Last minute nursing home eligibility

Episode Transcript

Speaker 1 (00:01):
This is the Legal Exchange with Todd Lutsky from the
law firm of Cushing and Dolan and Susan Powers of
the Armstrong Advisory Group. Each week, Todd and Susan will
discuss many topics, including estate planning, how to avoid probate,
and protecting your money from a nursing home. If you
need assistance in any of these areas, or have a
question about another issue that may affect your future, call

(00:21):
eight six six eight four eight five six ninety nine
to make an appointment. That's eight sixty six eight four
eight five six ninety nine. Operators are standing by. Now
Here are your hosts, Todd Lutsky and Susan Powers.

Speaker 2 (00:38):
Welcome into the Legal Exchange with Todd Lutsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and I'm
joined by Todd Lutsky, a partner with the law firm
of Cushing and Dolan with a master's in taxation. Welcome Todd.
How are you today?

Speaker 3 (00:53):
I'm never better in you.

Speaker 2 (00:54):
I am great. Thank you what you have for us
this week.

Speaker 3 (00:56):
Couple of cases We're going to head over to Wisconsin.
We got an a pellid court case they are dealing
with a really ambiguously drafted caretaker agreement. Very strange. You
don't get a lot of caretaker agreement cases. But we're
going to learn other things about this case that not
just the caretaker agreement part. But yeah, that's a very

(01:16):
strange situation. And then we're going to go back to
New Jersey and got an appellid court case. They are
dealing with a Medicaid lien and a state lien and
how these liens work. So we're going to learn not
only about which one might have priority, but how and
why there might be a lifetime lean versus an at

(01:38):
death lien and how that might play at play out,
especially if you have a life estate. So lots of
things to think about in the estate recovery world. But
when we're talking about Medicaid liens, folks, that's what this
guide is all about in a sense, because it's dealing
with last minute Medicaid eligibility. And obviously there could be
liens placed on things that you have in your own

(01:59):
name when you get sick, But remember a Medicaid leen
might be your friend, because as long as you can
get on Medicaid and be at the lower rate that
might be better than paying the higher rate. This guide
gives you tips on how to treat all your assets,
and they're treated differently whether you're married or single, and
the different assets are treated differently, like a house versus

(02:19):
a rental property versus a four h one K or
a life insurance policy. Learn how these assets can be
countable or non countable last minute, How you can protect
them last minute or at least slow the medicaid eligibility
or at least slow the financial bleeding of these assets.
Don't just write the check. Get the guide eight six

(02:40):
six eight four eight five six nine to nine or
legal exchange show dot com Last Minute Medicaid Eligibility Techniques
eight six six eight four eight five six nine to
nine or legal exchange Show dot com Wisconsin so here.
On April twenty sixteen, Dan and Milton entered into a

(03:05):
personal care contract. Dan promised to provide care to Milton
for the balance of his life. Stay with me on
these facts. Milton promised to pay a one time upfront
payment of one hundred and ninety one thousand dollars for this,
but it's considered to be a gift by both parties.

(03:26):
That's strange Milton also promised to update his estate planning documents,
so his trust transferred title to the home to Dan.
The agreement stated that these promises were made out of
love and affection. Very strange language for a personal care contract.

(03:46):
Either party could unilaterally terminate the agreement with sixty days notice. Wow,
another big red flag. So on May sixth, twenty sixteen,
Dan moved to wiscons collected his one hundred and ninety
one thousand dollars yep from Milton, and Milton updated his

(04:07):
revocable trust to give title to the home to Dan.
So far sounds like they're doing what they said yep.
July twenty sixteen, which, by the way, is like too much.
Months later, Dan decides to terminate the contract. Surprise, and
he stopped providing care sixty days later.

Speaker 2 (04:25):
What about one hundred and ninety one thousand dollars?

Speaker 3 (04:27):
Oh no, he collected his one hundred and ninety one
thousand dollars. You were allowed to unilatterally terminate the contract
anytime it said in there, didn't it? That was what
the agreement said. Oh shocker. So on September twenty sixteen,
Dan amended his trust to remove Dan as a beneficiary.
Yeah seems fair. So on September twenty twenty two, yep,

(04:48):
many years later, Milton died. Dan, who hasn't apparently forgotten,
files a claim for summary judgment to enforce the promise
to get the ho.

Speaker 2 (05:00):
That's crazy, oh is it so?

Speaker 3 (05:03):
The yes, it is.

Speaker 2 (05:04):
I declare it to be crazy.

Speaker 3 (05:06):
He's telling you can't make this up. The estate then
argued that it's not enforceable. It's not an enforceable promise
to make a future gift. The trial court granted the
summary judgment for the estate, stating it was a gift
and not in consideration of future caretaking services. The house.
The house. That's what he's arguing here, that he wants

(05:27):
the house. And so again, if you go back and
read this, it says these are made out of love
and affection. They were treated while the one hundred and
ninety one was considered to be a gift by both parties. Okay,
but maybe not the house.

Speaker 1 (05:41):
Well.

Speaker 3 (05:42):
Needless to say, Dan didn't like that result, so he appealed.
On appeal, the appellate court reversed and said you got
to remand this this is a summary judgment. So they
said you need to remand this case.

Speaker 2 (05:56):
But what you've done what I tell you about not
giving us any answers in these cases.

Speaker 3 (06:00):
So they say we're going to reverse and remand the
case because the contract itself is not clear as to
whether the house was to be a gift or whether
the house was to be provided in consideration of future services.
If you go back and look, it said the one
ninety one is a gift by both parties. It was
silent as to what the house was, so you got

(06:22):
to go. So all this means is that it doesn't
pass summary judgment muster, you got to go litigate this.
So the appellate court didn't say, Dan, you're going to win.
It said go back and litigate this because we're really
not clear on what that meant. I think ultimately it's
all tied to providing services. I think you're going to

(06:44):
get there, but I think you just have to litigate it.

Speaker 2 (06:47):
Dan.

Speaker 3 (06:48):
Wow, right, what a crazy situation.

