered to the child and a receipt of distributive share would need to be signed by the child. If a receipt of distributive share cannot be obtained, the One Dollar ($ 1.00) gift will have to be filed with the county treasurer and held for the beneficiary. These procedures will almost always incur additional costs, create delays, and cause unnecessary headaches for your Personal Representative or Trustee. Further, costing your estate money, creating delays and annoying your Personal Representative or Trustee is exactly what many disinherited children have in mind.
Is it true that trusts are only for the wealthy?
No.  One of the biggest misconceptions is that Trusts are only for wealthy people.  Everyone needs some form of estate planning documents or education on what is right for them.  Once we sit down and discuss what your goals are beyond the grave, we can start discussing what legal documents get you what you want in the most effective way.  Clients often have similar goals, for example many want to avoid probate, protect their homes, protect their liquid assets from increasing medical costs, control beneficiary distribution, or maybe even ensure that special needs children receive their inheritance without losing their current benefits.  Whatever your goal, there are legal documents to achieve it.  The bottom line is the amount of money you have in the bank does not always dictate whether or not you need a trust.
When should I review estate plan documents?
While there is no specific detailed rule as to when to review estate plan documents, you and your estate planning attorney should review estate plan documents periodically to make sure the documents are still accomplishing the goals and desires you set out when they were created. We would suggest you review estate plans annually or any time you experience a life changing event. SSR Law offices recommends that the following should be considered when reviewing your estate plan:
  • Change in Personal Circumstances. Such changes include the marriage, divorce, or remarriage of you and/or your children, death or the disability of a beneficiary, or marriage of a child to an untrustworthy spouse, the birth of an additional family member, a new diagnosis from your doctor, your own disability or inability to continue work, retirement of you or a beneficiary.
  • Change in Assets. This includes any changes in income or assets, including receipt of an inheritance or substantial gift. Titling of assets is important. If new assets are acquired, it is important to review whether they should be in the name of the husband, the wife, or in a living trust for either or both of the spouses.
  • Beneficiary Designations. Beneficiary designations should be reviewed on an annual basis. Life insurance, annuities, and retirement plans do not pass under a Will or a Revocable Trust, but pass by beneficiary designation. If the designation is incorrect, your estate plan could be defeated.
  • Fiduciaries: Annually review the persons you have designated as Personal Representative, and Successor Personal Representative, Trustee and Successor Trustee, Health Care Representative and Successor Health Care Representative, Agent under Power of Attorney and Successor Agent under Power of Attorney. Has your relationship with any of these people changed? Are the named persons still willing and able to perform their duties?
  • Changes in Law that Affect your Estate Planning: rarely does a year go by without some change, major or minor, in laws that affect estate planning. By reviewing your estate plan annually, compliance with new laws can be assured.

