Elder Law FAQ

ELDER LAW BY: JOHN A. MCDERMOTT, ATTORNEY AT LAW WHAT IS ELDER LAW? Elder law is a diversified law practice focusing on the numerous areas of law that impact the elderly and their loved ones. This includes long term care planning, estate planning, retirement issues, tax planning and planning for government entitlements. Elder law often involves planning in advance for illness or incapacity to minimize legal problems, preserve assets and maintain the dignity of senior citizens. Sometimes elder law involves crisis planning such as when an elderly loved one is in need of immediate placement in a long term care facility. WHY SHOULD ONE PLAN IN ADVANCE FOR LONG TERM CARE ISSUES? Advanced planning allows one to greatly minimize legal fees, avoid emotional trauma for family members, and preserve assets. Planning ahead when someone has the ability to do so also allows you, and not a court, to decide in advance what medical care you will or will not receive. A well drafted estate plan which includes a medical durable power of attorney and a financial durable power of attorney can avoid the need for court intervention to obtain a Guardianship or Conservatorship. These court proceedings are time consuming, costly, and sometimes upsetting. HOW IS LONG TERM CARE PAID FOR? Long term care in a nursing facility in Michigan currently averages over $60,000 per year. Private health insurance does not cover nursing home care and Medicare only partly pays for skilled care in a nursing home for 100 days after a hospital stay. If one has long term care insurance it can pay for nursing home care as set forth in the policy. This usually pays for a large part of the total cost but not all of it and few people actually have long term care insurance. In reality the cost of nursing home care is mostly paid for out of pocket or, if one qualifies, by the Medicaid program. WHAT IS MEDICAID? Medicaid is an entitlement program funded by the federal and state government. The Medicaid program for long term care in a nursing home for persons over age 65 has strict income and asset rules. There are different income and asset rules for the program depending on whether you are married or single. Generally a single person can only have $2,000 in countable assets and certain excluded assets such as a pre paid funeral, one car, jewelry and personal effects, and your principal home. HOW CAN ASSETS BE PRESERVED? By gifting or transferring the assets. This is known as divestment under the Medicaid program and makes you ineligible for Medicaid for a period of time depending on the amount gifted. Only a competent adult, or an agent acting for the adult under a durable power of attorney with gifting authority can make gifts. Prior to making gifts an attorney should be consulted to ensure that one will not be disqualified from the Medicaid program and has retained enough assets to pay for long term care during the period of ineligibility created by the gift. WHAT IS MEDICAID ESTATE RECOVERY? Federal law requires states to have an estate recovery program to recover monies from Medicaid recipients who die leaving assets. Currently Michigan is the only state without a Medicaid estate recovery program. If enacted here, a Medicaid estate recovery program could effectively disallow the protection of the family home which currently exists in Michigan. In October 2005 a Medicaid Estate Recovery Bill was introduced into the Michigan Senate and is pending. Please contact my office for an update on the status of this Bill.