Speaker 2 (06:53):
That is crazy.

Speaker 3 (06:55):
Clearly it's poorly drafted from the get go. Absolutely, But
I just want to look at this not from the
case case perspective as to who's gonna win or not.
I want to look at this as a from a
Medicaid perspective, How would this work from Medicaid? The issue
here was whether or not they provided the services and
whether they get their money. This has nothing to do
with Medicaid, but we need to know because we use

(07:17):
personal care contracts, as you'll see in the guide this month,
dealing with personal care contracts so that we can transfer
money and not have the money transferred to a family
member be treated as a gift, otherwise known as a
disqualifying transfer, creating a five year waiting period for Medicaid eligibility.

Speaker 2 (07:37):
Right, because you told us in a prior show you
couldn't do a lump sum payment for past services, so
can you do a lumpsum payment for future services?

Speaker 3 (07:47):
So that's where we're headed. So let's look at how
this would be perspective, how this would look from a
Medicaid perspective. Right. So, again, as we know many, many,
many people more and more are providing care for people
at home, and of course they should get paid for
it if they're providing the care, and that can be
done to protect assets from the nursing home without a

(08:08):
five year waiting period. But you got to follow the rules,
like what a lumpsum payment there's cases both ways. You
can't pay a lump sum backwards, that's for sure. Going forward,
they really don't allow it. You got to pay as
you go, so more as a pay as you go.
So you got problem number one with this contract being

(08:29):
a lump sum contract. Number two the contract itself, and
I don't know if they did this here, but the
one we're talking about, better state the terms and the payment.
How much are you getting paid? Is it hourly? Are
you getting paid twice a month, once a month, weekly?
How does it work? It needs to say how long
you're going to be providing the care, and it needs

(08:52):
to indicate what kind of care you're providing. Be as
detailed as you possibly can in this contract. Now, it
does need to be a contract, right in order to
convert this from being done for love and affection. Notice
here they actually use the words these were I think
they said something like the parties said that this is

(09:14):
all done out of these are promises made out of
love and affection. Don't put words love and affection in
your personal care contract.

Speaker 2 (09:23):
Remember, that's the exact opposite of what it's supposed to be.

Speaker 3 (09:26):
Exactly. Medicaid says that if you don't have a contract
you're serving the work you're provided is deemed to be
out of love and affection. So love and affection is
a bad term to have in your medicaid contract, a
personal care contract if you're concerned about Medicaid. Yeah, this
idea of unilaterally terminating a contract any time you want

(09:46):
within sixty days notice would probably make the contract not
be a valid contract from the get go, So I
think you have a problem with that in and of itself.
And lastly, folks, just make sure that when you collect
the money that the person collecting the money providing the
service puts it on their income tax return. All those
things cleanse the transfer, make it not a five year

(10:09):
waiting period, and it's something you can do last minute.
Other things you can do last minute. Get the guide
learn how not to pay the nursing home up front
eight sixty six eight four eight five six, nine to nine.

Speaker 2 (10:22):
You've been listening to Todd Lutsky, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group, and we'll be
back with more after this break. On the legal exchange
with Todd Lutsky.

Speaker 1 (10:37):
Changes to Medicaid occur almost every year, and if you're
not informed, your assets could be at risk, especially if
you or your spouse need nursing home care. Cushing and
Dolan are experts in elder lam and their new guide
is called Last Minute Medicaid Eligibility. It'll help you understand
the Medicaid process, which is critically important if you're retired
or getting closer retiring. The guide has important information regarding

(10:58):
numerous strategies that can protect your assets from the nursing home.
It could be your primary home, a vacation home, or
any rental property you may own. You've worked hard to
achieve wealth, so don't take chances when it comes to
protecting it. Get your copy of Cushing and Dolan's brand
new guide called Last Minute Medicaid Eligibility call right Now
eight six six eight four eight five six nine nine.
That's eight six six eight four eight five six nine nine,

(11:20):
or you can request it online by visiting Legal exchange
show dot com. That's Legal exchange show dot com. The
proceeding was paid for in The views expressed are solely
those of Cushing and Dolan. Cushing and Dolan and or
Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated. Summers here, New England, and

(11:41):
it's the perfect time to trade the daily routine for
something extraordinary. Say hello to the US Virgin Islands, America's
Caribbean paradise. Explore the vibrant history and flavor of Saint Croix.
Lounge on the stunning beaches of Saint Thomas, or find
your peace on the quiet shores of Saint John. From
the moment you arrive, you'll feel it. You're naturally in

(12:01):
rhythm with the heartbeat of the islands. There's no passport needed,
no currency to exchange, just warm weather, clear blue water,
and unforgettable experiences waiting for you. Whether you're planning a
romantic escape, a family adventure, or a little of both,
this is the summer to make it happen. Go to
visit USVII dot com to learn more. In start planning,

(12:22):
that's visit USVII dot com. Your island getaway is closer
than you think. The US Virgin Islands, where summer never ends.
Book your trip today at visit USVII dot com.

Speaker 4 (12:37):
Artificial intelligence isn't just the future, it's already shaping how
people think about their money. Hi, this is Chuck Zada
from the Armstrong Advisory Group. We've put together a new
guide called AI in your Financial Plan.

Speaker 1 (12:49):
In it, we.

Speaker 4 (12:50):
Explore the ways that AI is being used in financial technology,
from apps the track spending to tools that can help
identify trends. It's a rapidly changing space, and this guide
is designed to help you understand some of the potential
benefits and risks that AI may present. Want to learn more,
call eight hundred three nine three for zero zero one

(13:11):
and request your free copy of AI and your Financial Plan.
That's eight hundred three nine three for zero zero one,
or visit Armstrong Advisory dot com.

Speaker 1 (13:22):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. You're listening to the Legal Exchange with Todd Lunsky,
an expert in elder life planning and taxation. Need help

(13:44):
with your estate plan comp Todd right now and make
an appointment eight sixty six eight four eight five six
ninety nine. That's eight sixty six eight four eight five
six ninety nine.