Special Needs Planning

For purposes of social security payments, what is a representative payee?
A representative payee is an individual or organization appointed by the Social Security Administration to receive Social Security and/or SSI benefits for someone who cannot manage or direct someone else to manage his or her money. Generally, the Social Security Administration looks for family or friends to serve as representative payees.  The main responsibilities of a payee are to use the benefits to pay for the current and foreseeable needs of the beneficiary and properly save any benefits not needed to meet current needs. A representative payee must also keep records of expenses. When SSA requests a report, a payee must provide an accounting to SSA of how benefits were used or saved. Remember for purposes of social security, having a power of attorney, being an authorized representative or having a joint bank account with the beneficiary is not the same thing as being a payee. These arrangements do not give legal authority to negotiate and manage a beneficiary's Social Security and/or SSI payments. In order to be a payee a person or organization must apply for and be appointed by SSA.
How do I become a representative payee?
In order to become a representative payee, you should contact the Social Security Administration office nearest you to apply. You must then submit an application, form SSA-11 (Request to be selected as payee) and documents to prove your identity. You will need to provide your social security number or if you represent an organization, the organization's employer identification number. SSA requires you to complete the payee application in a face-to-face interview (with certain exceptions).
What’s the maximum Supplemental Security Income (SSI) payment for 2017?
Maximum Federal Supplemental Security Income (SSI) payment amounts increase with the cost-of-living increases that apply to Social Security benefits. It has been announced that Supplemental Security Income (SSI) beneficiaries will receive a 0.3 percent Cost-Of-Living Adjustment (COLA), beginning January, 2017. The new monthly maximum Federal Supplemental Security Income (SSI) payment amounts for 2017 are as follows:
  • $   735 per month for an eligible individual;
  • $1,103 per month for an eligible individual with an eligible spouse; and
  • $   368 per month for an essential person.
In general, monthly amounts for the next year are determined by increasing the unrounded annual amounts for the current year (in 2016, $8,804.43 for individuals, $13,205.18 for couples, and $4,412.31 for essential persons) by the COLA effective for January of the next year (0.3 percent increase for 2017). The new unrounded amounts (in 2017, $8,830.84 for individuals, $13,244.80 for couples, and $4,425.55 for essential persons) are then each divided by 12 and the resulting amounts are rounded down to the next lower multiple of $1 ($8,830.84÷12=$735.84, which is rounded down to $735 per month for individuals, $13,244.80÷12=$1,103.73, which is rounded down to $1,103 per month for couples, and $4,425.55÷12=$368.79, which is rounded down to $368 for essential persons). It is important to note that Supplemental Security Income (SSI) payment amounts will be reduced by the beneficiary’s countable income. The Social Security Administration considers countable income to be any funds received during a calendar month that can be used to meet the beneficiary’s needs for food and shelter. This income may be received in cash, such as a paycheck, or in-kind.  In-kind income is not cash but is payment by providing food or shelter directly, or is something that can be used to get food or shelter. The amount of countable income earned in a month is subtracted from the monthly Supplemental Security Income (SSI) payment. For example, if an individual earns $200 in countable income for the month, the Supplemental Security Income (SSI) payment would be reduced to $535 for that month ($735-$200=$535). In the case of an eligible individual with an eligible spouse, the amount payable is further divided equally between the two spouses. The general rule for Supplemental Security Income (SSI) payment is the more countable income you have, the less your Supplemental Security Income (SSI) payment will be. If your countable income is over the allowable limit, you cannot receive Supplemental Security Income (SSI) benefits. However, there are several income exclusions so some of your earned income may not be considered countable income for your Supplemental Security Income (SSI) payment.
What income may not count for SSI purposes?
For SSI purposes, the general rule is the more countable income you have, the less your SSI benefit will be. If your countable income is over the allowable limit, you cannot receive SSI benefits. Some of your income may not count for SSI purposes.  The following are examples of payments or services that social security may not count as income for SSI purposes include but are not limited to: • the first $20 of most income received in a month; • the first $65 of earnings and one–half of earnings over $65 received in a month; • the value of Supplemental Nutrition Assistance Program (food stamps) received; • income tax refunds; • home energy assistance; • assistance based on need funded by a State or local government, or an Indian tribe; • small amounts of income received irregularly or infrequently; • interest or dividends earned on countable resources or resources excluded under other Federal laws; • grants, scholarships, fellowships or gifts used for tuition and educational expenses; • food or shelter based on need provided by nonprofit agencies; • loans to you (cash or in–kind) that you have to repay; • money someone else spends to pay your expenses for items other than food or shelter (for example, someone pays your telephone or medical bills); • income set aside under a Plan to Achieve Self–Support (PASS). • earnings up to $1,750 per month to a maximum of $7,060 per year (effective January 2014) for a student under age 22. • the cost of impairment–related work expenses for items or services that a disabled person needs in order to work. • the cost of work expenses that a blind person incurs in order to work.  See the SSI Spotlight on Special SSI Rule for Blind People Who Work. • disaster assistance;the first $2,000 of compensation received per calendar year for participating in certain clinical trials; • Refundable Federal and advanced tax credits received on or after January 1, 2010; and • certain exclusions on Indian trust fund payments paid to American Indians who are members of a federally recognized tribe. For additional information on what income may not count for SSI purposes make sure to check out the understanding supplemental security income home page.  
What is a Third Party Special Needs Trust
A third‐party Special Needs Trust is a trust set up for the benefit of an individual with a disability by a donor other than the beneficiary to hold assets to which the beneficiary never had any legal entitlement in the first place. The word “donor” is used here to designate the individual establish and funding the trust. This person maybe referred to as the “grantor” or “settlor” or “trustor” of the trust. These are typically set up by parents, grandparents, or other family members, as part of their estate plan, to hold the beneficiary’s share of their estates. A properly drafted third‐party Special Needs Trust will not affect the beneficiary’s ongoing eligibility for means‐tested benefits, and does not need to include any provision to repay the state upon the beneficiary’s death. A third party Special Needs Trust may be a testamentary trust, meaning it is part of the donor’s Last Will and Testament, or an inter vivos trust, which is a legal entity at the time it is created, even if it is not be funded until the donor’s death. A stand‐alone third party Special Needs Trust for a disabled individual allows lifetime gifts and testamentary dispositions to be made by all members of the individual’s family without impacting the beneficiary’s government benefits. Appropriate language for designating the trust as a beneficiary can be provided to all family members who may want to fund the trust. Another common use is In divorcing families with a disabled child.  The divorcing parents can coordinate the parents’ separate estate plans to protect that child’s government benefit eligibility is important, and is often accomplished by a stand‐alone supplemental third party special needs trust for the child to which both parents can contribute.
I get Supplemental Security Income (SSI) because I am elderly and have no income. My sister recently died and left me the money she had in a savings account. Will this extra money affect my SSI benefits? Will my SSI payments stop?
The money that you inherited from your sister is considered income for you in the month that you receive it.  This could make you ineligible for Supplemental Security Income (SSI) in the month that the inheritance is received.  This determination will certainly depend on the amount of the inheritance that you receive from your loved one.  If you keep the money from the inheritance into the following month, the inherited money then becomes a part of your resources.  You cannot have more than Two Thousand Dollars ($2,000) in resources and continue to remain eligible for Supplemental Security Income (SSI) or Medicaid benefits  (Three Thousand $3,000 for a couple).
What is a special needs trust?
A special needs trust is a trust which is created for the purpose of protecting those benefits meant for physically or mentally disabled individuals. The increasing number of people with disabilities highlights the increasing need for the creation of a special needs trust. According to the advocacy organization Autism Speaks, 1 in 88 children (including 1 in 54 young boys) have autism. That is a 10-fold increase in only 40 years. A properly planned special needs trust will ensure a disabled person continues to receive crucial government benefits such as Medicaid and Social Security’s Supplemental Security Income payments. An special needs trust will also protect the proceeds a disabled person is entitled to from a personal injury or auto accident settlement. a Special needs trust maybe particularly valuable for parents who want to guarantee that their child will be cared for after they pass away. A special needs trust drafted by an experienced estate planning attorney will ensure that a disabled person can have both their short and long-term needs met.

Medicaid \ Nursing Home Planning

What is a patient pay amount?

The patient pay amount for medicaid recipients is the monthly amount of a person's income which Medicaid considers available for meeting the cost of hospital or long term care services.  All of the individual's monthly income is included in the patient pay amount calculation.  This includes the individual's social security income, any pension income that they may receive, regardless of the source of that pension income and any veterans benefits that they may receive.  Medicaid reduces its payment to the hospital / Long Term Care facility by the patient pay amount.

