Thank you Mr, Robbins and everyone for some great advice. I will follow up when I figure this out. hopefully I can help someone in the future after this experience!
My family has been into Dad being in a nursing home for the past year and finding and getting answers as how to handle the assets has been a difficult process....I suggest talking to as many people as you can think of regarding this situation if your parents have not protected their assets with a trust, etc 5 years ago. A county economic support person, an attorney, the aging and disability dept at the county, people who have experienced this recently. The laws keep changing and there is not a lot of written information/instruction out there. I am finding some things can be paid ahead, 2 vehicles kept by community spouse if you have a dr note saying it would be beneficial for the disabled person to have one...now the co said 1 veh period, attorney said two as long as the second is a handicap one.... What really made thinks click for me was when the county economic support person said that just think of to qualify for MA for the disabled, institutional spouse...as one day where the $ hits the $ required. After that the community spouse can go over that amount again. Again, ask an attorney to be sure of anything you wonder about, but don't think they will give you all the ideas you may like to know for how to spend in a protected way...to get to the required amount.
Given the minimal assets involved, your parent’s case is not complicated (though I understand that this is a whole new world to you and indeed it does seem complicated).
I discussed the life insurance policy issue above and with the disclosure of the second policy my suggestions still apply. The first step here is to determine if the cash values put dad over the $1,600 limit. If so, you can probably designate one or both as “burial funds” as described above. Or, another option I did not discuss previously, is to withdraw from the policies an amount that will bring the cash values below $1,600 and transfer it to mom.
There is an issue with respect to income. Your father’s income exceeds the maximum permitted of $2,130 per month. In Connecticut this is handled by having the applicant “spend down” income on cost of care as opposed to creating an Irrevocable Qualified Income Trust which is the way it handled in many other states.
An outline of the rules published by the State of CT can be found here: http://www.ct.gov/dss/lib/dss/pdfs/ltc_issues.pdf and I’m sure a conversation with someone in the Department of Social Services (or more easily and perhaps more helpful, the social worker at the facility where dad will be residing) will clear things up for you.
Have a look at the application itself. Doing so may help you determine if the process is something you can handle by yourself.
idfamilyinc, you need to talk this all over with a county case manager. They can fill you in on the ins and outs. Do your parents qualify based on earnings and assets for Medicaid? My mother has far less income and no assets (except for the $700 funeral insurance plan) and with the standard of $959 a month that you are "allowed" to keep it was questionable whether her medical expenses etc. were high enough to avoid a large spenddown.
Mr. Robbins, here are the answers to your questions. My parents only assets are 2 group universal life policies. The owner is my father for both. One is on my mom for $10,000 and one is on dad for $30,000. His social security is $1670,00, pension is $575.09 and veterans benefit is $129.00. Totaling $2,340.09. I am the power of attorney, for healthcare and I take care of all their financials which is basically just paying their bills. They also do not own any homes or properties.
vankeurengroup... Establishing an Irrevocable Funeral Trust is a good strategy and makes a lot of sense for many Medicaid applicants. Depending on the state, anywhere from apx. $5,000 to $12,500 (or possibly more) can be set aside by both the applicant and the spouse for last expense purposes. In this case, however, we are talking about an existing policy which, because of its low cash value, is easily managed without creating a trust for the policy. Moreover, doing so would be a bit cumbersome in that this is an existing policy not part and parcel of a pre-paid funeral arrangement and a funeral provider would have to be found that would accept assignment of the contract which most are not, in my experience, wont to do. Way too much trouble in this instance. BTW...funeral trusts AND the burial accounts I mentioned above can both be funded prior to application (in some states, like Florida, up to $2,500 can be set aside in burial accounts).
jdfamilyinc... I would never advise one to seek or not to seek counsel. That is a determination you must make. Maybe, though, I can help you get there. First let's make sure we have covered all the bases. Assets: You said there are none except the life insurance policy. Is that accurate? Bank accounts, brokerage accounts, savings bonds, stocks, bonds, mutual funds, IRA's? Real estate including a personal residence? If a personal residence how is it currently titled? Income: Does dad earn more than $2,130 per month gross inclusive of Social Security, Pension, investment income, or any rents, promissory notes or mortgages? Lastly, estate planning documents. Are powers of attorney, health care surrogates (aka power of attorney for healthcare), and wills or will substitutes (e.g., revocable living trust) in place? Let me know....