Speaker 2 (13:53):
Welcome back into the legal exchange with Todd Latsky. I'm
Susan Powers of financial advisor with the Armstrong Advice Group,
and I'm joined by Todd Lutsky, a partner with the
law firm of Cushing and Dolan with a masters in taxation.
Where we headed now, Todd, we're.

Speaker 3 (14:08):
Going to go over to New Jersey and we're going
to talk about a Medicaid lean, a state lean, a
lifetime lean versus an at death lien. And what are
all these leans that we're talking about? So here are
the facts. So, Gabriel an adult who lives in a
house operated by ARC. This is those Foundations group home. Yeah,

(14:33):
when when she and there she gets you know, day
and residential services. Okay, Well, DDD of New Jersey, which
is the Department of Disabled Individuals in New Jersey, which
is a Medicaid program in New Jersey. They've actually provided
a lot of the services since twenty twelve. Okay, Well,
in December twenty nineteen, Gabriel inherited six hundred thousand dollars

(14:58):
from her his sister. Oh right, yeah, from the estate
of the sister. ARC petitioned to become guardian and petition
to transfer those assets immediately to a pool trust for
her for her benefit. I would have done the same thing. D. D.
D of New Jersey said, whoh, wait a minute, we've

(15:20):
got a claim here, and that claim that lean we
have that should be paid for and paid off for
the past, you know, the existing amount of money that
we're owed before we put any of this money into
a pool trust. ARC argued, Wait a minute. Department of
Medical Assistance d m A, which is the federal version
of Medicaid, they're going to have a future Medicaid lean

(15:43):
and that would take priority over your D D D lean,
therefore precluding you New Jersey from seeking repayment of the
lean now.

Speaker 2 (15:55):
And she's still alive, so yeah, okay, she is.

Speaker 3 (16:00):
The trial court agreed with Arc and said the state lian,
you need to wait. You're going to be subordinate to
the future federal DMA Medicaid lien.

Speaker 2 (16:11):
Take a number.

Speaker 3 (16:12):
Therefore, allow that inheritance to be transferred to the pool
trust for the benefit of gabl wheel. D d D
didn't like that, Yeah, so they appealed. This would never
be fun if we didn't get to go to an appeal, right,
So d d D appealed and the appellate court reversed. Really,
the appellate court reversed the trial court saying, while there

(16:35):
is no medicaid lien, while there is a medicaid leen
that can be you know, can be imputed here against
the other medicaid leen recipients prior to his or her death.
So you're allowed on a medicaid lien to pursue prior
to the death of an individual. But here d d

(16:56):
D lean and medicaid leen exist at the same time.
So if if they exist at the same time, then
the medicaid lien takes priority, the federal medicaid lien takes
priority over the state. But since here there's no medicaid
lien that exists currently, the DDD lien does exist, they're

(17:17):
entitled to recover, so the state can recover when there's
not another medicaid lien already out there.

Speaker 2 (17:25):
Do you want to know my opinion as a lay
person who's been going to the law school, of Todd
Blotski for the past twenty years. Yeah, I would think
that that inheritance would be counted as income in the
month that it's received, and that we would then save
that money before the end of that period later for later.

(17:46):
I think, So, do pool trust do whatever it is
you're going to do. I don't know if you do
that in New Jersey. Every law is different, but or
a nonuity or something so state specific correct susan you're
able to make that assessment.

Speaker 3 (17:57):
I think that's accurate. We're going to explore that, I
think right right now.

Speaker 2 (18:02):
But I think I get an a for this semester
with that you do.

Speaker 3 (18:05):
You've been paying attention. So whether this is the right
answer or not, I mean, it does seem there does
seem to be some logic that if there's no federal
lean then it can't take priority. It's a future lian.
So I see how the state might be able to
recover against state specifics. So I don't know all the laws,
but I'm going to give you some answers from a
Massachusetts perspective. But folks, this is what happens right after

(18:27):
you get on Medicaid. Remember a Medicaid lien is not
a bad thing because you could be paying, you know,
sixty five hundred a month on medicaid instead of fifteen
thousand a month private pay. So getting on Medicaid and
having a lien is still your friend. So this isn't
a bad thing. And that's what this guide is all about.
What can we do last minute to protect assets that
we've never protected or if we've done planning, there's gonna

(18:51):
be assets outside the trust that need protected when you're
applying for medicaid. So this guide is for everyone, people
who planned and who haven't planned. It'll explain to you
how to treat certain assets differently. Houses, rental properties, vacation homes,
life insurance annuities. There's certain exceptions like caretaker child exceptions

(19:12):
for the home. How to do it if your own
house with your sibling folks. Assets are treated differently. Some
are accountable, some are not. Some can be saved last minute.
Don't write the check, call and get the guide eight
six six eight four eight five six nine nine or
Legal Exchange show dot com again eight six six eight

(19:34):
four eight five six nine nine or Legal Exchange Show
dot com.

Speaker 2 (19:39):
How would you handle this case if Gabrielle was your client.

Speaker 3 (19:43):
Yeah, so this is this is where I focused on
the inheritance Susan, just just like like you did. You know,
if you're on Medicaid and in a nursing home and
I don't know here that they were, and that might
be the difference. Remember she was in some kind of
ur operated home.

Speaker 2 (20:01):
A group home, got it. Got it.

Speaker 3 (20:03):
So this could be a very big difference. But you're
on the right track, and I'm going to treat this
the same way. I'm assuming that what if we have
somebody who's in a nursing home, yes, and already on medicaid,
nursing home Medicaid, not community Medicaid, but long term care
nursing home Medicaid. This is how the rule works. And

(20:25):
so that might be the big difference here with the
New Jersey case. But let's explore it. If you're on
Medicaid and you get an inheritance, that's a lump sum
of money. The mass rigs treat this as as you said, Susan,
as income in the month received and an asset in
the following month. You have thirty days. Now why that

(20:48):
matters is if it's income, then you're not technically considered
over assets. You're not over your two thousand dollars asset limit,
and therefore you don't lose Medicaid coverage. Now, yes, you
might have to private pay the full month because you've
got a whole ton of income. Well that's okay. This

(21:09):
money then after you pay, that can be immediately moved
into a pool trust within thirty days of you know,
and remaining eligible from Medicaid. And or you could buy
a Medicaid annuity, depending on how the numbers work, how
old you are, and you know how much you're dealing with.