The Medicaid patient pay amount is usually equal to the resident’s income, less

(1) a $60 per month personal needs allowance,

(2) the cost of any health insurance premium covering the resident.  this would include the premium that you are required to pay for Medicare and for any type of private health insurance;

(3) guardianship fees, if any; and

(4) if you are married, possibly an amount for living expenses fou your spouse at home, depending on the amount of your spouse's income.

Here is an example of a single person patient pay amount calculation: Income and Patient Pay Amount Calculation: Social Security Benefit                       $ 1,678.90 General Motors Pension                    $ 1,807.28 Total Monthly Income                         $ 3,486.18 Less Personal Allowance                              $    60.00 Medicare                                              $  104.90 Health Ins.                                            $  122.86 Guardian Fee                                      $     60.00 Monthly Patient Pay Amount               $ 3,138.42 In the example above, the individual receiving medicaid benefits would be responsible for paying $3,138.42 each month from their monthly income as their portion of the cost of their long term care.      
My single son has a CD with his social security number on it, but my name is on it as well in case something happens to him. I am 77, and if I have to go into a nursing home and apply for Medicaid, can the government take those funds for my care, or is my son safe to leave me on the account?
If you were to go to a nursing home and have to apply for benefits from Medicaid, you would be presumed to be the owner of the account and have to spend the funds on your care before Medicaid benefits would kick in.  So in a way the government can take those funds for your care.   This is a presumption and can be disproved with evidence that the account belongs only to your son. However, the burden of proving this would be on you. It is probably safer for your single son to remove your name from the account and to appoint you as an agent under his durable power of attorney so you can step in if ever necessary.
What is Medicaid and what does it cover?
Medicaid is an assistance program for certain health care needs that is primarily administered by the individual states. It is different than Medicare, although some people have both. Medicaid covers certain services that Medicare does Not, such as long-term care in a nursing home and also some medically necessary dental care. Medicaid typically does not automatically cover prescription drugs, which are instead covered by Medicare’s “Part D” benefit. Medicaid eligibility is based on a person’s income and assets, and serves people of every age. Medicaid enrollees typically do not pay any costs for covered medical expenses, but in other instances, a premium and/or co-pay is necessary depending on the state you live in. In 2012, 72.6 million people were receiving Medicaid benefits and according to the Center for Medicare and Medicaid Services, Medicaid will pay for 20 percent of all health care expenditures by 2020. While Medicaid covers many needs, eligibility is based on several, strict factors. There will be a careful review of a person’s income and assets, and whether assets have been transferred over a period of several years. Proper estate planning well ahead of time can allow for a parent or loved one to be eligible for Medicaid when the time comes for them to receive care, including when they need to enter a nursing home. A study released in April 2013 by Genworth Financial found that the median annual cost of private nursing home care is $83,950, a 24% increase in just five years. Few people can afford this cost out of pocket. That is why proper planning is crucial for ensuring a loved one receives quality care while not draining their hard-earned savings and assets. An elder law attorney is best able to discuss a person’s long-term care needs, whether Medicaid is the proper option, and the steps needed to qualify for such benefits.
What is Medicaid spend down?

Many individuals who apply for Medicaid find that they possess too many assets to qualify.  Medicaid is a “needs-based” program, and a successful Medicaid applicant must have insufficient assets to pay for one’s own long term care. Federal law establishes a benchmark for the amount of resources an individual may own to qualify for the program.

Medicaid spend down is the process of reducing an applicant’s (or a couple’s) countable assets to the level at which the applicant will be asset-eligible to receive Medicaid benefits. One misconception is that the only way to reduce the value of one’s assets is to spend them on the Medicaid applicant’s medical care. In reality, there are a wide range of expenditures that will reduce the value of the applicant’s estate that will enable Medicaid eligibility.

Some of these expenditures that can be made as part of a medicaid spend down include: paying legitimate debt such as a mortgage, an auto loan or a credit card; prepaying for one's funeral; purchasing a burial plot for yourself, your spouse, your children; purchasing non countable assets; A Medicaid applicant can also make any needed payments to maintain or improve a non-countable asset, an example would be repairing or replacing the roof of one's home, installing a wheelchair ramp or buying a new appliance such as a refrigerator; it is also possible in some circumstances to purchase an immediate annuity for the benefit of the spouse if married. 

Successfully completing a medicaid spend down in compliance with the medicaid rules is a complex process.  SSR Law office has successfully instructed a countless number of families on spending their assets in order to gain medicaid eligibility and strongly encourage you to meet with one of our skilled elder law attorneys to guarantee you do not run afoul of the rules.