I am in Minnesota and the County made me change the beneficiary on my mother's prepaid burial insurance plan to the "estate". They can't get their hands on it anyway because it is irrevocable and there is a statement of "goods and services" from a local funeral home that she picked to handle her cremation and service (meaning the money is only there for her funeral expenses and even at that amount it isn't enough to cover everything). You can have a funeral trust and as long as it is irrevocable (you can't get the money) and payable to the estate of the deceased, then the surviving spouse can use it for the burial expenses and Medicaid can't come after it. Does the insurance policy state that it is for funeral expenses? Is there a statement of goods and services attached to it? Is it irrevocable? Is the beneficiary the estate of the decedent? Then Medicare can't touch the funds. In fact, they can't touch the policy at all. As for whether you can continue to make the payments, are you the power of attorney or the representative payee on Social Security?
Mr. Robbins, Thank you for your help! I have another question for you. Would it be wise to talk to an eldercare lawyer about this , or can I do this without getting a lawyer involved?
Here is how it works in Connecticut (other states have similar rules but the particulars may be different):
Income: Mom is designated as the "Community Spouse". Federal and state law contains "spousal impoverishment provisions" concerning both income and assets. Mom is entitled to retain, in 2013, between a minimum of $1,891 and a maximum of $2,898 (depending on her evidenced need) of the couple's combined income.
Life Insurance: If the face amount (death benefit) of a policy or policies exceeds $1,500 then the cash value of the policy or policies are considered countable assets for eligibility purposes. Dad is permitted to retain up to $1,600 in assets. If he owns the policy you can deem it his only countable asset.
If the policy allows transfer of ownership (which it may not because it is a group policy) you might consider transferring the policy to mom who is permitted (in 2013) to retain one-half the couple’s combined countable assets above a minimum retention level of $23,184 up to $115,920.
But the easiest way to handle this will be to simply designate the policy as a “burial fund”. Both mom and dad are permitted to set aside $1,500 each as a burial account. I haven’t seen a Connecticut application but most will ask if there is an asset or a portion of an asset that you wish to deem a burial fund.
Regardless of who ends up owning the policy you or mom can pay the premiums.
I am in Connecticut. another question I have is: Parents only have a $30,000 Group Universal Life ins. policy, cash value is only $1,125.00 If I give medicaid the cash value with my money, and ask if I can take over the payments of the policy, I wonder if medicaid would go for it?? That money is supposed to pay for both my parents burials. They do not have anything in writing as far as that either. its a nightmare...
The community spouse get's to keep "assets" above the $ 2,000.00 that the NH on Medicaid spouse is allowed to have. Most states have the asset ceiling for community spouse at $109,000.00 but some states have it lower. You need to find out what CT has. Remember this is for "assets"
If your mom has been totally dependent on dad's "income" to make ends meet, then she will need to ask for and apply for "monthly maintenance". Think of it as kinda like alimony. The monthly seems to be on the low side and she may have to go to court to petition to have it increased. If she still has a mortgage or has to pay rent, or has significant medical expenses then it's likely she will need more than what the usual monthly rate is. Medicaid rules tend to be base on a 1960's mentality of marriage and it's expected that the couple would have owned their home by now and have no debt. Yeah, sure. What would be helpful is to do a detailed list of the expenses mom will have to pay on her own - insurance, rent, credit cards, all other annual debt, food, utilities, etc - so that you can prove that mom needs more or all of dad's SS check of $ 600.00 a month. Good luck.
Probably not. There are provisions for the community spouse when a married person goes on Medicaid and into a care facility. The application form and the annual renewal form are slightly different depending on whether the spouse is to get some of the Medicaid recipient's income.
Given the minimal assets involved, your parent’s case is not complicated (though I understand that this is a whole new world to you and indeed it does seem complicated).
I discussed the life insurance policy issue above and with the disclosure of the second policy my suggestions still apply. The first step here is to determine if the cash values put dad over the $1,600 limit. If so, you can probably designate one or both as “burial funds” as described above. Or, another option I did not discuss previously, is to withdraw from the policies an amount that will bring the cash values below $1,600 and transfer it to mom.