(21:30):
That's really different than what happened up here. So again,
if you're on Medicaid, I'll give you now a real
life story. If you're on Medicaid and you've been on
for several years and you get somebody who long lost
uncle receives you, dies and leaves you money, what happens. Well,
in this case, I had a situation where husband and

(21:52):
wife received each received three hundred thousand dollars same uncle.
So it was nice that took tyr of the spouse
as well. Husband was at home, wife was in the
nursing home. I said, what do we do? I said, Well,
the husband's money is no problem. Right, you could, I said,
just just that's he's allowed to get that, and we
can after you're on medicaid. Doesn't have any problem, I said,
hold on to hers for a minute. Then I said,

(22:13):
you know what, all right, let's transfer it to her
and now it's considered a lump sum. She gets it
in one year. Then within thirty days, I said, okay,
transfer it to the spouse. Why because transfers to spouses
are no five year waiting period, and then spouse is
allowed to go ahead in and buy. You know, I'm
actually transferring it to a spouse is not a disqualifying transfer.

(22:35):
And so we were able to do that and we
could just buy an annuity for the for the money. Wow,
what what an amazing way to get around this whole problem.

Speaker 2 (22:44):
Loohole And it workedhole, and.

Speaker 3 (22:48):
It absolutely worked, and you could save the money. So
you got to understand the rules when you allow those
you know that those are all allowable rules and and
you can keep the person on medicaid.

Speaker 2 (22:58):
You really need an ery that this is what they
do all day every day with the elder law you do.

Speaker 3 (23:04):
I mean, like a life estate, you could put a
lien on during life if you're foolish enough to sell
it during life, they're going to capture it. Yes, if
you wait till death, they might put an at death
lien on it. But you know, but then you would
have avoided probate and it wouldn't be captured. Right, So
you really got to understand it, and pooled trust could
have been used as well. Last Minute, But there are
techniques out there for us to understand how to protect

(23:25):
assets Last Minute. That's what the guide is about this month.
Last Minute Medicaid Eligibility eight six six eight four eight
five six nine nine or Legal Exchange show dot com.

Speaker 2 (23:37):
You have been listening to Todd Lutski, a partner with
a law firm of Cushing and Dolan. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and Todd
will be answering your listener questions when we return to
the Legal Exchange with Todd Lutsky.

Speaker 1 (23:53):
Changes to Medicaid occur almost every year, and if you're
not informed, your assets could be at risk, especially if
you were your spouse need nursing home care. Cushing and
Dolan are experts in elder lam and their new guide
is called Last Minute Medicaid Eligibility. It'll help you understand
the medicaid process, which is critically important if you're retired
or getting close to retiring. The guide has important information

(24:13):
regarding numerous strategies that can protect your assets from the
nursing home. It could be your primary home, a vacation home,
or any rental property you may own. You've worked hard
to achieve wealth, so don't take chances when it comes
to protecting it. Get your copy of Cushing and Dolan's
brand new guide called Last Minute Medicaid Eligibility Call Right
Now eight six six eight four eight five six nine nine.

(24:33):
That's eight six six eight four eight five six nine nine,
or you can request it online by visiting Legal exchange
Show dot com. That's Legal exchange show dot com. The
proceeding was paid for in The views expressed are solely
those of Cushing and Dolan. Cushing and Dolan and or
Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.

Speaker 5 (24:53):
Artificial intelligence is constantly evolving and can even be a
revolutionary asset to a financial strategy. HI This is Armstrong
from the Armstrong Advisory Group. Our new guide is called
AI and your Financial Plan. In it, we explain how
artificial intelligence continues to make inroads into our daily lives
and how the advent of its technologies may affect an
existing or future financial plan. AI serves the public in

(25:16):
a variety of ways, from apps to monitor personal finances
to tools that analyze investments. AI is not the future anymore.
Its effect is felt by businesses of all kinds on
a daily basis. Call us today at eight hundred three
nine three four zero zero one and ask for your
free guide. That number again is eight hundred three nine
three four zero zero one, or you can request the
guide online by visiting us at Armstrong Advisory dot com.

Speaker 1 (25:39):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. Summers here in New England and it's the
perfect time to trade the daily routine for something it

(25:59):
can extraordinary. Say hello to the US Virgin Islands, America's
Caribbean paradise. Explore the vibrant history and flavor of Saint Croix.
Lounge on the stunning beaches of Saint Thomas, or find
your peace on the quiet shores of Saint John. From
the moment you arrive, you'll feel it. You're naturally in
rhythm with the heartbeat of the islands. There's no passport needed,

(26:21):
no currency to exchange, just warm weather, clear blue water,
and unforgettable experiences waiting for you. Whether you're planning a
romantic escape, a family adventure, or a little of both,
this is the summer to make it happen. Go to
visit USVII dot com to learn more in start planning.
That's visit USVII dot com. Your island getaway is closer

(26:43):
than you think, the US Virgin Islands, where summer never ends.
Book your trip today at visit USVII dot com. You're
listening to the Legal Exchange and it's time for Ask Todd,
the segment where Tom will answer your questions about anything
and everything that's included in the estate planning process. Once again,

(27:06):
here's Tod Lutsky and Susan Powers.

Speaker 2 (27:10):
Welcome back talk. We have a few questions from listeners.
First question comes from Rebecca and Maldon Mass and Rebecca writes,
my mother has a non retirement annuity worth four hundred thousand,
but she hasn't taken any money out of it. She's
been declining and we'll need to go into a nursing
home soon. I called the annuity company and they told
me this annuity can be withdrawn if she decides to

(27:32):
do so. Is there any way we can protect this
from the nursing home now or is it too late?
Other than a few thousand in a bank account, this
is her only asset. So the last minute planning for
a single person.