 
What is the Medicaid look back Period?
The Medicaid look back period is the time period immediately preceding the filing of an application for Medicaid benefits. Applicants can and may be questioned about transfers of assets within the Medicaid look back period.  The Medicaid look back period for most states including the state of Michigan is Sixty (60) months prior to the baseline date for all transfers of assets made after February 8, 2006. to help illustrate how it works, if the applicant applied for Medicaid benefits on September 1, 2014, the look back period would be from September 1, 2009 until August 31, 2014. When the client applies for Medicaid benefits any gifts or transfers of assets for less than fair market value made within the Medicaid look back period, five years (60 months) of the date of Medicaid application are subject to penalties. It is generally irrelevant to whom the transfers for less than fair market value are made to.  In other words they are not just looking at transfers made to family members. Any gifts or transfers of assets made greater than 5 years (sixty months) of the date of application are not subject to penalties and are considered to be completed gifts for medicaid purposes. For purposes of the Medicaid look back period, the Baseline Date is the first date that the client was eligible for Medicaid and is one of the following:
  • The client is In a Long term care facility
  • the client is approved for the Medicaid Waiver program
  • The Client is eligible for home health services; or
  • The client is eligible for home help services
The client’s baseline date, for purposes of the Medicaid look back period will not change even if one of the following events happens:
  • The client leaves the Long term care facility.
  • The client is no longer approved the medicaid waiver program;
  • The client no longer needs home help services; or
  • The client no longer needs home health services.
I have a reverse mortgage on My Home, Is the income countable for Medicaid Purposes?
Effective July 1, 2016, payments received from a reverse mortgage are a non-countable resource (asset) in the month of receipt and a countable resource (asset) if retained in the following months. Payments received from a reverse mortgage are not countable as income in any month. The resource (asset) limit for SSI related Medicaid is $2000.
Reverse Mortgage

Henry Winkler

To illustrate this concept, you receive Two Thousand, Five Hundred Dollars ($2,500.00) in the month of June from your reverse mortgage that Henry Winkler helped you find.  You spend three hundred dollars ($ 300.00) on groceries, clothing and pet supplies in the month of June.  You also have One Thousand Dollars in your checking account which is your sole account.  You retain Two Thousand, Two Hundred Dollars from your June reverse mortgage payment as the month of July begins.  The Two Thousand, Two Hundred Dollars remaining from the June reverse mortgage payment  is a countable asset for the month of July and you would be ineligible for Medicaid benefits in the month of July unless you spent your assets below the Two Thousand Dollar ($ 2,000.00)  resource limit. Do not forget the checking account, The asset limit would also include the One Thousand Dollars ($ 1,000.00) in the checking.  Therefore, the total you would need to spend to regain Medicaid eligibility is One Thousand, Two Hundred and One Dollars $ 1201.00.  By spending that amount you would be one dollar below the Two housand Dollar asset limit.
I own an annuity, can an annuity disqualify me from medicaid benefits?

Annuities are one of the most popular investment vehicles available for seniors and retirees. An annuity is an insurance policy providing for monthly or periodic payments to the insured that began at a fixed date and continue for a defined period.  In our practice, we find that many seniors own old annuities that are non-Deficit Reduction Act of 2005 compliant and ownership of the old annuity may prevent the senior from qualifying for Medicaid. If the annuity does not meet the requirements as outlined in the Deficit Reduction Act of 2005 the client will never qualify for Medicaid even though they may meet the other requirements.

The requirements under the Deficit Reduction Act of 2005 are as follows:

  1. The annuity must be irrevocable.
  2. The annuity must be non-assignable,
  3. The annuity must be actuarially sound
  4. the annuity must make equal monthly payments, and
  5. the annuity must name the state as the beneficiary with exceptions for married individuals

There are solutions, Most annuities allow the owner to change parties related to the contract, most notably, the owner, and beneficiary.  This allows companies such as J.G. Wentworth to purchase the annuities on the secondary market for cash.  In order to qualify for Medicaid, typically an individual must be down to Two Thousand Dollars ($ 2,000.00) or less in assets.  Thus, if they have an annuity that is not Deficit Reduction Act of 2005 compliant, the annuity will have value above the Two Thousand Dollars ($ 2,000.00) limit which will result in preventing the person from being able to qualify for Medicaid.

If you have concerns about an annuity you or a loved one own and that individual may need long term care in the future, the professionals of Schock Solaiman Ramdayal PLLC (SSR Law Offices) will be more than happy to meet with you to discuss solutions to the non compliant annuity.

 
My parents are in good health currently. They will not need to go into a nursing home, right?
With advances in medicine, older Americans are fortunately living longer and are living more active lives. However, it is also likely that as they get older they will suffer illness and other negative effects of old age. For example, according to the Centers for Disease Control and Prevention 1 out of 3 adults age 65 or older fall each year. Unexpected diseases or accidents like a fall at home can quickly and drastically change a loved one’s physical and mental health. These illnesses can be costly and more importantly limit an elderly parent’s ability to care for themselves. This includes their ability to shop, clean, bathe, or even eat. The cost of then caring for that person, even with in-home care, can be astronomical. That is why proper, pro-active planning such as obtaining a long-term care insurance policy or Medicaid planning for nursing home care benefits is always important. This type of detailed nursing home planning requires an experienced elder law attorney who understands the law and what is needed to protect your loved one and their assets.
If my spouse goes into a Nursing Home, as a community spouse will I lose my house?
No. It is very important to understand that as a “community spouse,” you will not lose or be forced to sell your home. When determining eligibility for Medicaid, there are a number of assets that are not counted, which include: your marital home, household items and personal property, your vehicle, and certain burial expenses, if properly made in advance. In addition to these exemptions, as a married couple, federal law allows you to retain half of the marital assets (such as bank accounts, retirement accounts, etc.) with a combined value up to $117,240, as of 2014. Further, you will be allowed to retain a certain amount of your monthly income, known as the “minimum maintenance needs allowance,” to use for your own purposes. In 2014, the minimum income allowance for a community spouse is $1,939, although this figure may be raised depending on the specific needs of the community spouse. The key is that the spouse who remains in the home will not be left with nothing to live on if his or her spouse needs long term care in a nursing home. If you or one of your parents is in the position of the “community spouse,” you should immediately consult an elder law attorney for guidance and advice in maximizing the quality of life of both the nursing home resident and the community spouse. There are techniques that can be used to protect the entire martial estate in the event that one spouse is in the nursing home. Whether you will be making the Medicaid application in two months or two years, it is never too soon to begin planning.