There is an issue with respect to income. Your father’s income exceeds the maximum permitted of $2,130 per month. In Connecticut this is handled by having the applicant “spend down” income on cost of care as opposed to creating an Irrevocable Qualified Income Trust which is the way it handled in many other states.
An outline of the rules published by the State of CT can be found here:
http://www.ct.gov/dss/lib/dss/pdfs/ltc_issues.pdf and I’m sure a conversation with someone in the Department of Social Services (or more easily and perhaps more helpful, the social worker at the facility where dad will be residing) will clear things up for you.
Have a look at the application itself. Doing so may help you determine if the process is something you can handle by yourself.
Establishing an Irrevocable Funeral Trust is a good strategy and makes a lot of sense for many Medicaid applicants. Depending on the state, anywhere from apx. $5,000 to $12,500 (or possibly more) can be set aside by both the applicant and the spouse for last expense purposes.
In this case, however, we are talking about an existing policy which, because of its low cash value, is easily managed without creating a trust for the policy. Moreover, doing so would be a bit cumbersome in that this is an existing policy not part and parcel of a pre-paid funeral arrangement and a funeral provider would have to be found that would accept assignment of the contract which most are not, in my experience, wont to do.
Way too much trouble in this instance.
BTW...funeral trusts AND the burial accounts I mentioned above can both be funded prior to application (in some states, like Florida, up to $2,500 can be set aside in burial accounts).
I would never advise one to seek or not to seek counsel. That is a determination you must make. Maybe, though, I can help you get there.
First let's make sure we have covered all the bases.
Assets: You said there are none except the life insurance policy. Is that accurate? Bank accounts, brokerage accounts, savings bonds, stocks, bonds, mutual funds, IRA's? Real estate including a personal residence? If a personal residence how is it currently titled?
Income: Does dad earn more than $2,130 per month gross inclusive of Social Security, Pension, investment income, or any rents, promissory notes or mortgages?
Lastly, estate planning documents. Are powers of attorney, health care surrogates (aka power of attorney for healthcare), and wills or will substitutes (e.g., revocable living trust) in place?
Let me know....
Thank you for your help! I have another question for you. Would it be wise to talk to an eldercare lawyer about this , or can I do this without getting a lawyer involved?
Income: Mom is designated as the "Community Spouse". Federal and state law contains "spousal impoverishment provisions" concerning both income and assets. Mom is entitled to retain, in 2013, between a minimum of $1,891 and a maximum of $2,898 (depending on her evidenced need) of the couple's combined income.
Life Insurance: If the face amount (death benefit) of a policy or policies exceeds $1,500 then the cash value of the policy or policies are considered countable assets for eligibility purposes. Dad is permitted to retain up to $1,600 in assets. If he owns the policy you can deem it his only countable asset.
If the policy allows transfer of ownership (which it may not because it is a group policy) you might consider transferring the policy to mom who is permitted (in 2013) to retain one-half the couple’s combined countable assets above a minimum retention level of $23,184 up to $115,920.
But the easiest way to handle this will be to simply designate the policy as a “burial fund”. Both mom and dad are permitted to set aside $1,500 each as a burial account. I haven’t seen a Connecticut application but most will ask if there is an asset or a portion of an asset that you wish to deem a burial fund.
Regardless of who ends up owning the policy you or mom can pay the premiums.
its a nightmare...
If your mom has been totally dependent on dad's "income" to make ends meet, then she will need to ask for and apply for "monthly maintenance". Think of it as kinda like alimony. The monthly seems to be on the low side and she may have to go to court to petition to have it increased. If she still has a mortgage or has to pay rent, or has significant medical expenses then it's likely she will need more than what the usual monthly rate is. Medicaid rules tend to be base on a 1960's mentality of marriage and it's expected that the couple would have owned their home by now and have no debt. Yeah, sure. What would be helpful is to do a detailed list of the expenses mom will have to pay on her own - insurance, rent, credit cards, all other annual debt, food, utilities, etc - so that you can prove that mom needs more or all of dad's SS check of $ 600.00 a month. Good luck.