May is Elder Law Month. The National Academy of Elder Law Attorneys (NAELA) encourages its members to make a special effort to connect with the community this month. We hope you regularly read our articles, which the Sentinel has published weekly since September 2012.
A catch phrase in the long-term care industry is the five-year look-back. Our regular readers might recall that “look-back” terminology generally relates to government scrutiny of the management of family assets for the 60 months preceding a request for government assistance toward the $100,000 annual cost of nursing care. You can get more free information about that and other topics from our website or by attending one of our seminars.
It’s been five years since we started Keystone Elder Law to serve the residents of Cumberland County and surrounding areas. As we have guided the elder care journey for hundreds of long-term care clients, it is time for both celebration and reflection. Details about our Hawaiian Luau celebration are at the end of this column. But first, here’s reflection about five key long-term care issues as I look-back over Keystone Elder Law’s first five years:
1. Federal Policy: Expecting the government to provide an economically sustainable solution to long-term care issues might be a misplacement of hope. There likely will not be enough government money to continue current service levels of existing programs for the emerging bubble of baby boomers. The probable inability of the federal government to pay for the care of the aging could be improved substantially if the children of a deceased married couple could no longer exempt the first $10,860,000 of the family estate from tax. I doubt that the desire to exclude nearly $11 million from one’s family estate is a priority concern for a majority of my neighbors in Cumberland County, and I instead imagine this tax policy reflects the self-interests of members of the United States Senate, whose average personal net worth exceeds that. Intelligent debate is needed to form an actuarially solid fiscal plan for the federal funding of long-term care programs. Please respect any Senatorial or Congressional candidate of either party who dares to be candid about how America will pay for the long-term care of our aging.
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2. Look-Back Fairness: The five year look-back that scrutinizes tax returns and bank statements is part of the process of requesting Medical Assistance (Medicaid), but seems invasive to most applicants. However, if your neighbor suddenly had a new SUV and RV valued at more than $100,000, you might ask if he’d won the lottery. If the neighbor said that rather than pay for his mother-in-law’s care in a nursing home with her money, he spent her money on the SUV and RV and got the government to pay for the nursing home, you might feel outraged that your tax dollars had enabled the acquisition of your neighbor’s recreational toys. Such abuse is avoided by the look-back regulations, which penalize any combination of gifts or uncompensated transfers of cash or property, which exceeds a total of $500 during any of the 60 months preceding a Medicaid application.
3. Filial Responsibility: Regulations that look back over a five-year period, when honest adult children may not have been paying attention or thinking about the consequences of their parents’ generosity or irresponsibility, create financial liability for those children. Pennsylvania law says that adult children of indigent parents who do not qualify for Medicaid should expect to be sued by nursing homes for the cost of their parents’ care. Competent elder law attorneys can help to unravel that, especially when they get involved before the time of the Medicaid application.
4. Politicizing of Veterans Benefits: Proposed regulations of the Veterans Administration would introduce a new look-back for the Aid and Attendance pension. The regulations of the VA will be different than the regulations related to Medicaid, perhaps with a three-year look-back instead of five, among other things. The inconsistency of VA and Medicaid laws is neither logical nor based on substantive reasons, but that’s what can happen when separate federal agencies address similar needs. Elder law attorneys are advocates to get the best results for our clients, which can require fancy footwork to avoid unintended regulatory landmines caused by the inconsistency among federal regulations.
5. Foundational Documents: We use that term to include the last will and testament, a durable financial power of attorney, and an advance directive, which includes both a healthcare power of attorney and a living will. Remarkably, foundational documents are needed even to allow one’s spouse to act on his or her behalf. It is unnecessary and unwise to name multiple agents to serve simultaneously, since disagreement during a long-term care crisis can lead to expensive delays and courtroom drama. Therefore, one agent should be appointed to act at a time, with successor agents. Although the documents are important, the family discussion that explains the intention of the documents can be just as important. Assuming foundational documents are accomplished, a trust could be discussed. In our counsel of hundreds of clients, including a range from those who are virtually impoverished to multimillionaires, we have not created a single revocable living trust within the past five years. Given current laws, trust planning is nearly always most beneficial if the trust is irrevocable, which is by definition a serious matter that requires study not only with an attorney, but could also involve a financial planner and accountant.
Now for the party! We have invited our clients to join us on Friday, May 29 from 11 to 2 p.m. for a non-alcoholic Hawaiaan Luau luncheon at our Mechanisburg office. If you are a regular reader but not yet a client, now is the time to call and see if you should be. We need those who plan to attend the Luau to call us today at 717-697-3223 and let us know so that we may prepare for an appropriate number of guests.