Probate

In my will or trust, What is a right of representation distribution?
The process of distributing property in intestacy can get rather complicated. The process of distribution is relatively straight forward if someone dies and all of their children are still alive. It gets considerably more difficult, when one of the deceased’s children is no longer alive. In that case, the deceased’s grandchildren are generally entitled to some amount of the deceased’s estate. Some states follow right of representation distribution (also known as per stirpes distribution). Under this method, the grandchildren basically stand in for their deceased parent. Here is an example, Suppose that Mr. Smith has a son and daughter. Mr. Smith’s daughter, in turn, has two children of her own. When Mr. Smith dies, his daughter has already passed away, meaning Mr. Smith is survived by his son and his grandchildren on his daughter’s side (it doesn’t matter if Mr. Smith’s son has children of his own, because the son is still alive and there is no need to go down to a younger generation. Assuming Mr. Smith did not have a spouse, his son and daughter would each be entitled to ½ of his estate. Thus, Mr. Smith’s son would get his ½of the estate, and the daughter’s children would split the other ½of the estate, each ending up with ¼ of the estate. One of the biggest problems with this method of distribution is that different people in the same generation may be treated differently. For example, suppose that Mr. Smith’s son also died before Mr. Smith, and that his son had one child of his own. The son’s child would be entitled to Mr. Smith’s ½of the estate, and the daughter’s children would be entitled to her ½ of the estate. But the daughter’s children have to split that ½of the estate, meaning that they each have ¼ of the estate, while their cousin (who is the same generation as them) has ¼ of the estate. A situation such as this can garner a lot of anger and resentment within families.
What is the difference between a Durable Power of Attorney and a Guardian or Conservator?
Here are the main differences between a durable power of attorney and a guardian or conservator: A durable power of attorney is a written authorization in which a person appoints another to represent or act on their behalf as their agent, for financial or health decisions, or both. A guardian is a person who has been appointed by the court to have control and the legal authority for the personal care, well being and medical treatment of another person. They deal specifically with non-financial decisions. A guardianship may be needed if a person is a minor child, is incapacitated or has special needs and is not able to execute a power of attorney or designation of patient advocate. A conservator is appointed by the court to be responsible for the protection and management of the financial affairs (or estate) of a person that has been deemed incapable of making informed or sound decisions. A conservator may be needed if a person is a minor child, is incapacitated or has special needs and is not able to execute a power of attorney.
What documents should be filed with the probate court for commencement of proceedings as a creditor?
The filing of an application or petition as a creditor for the appointment of a personal representative should not differ as to the documents needing to be filed from the filing for a personal representative when the individual is an interested person other than a creditor. Both MCL 700.3301 (informal appointment) and MCL 700.3414 (formal appointment) allow interested persons to petition. A creditor is defined as an interested person. No distinction is made between a creditor and other interested persons concerning the filing process.
In a decedent’s estate, what is a personal representative?
A Personal Representative is the fiduciary who is in charge of settling a deceased person's estate. Generally, they are appointed to act in that role by a probate court judge. In the state of Michigan, the definition of a personal representative includes the following but is not limited to: an executor, executrix, administrator, successor or special personal representative, and any other person, other than a trustee of a trust who perform substantially the same function under the law governing that persons status. A personal representative has the same power over the title of estate property that an absolute owner would have over that property. The probate court does not supervise the personal representative in the administration of the estate except in limited circumstances.
I was named personal representative of my father’s estate and was asked to file an inventory. What is an inventory?
For purposes of a decedent's estate, the inventory is a detailed list of all assets owned by the decedent at the time of death.  The inventory needs to be filed or presented to the probate court within ninety one (91) days after appointment as personal representative or at such other time as specified by local court rule.  The inventory shall list each item owned by the decedent, including its fair market value as of the date of death.  These items listed on the inventory should only be items subject to probate administration in the state of Michigan.  As an example, real property owned in Florida should not be included on the inventory.  The inventory shall also include the type and amount of any encumbrance that may exist as it relates to each item listed.  This is important and valuable because currently outstanding debt on real property is subtracted in calculating the value of real property for probate inventory fee purposes. After filing or presenting the inventory to the probate court, the personal representative shall send a copy of the document to all presumptive heirs or devisees and to all other interested persons who request it.  Other interested persons who may request a copy of the inventory include creditors of the estate. The personal representative has a duty to update and or correct an inventory.  If property not included in the original inventory comes to the knowledge of the personal representative, or if the personal representative learns that the value listed on the original inventory is erroneous or misleading, the personal representative shall file a supplemental inventory correcting the market value as of the date of death or adding the item originally not included.  The personal representative then shall furnish copies of the supplemental inventory to the persons interested in the new information. An inventory is also required when one is appointed as conservator for a protected individual and needs to be filed within fifty six days of the appointment as conservator.
Proposed new changes on the appointment of Guardians and Conservators in Michigan
On April 15, 2015 State Senator Rick Jones (R-Grand Ledge) sponsored Senate Bill 270;  This is a bill that seeks to make changes to the ability of probate judges on the appointment of guardians and conservators here in the state of Michigan. Specifically the bill amends sections of EPIC to itemize criteria for whom a judge may appoint as a guardian or conservator in Michigan. In order to be considered by the judge for appointment of guardians and conservators, the individual must either reside in Michigan or be present in Michigan and have a "significant connection” to Michigan. In determining the extent of a "significant connection," the court would have to consider the following factors:
  • The wishes of the individual;
  • The location of the individual's family and other interested persons;
  • The length of time the individual was present in the state and the length of any absence;
  • The location of the individual's property;
  • The extent to which the individual has ties to this state such as voting registration, state tax return filing,vehicle registration, driver license, social relationship and receipt of services;
  • Any other factor the court considers relevant.
The bill was reported from the Senate Judiciary Committee on April 29. It now awaits action on the State Senate floor.
When I die, do my assets have to go through the probate court before my heirs receive anything?
When an individual properly plans their estate, a decedent’s assets likely would not need to go through probate court AT ALL. With the proper use of beneficiary designation forms, deeds, trusts, and/or other methods, a person’s assets can likely be passed on to heirs without the probate court ever being involved. The avoidance of probate court saves time and expense for your heirs. a properly created and funded estate plan also has the added advantage of usually stopping creditors that existed at the time of your death from making claims against assets. A skilled estate planning or elder law attorney would be best equipped to assist you in the proper planning that is needed to maximize the assets your heirs will receive.
My mom recently died, the only asset she owned as of the date of death was her car, does the family need to open up an estate in the Probate Court?
No. The family will not need to open up an estate in the local Probate Court. If a decedent dies with no probate assets (i.e., owns nothing in their name alone) except for one or more motor vehicles whose total value is not more than Sixty thousand Dollars ($60,000.00), title to the vehicles can be transferred by the Secretary of State without opening an estate in the Probate Court. This entire procedure is done at a Secretary of State office and not at your local Probate Court. In order to transfer the title, secretary of state will need the following forms: Form TR-29, Certification from the Heir to a Vehicle, Attach the vehicle title (if available) to the form and a certified copy of the death certificate for the owner of the vehicle must also be presented. Title to the motor vehicle(s) will be given according to the following priority: 1. Surviving spouse. 2. Surviving descendants (i.e., children and/or grandchildren). 3. Surviving brothers and sisters and\or descendants of predeceased brothers and sisters. 4. Surviving parents. 5. Surviving grandparents or descendants of predeceased grandparents.

