Lawyer Monthly - June 2022

WWW.LAWYER-MONTHLY.COM | JUN 2022 ELDER LAW - MATTHEW MOORE 24 assistance are the two most common issues I see my clients encounter. Many clients automatically assume that their spouse or their children can do anything on their behalf, so they do not prepare any estate planning documents. Then a substantial life event occurs and they do not have the proper legal paperwork to address the situation. Second, clients often try to either do their own legal documents or seek advice from someone who is not trained in this area. I often tell my clients: “I am not a plumber, so when I have a leak, I call a plumber to fix it correctly. I would rather pay someone to do it correctly than have a problem later on.” This is the same for legal work. You may be able to print forms off the internet more cheaply than having an attorney prepare them, but you do not know what you may be missing. You may have a correctly executed document, but you will still have no planning for that document – the most important part. The same can be true if you do not use an attorney who is skilled in this area. If you go to a general practice attorney to ask questions about Medicaid or advanced estate planning, they will not be able to answer the questions correctly. This can cause substantial financial losses, simply because clients did not seek proper assistance. Many This belief is also untrue. Although there will be some consequences to making a gift within the five-year time period, we are still able to protect assets for the individual’s future needs and also for their heirs. Again, too many times we see clients who are under the impression that there is nothing they can do and spend all of the individual’s assets on care prior to seeking our assistance. Do these considerations vary significantly from those seen in other states? Yes, these rules can vary significantly from state to state, so clients should always seek assistance from a trained professional in their home state. How can one’s assets or savings affect the availability of treatment under Medicaid? This is an extremely complicated question. First, as I mentioned previously, it depends on whether we are dealing with a married couple or a single individual. With a married couple, the types of investments can influence Medicaid eligibility more than in a single’s situation. For example, the retirement accounts of a community spouse are considered “exempt” assets for Medicaid, so in a couple’s situation we would not have to do any planning for the community spouse’s IRAs. In a single’s case, all accounts are considered countable assets, so more complicated planning would have to occur. In both situations, income-producing real estate could be considered an exempt asset, so clients may consider purchasing property as a planning technique. This is why planning in advance becomes some important, as clients can work with a skilled attorney to discuss the various options and the risks and rewards associated with each option. Tactical use of income-producing property can be a very useful technique in couples’ cases, especially if they have significant assets. Under Indiana Medicaid rules, income-producing property is exempt as an asset for Medicaid eligibility. So, if a couple has to “spend down” assets in order to qualify, they may decide instead to purchase some real estate to complete this spend down. For example, they could buy more farmland or a vacation home. This would allow them to essentially transfer countable assets (cash assets) into an exempt asset which has immediate value to them. Then the community spouse could decide to sell this property in the future without jeopardising the Medicaid eligibility of the spouse needing those services. The biggest caveat to this planning option is to understand that even though income-producing real estate is initially exempt from Medicaid eligibility, you still need proper planning, as it is still an asset potentially subject to Medicaid estate recovery. What issues are particularly common for elderly married couples to encounter? I think the failure to properly plan in advance and failure to seek proper

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