Speaker 3 (27:46):
Yeah, yeah, So this is a single individual that's got
four hundred thousand dollars kicking around. Whether it's in the
annuity form or not really does not matter. So let
me explain whether this is sitting in a bank account
or whether this is sitting in an annuity. The annuity

(28:08):
that it is in is because it was purchased long ago,
is guaranteed not to be a Medicaid qualified annuity.

Speaker 2 (28:18):
Because it's very special, right.

Speaker 3 (28:20):
This was just a regular old investment annuity, and so
I need people to understand that while I'm going to
talk to you now about Medicaid annuities. Understand that if
you have one today and you bought it a while ago,
and you were never in the nursing home, it is

(28:41):
not a Medicaid annuity. So if someone sold it to
you telling you that they said this will be protected
from the nursing home, it won't be. Okay, Okay, So
cash or an annuity makes no difference. We've got four
hundred thousand of acountable assets. First thing we need to
do is understand that in order for Rebecca to get
eligible for MEDICAD, she's only allowed to have two thousand

(29:02):
dollars so much so that's a lot more than four
hundred or four hundred's a lot more than two. Excuse me, okay,
So how do we get this down to two? Well,
we first got to liquidate the annuity, convert it to cash.
Now once it's in cash, based on her age, do
we know her age?

Speaker 2 (29:21):
We don't know her, So the age might.

Speaker 3 (29:24):
Affect whether we can do the annuity or not. Right, So,
if she's like in her like ninety, you know, even
eighty nine, it may be the annuity might not work.
When we talk about how the numbers work, so we
would have to go to a pool trust route if
the annuity doesn't work. I don't want to make it
sound like there's nothing we can do. We will either
do a pool trust or an annuity.

Speaker 2 (29:44):
Here, So annuity would be your first choice.

Speaker 3 (29:46):
Yeah, the annuity would be the go to because the
lean that's attached to the annuity doesn't require also a
payment to charity.

Speaker 2 (29:53):
Okay, so whereas the pool trust does in a payback.

Speaker 3 (29:57):
Yeah, the pool trust has the lean the payback same
as annuity, but also you got to pay to charity
ten percent if it's under two years in the nursing home,
twenty percent to charity if you're in the nursing home
two years or more. Okay, So keep that in mind.
So let's assume we could do the annuity. So we
would take the four hundred thousand minus the two and

(30:18):
then we would buy a medicaid annuity. What is this
It's the ability to convert that money from an income
from an asset to an income stream. You basically do
it over her life expectancy. So when you're single, you
go to a table and like if you're seventy five
years old, it would be like a twelve year life expectancy. Okay,
so if she's eighty five, you know, maybe it's only

(30:39):
a six year life expectancy.

Speaker 2 (30:41):
So so you don't do it for her life. You
do it over the life expectance specific term. Right, you
can't do it, very good point. Don't say, oh, I
can do it over your whole life. I got this
much better product.

Speaker 3 (30:53):
You might. It might be a better product, but not
for nursing. But it ain't going to work for nursing homes.
So so make sure it's term certain. So let's say
we pick Let's say she's eighty five and there's a
six year life expectancy. So we take the three hundred
and ninety eight thousand dollars, we buy a Medicaid annuity.
It pays out over six years. Monthly interest is irrelevant,

(31:17):
it's small, but the moment you convert that to a
monthly income payment, it's now no longer an asset, and
like magic, she's worth two thousand dollars. So now she's
eligible for Medicaid, and you apply, and of course that
monthly check will come in and go to the nursing home.
But again, if you've got forty five hundred a month

(31:38):
coming in between the annuity, or five thousand a month
coming in between the annuity and your Social security Well,
Medicaid only costs sixty five hundred a month. There's a
fifteen hundred dollars a month lean attached to the annuity.

Speaker 2 (31:51):
Better than the fifteen grand amounth.

Speaker 3 (31:53):
Way better right in the check. And yes, with a
single person, you do need to name the state as
the beneficiary after you die for that payment. But so
what I've slowed the bleeding for Medicaid eligibility purposes, folks,
that's in the guide. An example like this about how
you can slow bleeding of exs assets is in there.
But more importantly, there's items in here that talk about

(32:16):
how to maybe save the asset altogether last minute. Who
can we transfer to last minute? Is there a caretaker child?
Is there a disabled child? Can the house just be
considered non countable if you're married? Might be right? What
about rental property? Can we make that non countable? Is
it leanable? Folks? There's things that can be done last minute,
And each asset is treated differently, and it's treated differently

(32:39):
if you're married versus single. This guide is for you
if you've never done planning, or if you've done planning,
call and get it. It will tell you how to
protect what's not protected last minute when you go to
a nursing home eight sixty six eight four eight five
six nine to nine or Legal Exchange Show dot com
again eight sixty six eight four eight five six nine

(33:02):
nine or Legal Exchange Show dot Com.

Speaker 2 (33:05):
Our last question comes from Betty and Norwood Mass and
Betty writes, I created my iryvocable trust with you in
twenty fifteen, leaving my assets equally to my children. My
daughter recently passed away. What do I need to do
to update my legal documents?

Speaker 3 (33:21):
Now?

Speaker 2 (33:21):
I want to make sure her children get her share.
Will this restart my five year look back if I'm
changing how I leave my assets?

Speaker 3 (33:30):
So she's got to trust. Let's just review this. She's
got the trust in place already since twenty fifteen year,
So that's great news, folks. Number one, that that's more
than five years ago. We're way beyond the five year
look back period. And again she was leaving assets equally
to kids, but now she wants to update that.

Speaker 2 (33:51):
Yes, one of her daughters passed away.