Criminal

What is a Preliminary Examination?
If an accused has been arrested and arraigned for a felony violation, the next step in the legal process is to appear before a district court judge for a preliminary examination. A representative of the Prosecutor's office will be in district court to present its case against you. The judge or magistrate then decides whether or not there is probable cause to believe that a crime has been committed and that the accused is the individual who committed the crime for which the accused is being charged. The accused should have legal counsel present to represent the accused at this hearing. If the accused cannot afford to hire their own attorney for the preliminary examination, an attorney appointed by the presiding judge will be appointed to represent the accused at this proceeding. preliminary examination If the judge determines that there is not sufficient evidence against you to proceed to trial, the judge will dismiss the case. If the judge determines that there is sufficient evidence to go to trial, the judge will bind you over to Circuit Court for Arraignment on the Information (AOI). That hearing is set by the district court judge for a date at least 14 days following your preliminary exam. Your case file is sent to Circuit Court shortly thereafter, where it is given a new file number and assigned to a new judge. At this point, direct all questions about your case to the Circuit Court, or County Clerks Office, depending on the jurisdiction since district court jurisdiction for your case ends after the preliminary examination.
What is 7411?
The name “7411″ or “Seventy-Four Eleven” comes from the Michigan statute number for this law: MCL 333.7411. Very similar to the Holmes Youthful Trainee Act (HYTA), 7411 is also a deferred sentence scheme. However, 7411 only applies to certain drug crimes, such as a first time possession or use charges.  Section 7411 can usually only be used once during a lifetime. In order to receive the benefit of 7411, the defendant must plead guilty to the charges or be found guilty of the drug crime at trial and then follow a set of probation orders from the judge. Some of the common terms of the 7411 probation orders include the following; no use of drugs or alcohol (including medical marijuana), payment to the court to cover court fines and costs, payment to the court to cover the defendant’s probation, community service and attendance at a course or program explaining the medical, psychological, and social effects of the misuse of drugs, attendance at AA/NA or any other suitable drug rehab program. If the defendant follows the judge’s 7411 probation orders, the defendant is never actually charged with the drug crime and thus there is no addition to the defendant’s public criminal record. However, if the defendant does not follow the judge’s 7411 probation orders and violates the term of probation, the defendant is then charged with the drug crime and sentencing will occur.  The conviction for the Drug crime will then be abstracted on to the defendant’s public criminal record. If you have been charged with a drug crime in Metro Detroit, including all trial courts in Macomb County, it is the first time you have ever been charged with a drug possession or use crime, 7411 may be a good defense strategy for you as the accused and the skilled criminal attorneys of Schock Solaiman Ramdayal PLLC (SSR Law Office) will help you avoid having a criminal record because of the charge.
What is the Mental Health Court?
What is the Mental Health Court? In the 16th Judicial Circuit Court of Macomb County, the Mental Health Court was established in October 2013 after several Macomb County Judges, the Macomb County prosecuting attorney, defense attorneys, criminal justice and mental health professionals collaborated to create a solution to a decades old problem faced in Macomb County. The Mental Health Court offers specialized treatment for individuals with mental illness that are facing charges in the criminal justice system. In order to apply for the Mental health court the originating Judge must agree to the referral and the basic eligibility must be met.  After a plea has been entered, the defense counsel and defendant should complete the eligibility packet for final determination and approval.  . The Mental Health Court focuses on obtaining and maintaining mental health and substance abuse treatment. In addition, housing, education and employment will be addressed. The Mental Health Court team works closely together with participants to ensure services and needs are met to promote healthy living including law-abiding behavior.  the participants work with a team of professionals that include: Judge, specialty court coordinator, community mental health case manager, MDOC Agent, Assistant prosecutor, Defense Counsel. Eligibility Requirements The applicant must meet the following eligibility requirements:
  • Must be a Legal resident of the United States and the individual must reside in Macomb County, Michigan
  • Must be Eighteen (18) years or older
  • Must acknowledge he or she has a serious mental illness
  • the individulal shall not have any convictions of a felony crime of violence involving the use or attempted use of force with the intent to cause death or serious bodily harm.
  • Must be willing to complete the program, including compliance with treatment and prescribed medication as directed.
  • The individual cannot use marijuana for medicinal purposes
  • The individual cannot use addictive pain medication
  • The Individual cannot use alcohol
For more information on the Macomb County Mental Health Court, please visit their website at: http://www.mentalhealthcourt.macombgov.org  
What is The Holmes Youthful Trainee Act (HYTA)?
HYTA is an acronym for the Holmes Youthful Trainee Act. The Holmes Youthful Trainee Act (HYTA), helps young people keep a youthful mistake off their record, so they don’t have to worry about one lapse of judgment ruining their future. Essentially, a youthful offender has the opportunity to get a second chance. HYTA is available to most individuals who commit a crime after their 17th birthday, but before the 21st. In Michigan, most felonies and misdemeanors can be taken under advisement pursuant to HYTA, however “Capital Offenses” (like murder), some Criminal Sexual Conduct charges, major controlled substance charges (drug delivery) and traffic offenses (drunk driving, driving while licenses suspended) are excluded. If a youthful Michigan Criminal Defendant is granted HYTA status for a misdemeanor or felony, the judge will place that defendant on a term of probation. Probation can be for a period up to three years. Most of the time, probation terms include not picking up additional charges, drug or alcohol testing, community service and rehabilitative programs such as AA or NA. Once the individual completes their probation, the judge will dismiss all charges. Any public record of the case is sealed. No conviction for the charge is ever entered and no one will know from a search of public criminal history that there was a charge, plea or a sentence.
What is Sobriety Court?

In Macomb County, Sobriety Court is an alternative to incarceration in the Macomb County Jail for criminal offenses that involve alcohol usage such as drinking and driving (operating while intoxicated or Operating while visibly impaired).  The Sobriety court is designed to equip a participant with tools to stop and prevent alcohol use.  The sobriety court program provides the participant with a team of support and an individualized treatment plan. The Sobriety Court legislation was initially a three-year pilot program (January 2011 to January 2014).  The program has proven to be successful and continues to be used in many jurisdictions.

The Sobriety Court approach is predicated on a person having already realized that his or her drinking has become a problem, and that something needs to be done about it.  The benefit to the defendant of Sobriety Court is that it will allows a person facing a 2nd or even 3rd Operating While Intoxicated (DUI) Offense to keep a Restricted Driver’s License. Otherwise, the individual would be facing a 1 to 5-year complete Revocation of their Driver’s License.  Sobriety court also requires installation of an ignition interlock device on vehicles the participants drive and own.

The program consists of four phases. Each phase involves meeting a set of requirements in order to promote to the next phase. These requirements include, but are not limited to: random drug and alcohol testing, bi-weekly court attendance, counseling, support meetings and maintaining employment.

Sobriety Court is designed to be difficult. This program is designed for those individuals who are ready to be actively involved in making life changes, which will sustain abstinence and foster their growth and development in all areas.  Macomb County currently has one sobriety court program which is located in the 39th district court in Roseville.  Many Sobriety Courts will accept "referral"s from neighboring Courts, meaning that even if your local, Detroit-area drinking and driving case is pending in a municipality that does not have a Sobriety Court, it can often be worked out that the whole case can be transferred to another location with a Sobriety Court

Wealth Preservation

Our family created an irrevocable trust a few years ago, we have had no taxable interest in the irrevocable trust and have not filed a federal income tax return. The Irrevocable trust has an Individual Taxpayer Identification Number (ITIN) and we were wondering if the Taxpayer Identification Number will expire?
Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years, the Internal Revenue Service (IRS) recently announced. In order to give all interested parties time to adjust to the new policy, the IRS added that it will not begin deactivating ITINs until 2016. An ITIN will expire for any taxpayer who fails to file a federal income tax return for five consecutive tax years. Further, An ITIN will remain in effect as long as a taxpayer continues to file U.S. tax returns. This includes numbers issued after January 1, 2013. These taxpayers will no longer face mandatory expiration of their ITINs and the need to reapply beginning in 2018. (This was the case under the old policy.) To ease the burden on taxpayers and to give other stakeholders time to adjust, the IRS won’t begin deactivating unused ITINs until 2016. The grace period will allow those with a valid ITIN, regardless of when it was issued, to submit a valid return during the next tax filing season since 2014 individual returns are due by April 15, 2015 (or October 15, 2015 if an extension is filed.) If a taxpayer’s ID number has been deactivated and he or she needs to file a U.S. return, the individual may reapply using Form W-7.
What is the 2017 estate tax exclusion

Estate Tax Exclusion to Rise to $ 5.49 Million in 2017

It’s official: The Internal Revenue Service announced that the basic estate tax exclusion amount in 2017 for the estates of decedents dying during calendar year 2017 will rise to $5.49 million per individual from $5.45 million for calendar year 2016, due to an inflation adjustment.  Married couples may still get the benefit of two individual estate tax exclusions, so a married couple will be able to shield $10.98 million from federal estate and gift taxes. .

As a result of the estate tax exclusion, the federal estate tax is no longer one of the biggest concerns for most affluent Americans who want to avoid taxes on wealth they leave to heirs—as it was for many years.  Only about 3,700 estates, or 0.12% of the total, are expected to owe federal estate tax this year. The top estate tax rate on amounts above the estate tax exclusion is Forty Percent (40%).