Speaker 3 (33:54):
And again, just so you understand, when you lose a child,
if it's going equally to my children and my grandchildren,
losing a child might not be a reason to change
your documents. So first I just want to let people
know because they might be listening thinking, oh I got
to run around changing my document every time a child
passes away or something not necessarily. So if you still

(34:16):
want to treat your children equally to the kids living,
if not living, that piece goes to that child's children, stop,
you don't have to change it.

Speaker 2 (34:26):
So that's pretty standard language in your trust, right And
she did hers with you, so that would be the
language that's.

Speaker 3 (34:32):
Oh oh yeah, I didn't see that yeah with me, yes,
so yes, So this probably would be in there already,
all right. And if that's still what you want, no
need to change it. Okay, great news. Hard stop now.
If on the other hand, for some reason, and this
would be rare, but it would have been something that
the client tells us, Oh no, Todd, I want to

(34:52):
treat my kids per capita. Well, again, no reason to
change it. If it goes equally to my kids, if living,
otherwise to the then living children, meaning if I have
three and one dies, then it goes two ways and.

Speaker 2 (35:05):
It gets split.

Speaker 3 (35:06):
That still works, right, So I'm concerned as to why
just because your daughter died that you would want to
change this one. I think it works in either direction. Now.
If you're saying, on the other hand that it was
per capita, but now you're realizing, no, I really want to.

Speaker 2 (35:23):
Take care of the child that dies kids, and that's
what she's saying here.

Speaker 3 (35:27):
And it wasn't that way, then yes.

Speaker 2 (35:30):
And maybe she doesn't realize that that's that's built in
to your trust that if living otherwise to their children,
You've already got that cover for her.

Speaker 3 (35:39):
I would already have that covered. So likely I already
have that covered. But just for fun, so we've answered
that question, you could you could make this change.

Speaker 2 (35:47):
So what if she hasn't lost a child. But she says,
all right, well, I was going to leave everything to
my kids. Now I want to maybe bring the grandkids in.
I'm like them a little bit more, and then she
wants to add them to the mix. Can she do that?

Speaker 3 (35:59):
Yeah? So she could then say I want to leave,
you know, ten percent to all my grandkids and only
ninety percent of my kids. Yeah, she absolutely could do that,
and there's language in the trust that allows you to
change the beneficiaries and that change will not affect the
five year waiting perce.

Speaker 2 (36:15):
Even though it's irrevocable, you can still change your mind.
How are you leaving things?

Speaker 3 (36:19):
You sure can, folks. Lots of flexibility in there. And
in case you've not done your planning and you're faced
with Medicaid eligibility, call and get this guide. It'll help
you not write the check without learning how to stop
the financial bleeding eight six six eight four eight five
six nine to nine or Legal Exchange Show dot com.

Speaker 2 (36:40):
If you have a question you'd like to ask Todd,
visit his website Legal Exchange Show dot com and click
on the ask Tod tab. Maybe I'll be able to
read your question on the air, and hopefully his answer
will stop you from becoming one of his next real
life stories. You've been listening to Todd Lutsky, a partner
with the law firm of Cush and Dolan. I'm Susan

(37:01):
Power as a financial advisor with the Armstrong Advisory Group.
We'll be back with more after this quick break on
the Legal Exchange with Todd Lutsky.

Speaker 1 (37:10):
Changes to Medicaid occur almost every year, and if you're
not informed, your assets could be at risk, especially if
you or your spouse need nursing home care. Cushing and
Dolan are experts in elder lam and their new guide
is called Last Minute Medicaid Eligibility. It'll help you understand
the Medicaid process, which is critically important if you're retired
or getting close to retiring. The guide has important information

(37:31):
regarding numerous strategies that can protect your assets from the
nursing home. It could be your primary home, a vacation home,
or any rental property you may own. You've worked hard
to achieve wealth, so don't take chances when it comes
to protecting it. Get your copy of Cushing and Dolan's
brand new guide called Last Minute Medicaid Eligibility call right
Now eight six six eight four eight five six nine nine.

(37:51):
That's eight six six eight four eight five six nine nine,
or you can request it online by visiting Legal exchange
show dot com. That's Legal exchange show dot com. The
proceeding was paid for in the views expressed are sole
lead those of Cushing and Dolan. Cushing and Dolan and
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.

Speaker 6 (38:10):
This is Michael Valila, adjudent of the Disabled American Veterans
Department of Massachusetts. We focus on the people returning from service,
not their specific illness or injury.

Speaker 3 (38:20):
Our number one goal is.

Speaker 6 (38:21):
To make sure our veterans have the necessary services they need,
be it physical, emotional, or financial, so that their transition
can be seamless. You can help our great American heroes
as well by making a donation today by visiting dav
five k dot Boston. That's dav five k dot Boston.

Speaker 1 (38:43):
Summers here in New England and it's the perfect time
to trade the daily routine for something extraordinary. Say hello
to the US Virgin Islands, America's Caribbean paradise. Explore the
vibrant history and flavor of Saint Croix. Lounge on the
stunning beaches of Saint Thomas, or find your peace on
the quiet shores of Saint John. From the moment you arrive,

(39:03):
you'll feel it. You're naturally in rhythm with the heartbeat
of the islands. There's no passport needed, no currency to exchange,
just warm weather, clear blue water and unforgettable experiences waiting
for you. Whether you're planning a romantic escape, a family adventure,
or a little of both. This is the summer. To
make it happen. Go to visit USVII dot com to

(39:24):
learn more and start planning. That's visit USVII dot com.
Your island getaway is closer than you think, the US
Virgin Islands where summer never ends. Book your trip today
at visit USVII dot com.

Speaker 4 (39:41):
Artificial intelligence isn't just the future, it's already shaping how
people think about their money. Hi, this is Chuck Zada
from the Armstrong Advisory Group. We've put together a new
guide called AI and Your Financial Plan. In it, we
explore the ways that AI is being used in financial technology,
from apps the track spending to tools that can help
identify trends. It's a rapidly changing space, and this guide

(40:04):
is designed to help you understand some of the potential
benefits and risks that AI may present. Want to learn more,
call eight hundred three nine three for zero zero one
and request your free copy of AI and your Financial Plan.
That's eight hundred three nine three for zero zero one,
or visit Armstrong Advisory dot com.