The federal gift and estate tax exclusion may rise annually with inflation.  The inflation bump up to the estate and gift tax exemption matters to wealthy folks who try to whittle down their estates to keep below the threshold, which was as low as $2 million in 2008, $1 million in 2003 and $675,000 in 2001. The estate tax exclusion and also the gift tax exclusion amount was set at $5 million in 2011, indexed for inflation. The top federal estate tax rate is 40%.

The increases in the estate tax exclusion also means that the lifetime tax exclusion for gifts will also rise to $ 5.49 Million as will the generation skipping transfer tax exemption.  In the same release the Internal Revenue Service said the “annual gift exclusion” will remain $14,000 per recipient in 2017. The provision sets the amount that an individual can give, tax-free, to another person who isn’t a spouse. (Transfers between spouses are often tax-free.)  There is no limit on the number of such gifts a taxpayer can make so long as each is to a different person.

How often should I review my IRA beneficiary designation and is my IRA distributed as part of my estate plan?

Properly designating your IRA beneficiary can be an important part of your estate plan. Otherwise, your heirs may have to pay more income and estate tax than necessary after you are gone. The most common IRA beneficiary designation include the individuals spouse, children, grandchildren or other loved ones.

The IRA owner should periodically review his/her IRA beneficiary designation that is on file with the IRA institution and make the appropriate modifications when necessary.  In addition, the IRA owner should send copies of the the IRA beneficiary designation to the institution in duplicate and ask for a receipted copy to be mailed back to the owner.  It is a good practice to review the IRA beneficiary designation any time you have a change in your life.  a few examples of such a change in your life should include the following; the death of a loved one, the birth of a new family member, the disability of a family member or a loved one, the divorce of you or a family member, a medical diagnosis for a loved one or family member. 

One of the most common estate planning mistakes we see is that Individuals assume that their Individual Retirement Account Assets (IRA) are disposed of by their Estate plan such as a will or trust.  Generally speaking, this is not true. Since an IRA is a non-probate asset and it is not governed by a will or trust.  The  IRA beneficiary designation determines who is entitled to the IRA proceeds upon the death of the IRA owner, not the will or trust.  The exception to this general rule would be where there is no IRA beneficiary designation on file with the institution managing your IRA or the IRA Owner for whatever reason selected their estate or trust as beneficiary of his or her IRA.

My Husband passed away and I want to sell some common stock that we held jointly. How will the gains be taxed when I sell my shares?
In most states, half of the common stock's tax basis is stepped up to the value on the date that a spouse dies.  For example, if you and your husband bought stock for Forty Thousand ($40,000.00) and it was worth One Hundred Thousand ($ 100,000.00) when he died, the basis is Seventy Thousand ( $70,000.00) ($ 20,000.00 from your half of the original stock basis and 50,000 from half of the stock value when he died.  If you sell the shares for One Hundred Thousand ($ 100,000.00) you will be taxed on the gain of Thirty Thousand ($ 30,000.00).  In Community property states, Arizona, California, Idaho, Louisiana, New Mexico, Texas, Washington and Wisconsin, the entire basis in the stock will be stepped up to the value as of the death of the spouse.  (See IRS Publication 555)
As a senior, what are the federal gift tax ramifications of giving stock to a child?

I am 79 years old and in relatively good health. My goal is to save as much of my hard earned money for my loved ones as I possibly can in the event i need long term care or I need to enter a nursing home. Therefore, I would like to transfer some shares of common stock that I own into my son's name.  The approximate value of the stock today is $ 13,000.00.  When I file income tax, will I need to pay profit on the common stock because of the transfer? Do i need to file a federal gift tax return because of the gift? Does my son need to report this gift on his income tax return?

One can transfer up to $14,000 on an annual basis to as many people as they desire. Transferring more than that amount requires the filing with the Internal Revenue Service of a Federal Gift Tax form. The person receiving the gift (your son) does not include the gift in his tax return as it is not considered taxable income for him. If you’re transferring stock, your son takes it at the same price you paid for it (“cost basis”) and he may have to pay capital gains taxes when he sells it.

It is also very important to realize that making a gift like the one described here of any amount could make you ineligible for some period of time (“penalty period) for Medicaid if you ran out of assets and required long-term care.  This would apply if the gift were made within five years of your applying for such assistance.

Thus, we would strongly encourage you to meet with an elder law attorney to review your entire financial situation and your long term goals in order to design a proper plan to address your concerns.

What is long term care insurance? Should my parent get a long term care policy?

Long term care insurance policies are separate from general health insurance. These policies typically provide custodial care benefits that are needed when an elderly or disabled person requires assistance with the activities of daily living. Long term care insurance generally covers in-home care or stays in facilities such as assisted living, respite care, hospice care, and nursing homes. Newer policies also cover dementia and Alzheimer’s care.

The amount of the premium on a long term care policy is typically based on three primary factors: the daily benefit or overall benefit amount, the length of coverage, and the level of inflation protection (i.e., the benefit amount can increase over time). According to the American Association for Long Term Care Insurance, a 55-year-old single adult can expect to pay $2,065 a year in premiums for $162,000 in benefits with 3% compound inflation protection, which would increase to about $330,000 in total coverage at age 80. Like any other type of insurance, obtaining a policy should be done well before benefits are needed. A common misnomer is that Medicare covers long-term care. Medicare only covers short-term nursing home stays specifically involving skilled care, or limited in-home care where a person’s doctor says it is medically necessary. A long-term care policy may be the right choice, while becoming Medicaid-eligible and may be an option depending on the particular situation. An elder law attorney such as the professionals of SSR Law Office can assist in sorting through these issues to make the right decision.