Speaker 1 (40:26):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. Your tune to the Legal Exchange with Todd Lutsky.
If you are a loved one needs a nursing homestay,

(40:47):
call Todd right now at eight sixty six eight four
eight five six ninet nine and let him make sure
your assets are protected. That's eight six six eight four
eight five six nine nine, or visit him online at
Legal Exchange show dot com.

Speaker 2 (41:01):
Welcome back into the Legal Exchange with Todd Lutsky. I'm
Susan Powers, a financial advisor the Armstrong Advisory Group, and
I'm joined of course by Todd Lutsky, a partner with
a law firm of Cushing and Dolan with a masters
in taxation. So, Todd, we're focusing this month on kind
of navigating the whole medicaid process when someone goes into

(41:22):
a nursing home. Yeah, so you have made comments throughout
the show that this guide is good for people who
have not done their planning and people who have done
their planning, because not necessarily everything goes into your trust.
These are the people that have done the planning. Is
is it just retirement accounts typically that you kind of

(41:44):
have to plan for a last minute when they've done
their planning.

Speaker 3 (41:46):
Yeah, So even if you've done your planning, Remember you're
definitely right, Susan, you're not going to be putting any
IRA qualified plan money in the trust. Just can't. You
got to beg income tax. And but you know what
I always tell people, there's nothing wrong. You always have
a personal bank account or two or three that you
leave outside the trust. How much you leave in that
personal bank account is really up to you and your needs. Yeah,

(42:09):
but you always leave one out, mainly because your social
Security and your pension checks cannot be deposited into an
account in the name of the trust, so you got
to leave it out to catch those dollars. So, yes,
it's going to be a combination of money that might
be outside the trust in a bank account and IRA assets. Generally,

(42:30):
there may also be a life insurance policy that you
couldn't put in the trust during life and you might
have to deal with that, and in.

Speaker 2 (42:36):
That is typically because you're still making premium payments.

Speaker 3 (42:40):
Typically, if you don't have enough money in the trust
to make the premium payment, then you really can't put
the life insurance in there because every time you make
a premium payment, you would have a new five year
waiting period. Got it, So it pretty much leave those out.

Speaker 2 (42:53):
Yep, got it? Okay, So let's talk about the assets.
Help people understand what's actually at risk, because you want
to try and put as much as possible that's at
risk into your trust. So let's explain what is actually
at risk. So I want to look at it from
both the perspective of a married couple as well as
a single person. Okay, the home is usually very often

(43:15):
the largest asset for folks. It is, how is it
treated for a married couple?

Speaker 3 (43:19):
This is an asset not in the trust? Correct you we've.

Speaker 2 (43:23):
Not seen Yeah, nothing in the trust yet?

Speaker 3 (43:26):
So nothing in or this person just didn't do planning,
because clearly, I think the first answer would be if
you did planning, the house would be in there, right
and it would be protected. End story.

Speaker 2 (43:35):
So this is just assuming there's no planning done. So
what's at risk.

Speaker 3 (43:38):
So if there's nothing done and we're doing it, did
you say for a married couple.

Speaker 2 (43:42):
For a married couple, first, how is the home treated
in terms of being at risk or not?

Speaker 3 (43:46):
So the home is a special asset. It's considered noncountable.
And I'm going to say this if located in Massachusetts,
because I'm assuming you're in mass and your houses in
mass and going into a nursing home in mass So
it says the statute says the home is non countable

(44:06):
if located in Massachusetts and the survive or the healthy
spouse is living there, there is no valuation limitation. It
can be a ten dollar home. It's still protected, no
valuation limitation, and no lean rule applies. So no matter

(44:30):
how expensive the house is, it's non countable for the
healthy spouses living there. So when the six spouse goes
into the nursing home, they don't count this as an
asset and the state cannot put a lean on it
home run for the house. One caveat it's likely that

(44:53):
that house was also owned jointly.

Speaker 2 (44:56):
Yes.

Speaker 3 (44:57):
Can you leave it that way and still get on
medicaid for him? Yes? Should you know? Come so you
don't want to leave it jointly owned because if the
spouse that's at home dies out of order, right, you
hate when that happens. They shouldn't do that. Then that
half of the house would go to the six spouse
who's in the nursing home. And now the house is

(45:19):
one hundred percent exposed because it's only owned by the
nursing home applicant. And we can talk about a single
person in a minute, but so we would want to
change the ownership of the house to put it in
her name alone.

Speaker 2 (45:33):
And would you do that after he's qualified for medicaid?

Speaker 3 (45:36):
Doesn't really matter. It's a non countable asset. So you
do got to do it within ninety days of approval,
no matter what God, So you do got to you do,
got to move it. So, folks, that's just a little
bit of an of one asset. That's just half the
treatment hate of one asset. We've got rental properties, vacation homes,
life insurance, we've got four to oh one K accounts,

(45:57):
we've got IRA accounts. Folks, assets are treated differently depending
on their accountability status and whether you're married or single.
And there's techniques like annuities and pooled trusts, and caretaker
child exceptions explained in here to do things that might
actually save the asset completely. So learn what to do

(46:18):
last minute. Don't just write a check to the nursing home.
Even if you've not done planning and you think you
can't get eligible, odds are you probably can call and
get the guide last minute Medicaid Eligibility eight six six
eight four eight five six nine nine or Legal Exchange
show dot com again eight six six eight four eight

(46:41):
five six nine nine or Legal Exchange Show dot com.

Speaker 2 (46:46):
Okay, so that's for married couple married only yep. How
about if a single person owns a home and goes
into the nursing home. How do they treat that home?

Speaker 3 (46:54):
Yeah, very very differently. So first of all, is it
non countable? Initially you have to check a statute and
see how this applies. It says, if you go into
a nursing home, the house is non countable provided somebody
as special as living there, which let's say we don't
have any of those, like a spouse or because you're single,

(47:16):
or a disabled child or any of those things. Then
you go all the way down the list and you say, oh,
the only way to make this non countable if nobody's
living there. That would protect it is check a box
believe it or not on the application that says I
intend to return home.

Speaker 2 (47:35):
So what happened? I mean, if you're going into a
nursing home, you likely can't go back home again. So
does it depend on their health status or Nope?

Speaker 3 (47:44):
Completely subjective.

Speaker 2 (47:46):
So they just have the I intend to let's stay
here forever.

Speaker 3 (47:49):
I'm not staying here, I'm going home, and so you
check that box. Make sure you check that box. If
you check that box, then the house becomes non accountable.
But that's just the beginning test. Now there's other rules
that apply. Now, you got to look to a valuation test, right,

(48:10):
So first and foremost, if the house is worth more
than or if you have an equity interest that exceeds
I check. I think it's like a million, one hundred
and thirty three thousand dollars or something like that. Today
a million call it a million one for easy numbers
here in mass different for other states. So let's say

(48:34):
as long as the if the value of the house
was a million two hardstop, you're denied medicaid. That's how
powerful HOS is. You're going to be denied medicaid. Now
if you again you have to have an equity interest
that exceeds. But again, if you you can't go borrow
the money because if you borrow the money to bring
down the equity, now you mat a bunch of money.

(48:56):
You have a bunch of money in your bank account,
and that's going to make you ineligible because you have
more than two thousand and then you pay off the
debt in your back. It's a circle. So that's a
hard stop. So let's assume for the moment that we've
checked the box and yes, it's worth less than a
million one ish, are we eligible? Well, at least we
know the house is non accountable, so the house by

(49:16):
itself will not prevent you for becoming eligible for medicaid. However,
unlike with a married couple, this house will be leaned.
They will put a lifetime lean on it and of
course an at death lean on it. So if you
sell it during life, they're going to want paid back

(49:37):
for whatever services they provided. Makes sense, My advice likely
would be, please don't sell it during life, because if
you convert it to money, might be a lot harder
to protect those dollars. How am I going to protect
those dollars. Is the annuity going to work? Do I
have to do a pool trust? So selling it isn't
always the best bet. Renting is fine, you don't have

(50:00):
too but keeping it and then you get a step
up in basis and even if there is a lien
on it when you die, because they will put a
lien on a death, the kids could sell it no
capital gains tax because they got to step up in basis.
And you know what if we got to pay a lien,
we pay a link yep or keep it right and
pay off the lian. And you've got a nice rental
property with a step up in basis. You can always

(50:22):
mortgage it, folks. That's just the house. Get the guide.
Other assets are also available to be saved last minute.
Just got to learn what to do with each asset
and whether you're married or single eight six six eight
four eight five six nine nine or legal exchange show

(50:42):
dot com.

Speaker 2 (50:43):
Todd Lutsky from the law firm of Cushing in Dolan,
thank you so.

Speaker 3 (50:47):
Much, Thank you, Susan. It's always a pleasure.

Speaker 2 (50:49):
I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
We thank you for joining US today and we'll be
back again next week on the Legal Exchange with Todd Lutsky.

Speaker 1 (51:00):
Changes to Medicaid occur almost every year, and if you're
not informed, your assets could be at risk, especially if
you or your spouse need nursing home care. Cushing and
Dolan are experts in elder lam and their new guide
is called Last Minute Medicaid Eligibility. It'll help you understand
the Medicaid process, which is critically important if you're retired
or getting close to retiring. The guide has important information

(51:20):
regarding numerous strategies that can protect your assets from the
nursing home. It could be your primary home, a vacation home,
or any rental property you may own. You've worked hard
to achieve wealth, so don't take chances when it comes
to protecting it. Get your copy of Cushing and Dolan's
brand new guide called Last Minute Medicaid Eligibility call right
Now eight six six eight four eight five six nine nine.

(51:40):
That's eight six six eight four eight five six nine nine,
or you can request it online by visiting Legal exchainshow
dot com. That's Legal Exchange show dot com. The proceeding
was paid for in the views expressed are solely those
of Cushing and Dolan. Cushing and Dolan and or Armstrong
Advisory may contact you offering legal or investment services. Cushing
and Dolan and Armstrong Advisory do not endorse each other
and are not a fit.

Speaker 5 (52:00):
Artificial intelligence is constantly evolving and can even be a
revolutionary asset to a financial strategy.

Speaker 3 (52:06):
HI.

Speaker 5 (52:06):
This is Mike Armstrong from the Armstrong Advisory Group. Our
new guide is called AI and Your Financial Plan. In it,
we explain how artificial intelligence continues to make inroads into
our daily lives and how the advent of its technologies
may affect an existing or future financial plan. AI serves
the public in a variety of ways, from apps to
monitor personal finances to tools that analyze investments. AI is

(52:28):
not the future anymore. Its effect is felt by businesses
of all kinds on a daily basis. Call us today
at eight hundred three nine three four zero zero one
and ask for your free guide. That number again is
eight hundred three nine three four zero zero one, or
you can request the guide online by visiting us at
Armstrong Advisory dot com.

Speaker 1 (52:46):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory soervices. Summers here New England, and it's the perfect
time to trade the daily routine for something extraordinary. Say

(53:08):
hello to the US Virgin Islands, America's Caribbean paradise. Explore
the vibrant history and flavor of Saint Croix. Lounge on
the stunning beaches of Saint Thomas, or find your peace
on the quiet shores of Saint John. From the moment
you arrive, you'll feel it. You're naturally in rhythm with
the heartbeat of the islands. There's no passport needed, no

(53:28):
currency to exchange, just warm weather, clear blue water, and
unforgettable experiences waiting for you. Whether you're planning a romantic escape,
a family adventure, or a little of both, this is
the summer to make it happen. Go to visit USVII
dot com to learn more In start planning, that's visit
USVII dot com. Your island getaway is closer than you think.

(53:51):
The US Virgin Islands, where summer never ends. Book your
trip today at visit USVII dot com.