Medical Assistance Planning
A Family Legacy Since 1920
• Family and Locally Owned
• Compassionate Legal Experts
• Family and Locally Owned
• Compassionate Legal Experts
Prepare and Preserve Your Future
The old way of handling divestment for purposes of estate planning was to simply give away assets for less than their fair market value. Because of recent changes in federal law this is no longer considered a viable tool for medical assistance planning or asset protection. Now, it is strongly recommended that if your assets are below $250,000, primarily consisting of your home, do NOT give any of your assets away to anyone without first talking to an attorney about the possible negative consequences of this strategy.
Avoid this mistake — contact Schmidt & Schmidt S.C. today and learn about what you can
do.
Medical and Nursing Home Planning
The high cost of medical care and nursing home care can wipe out everything that a person has worked hard for, saved or acquired over the course of a lifetime. With the average cost of a nursing home being over $6,100 per month, an individual’s or a couple’s savings could be consumed in a manner of a year.
Because of the severe negative consequences of doing the wrong action, significant advance planning is necessary to avoid a situation where you or your loved ones have to sell your assets just to pay for your medical or nursing home care. This goal can be accomplished with the help of an experienced elder law lawyer.
All you need to do is call.
At Schmidt & Schmidt S.C., we help people in Wausau, Marathon County, and throughout North Central Wisconsin to protect the assets of their estate from the high costs of health care and nursing home needs. We do this through careful medical and nursing home planning and through the use of effective asset protection strategies. However, the important thing to remember is that there is no better time than right now to take this critical step.
Medical Assistance Planning FAQ
NOTE OF WARNING:
In early February 2006, Congress made [eliminated] major changes to the “Divestment Planning” tools that have been used by attorneys and financial advisors for many years. [Deficit Reduction Act of 2005.]
As of this writing “Divestment” – the giving away of assets for less than fair market value – is no longer considered a viable tool for planning. We strongly recommend that if your assets are below $250,000.00, primarily consisting of your home, do NOT give any of your assets away to anyone without first talking to an attorney about the many negative outcomes that will befall you.
Doing the Right Thing for Aging Loved Ones
Most people who visit this page are the children of those likely to go into a nursing home in the near future. Dealing with our parents is at times more challenging than dealing with raising our children.
We love our parents and they love us. But the stresses of making these decisions are so often seen as the last resort, the final step, or the first nail of the coffin. Emotions run high. So high that no one wants to talk about the nursing home, financial assistance, medical assistance, Medicaid, assisted living options, COP programs, property divestment, burial instructions, funeral trusts or any other elderly-related subject.
A Brief Story
Several years ago, Andrew was sitting at the dining room table with his inlaws and his wife’s siblings. During a discussion on end-of-life planning, one of the siblings asked, “So Dad, where is your will kept?”
You would have thought Andrew had asked his father-in-law to jump over the moon! He would not tell nor would he reveal who drafted it. “Some things are just to be kept private,” he argued. “You’ll find out when I die!” Since then no one has asked a single related question.
This response is so very wrong! Yet it is uttered in about half of the families we assist. If your parents are asking you to take care of them at the end of their lives, when they can no longer take care of themselves or upon their death, their financial and legal affairs would be a lighter burden upon you knowing ahead of time where, what and how critical information is kept.
With a month in a skilled nursing facility costing about $6,700, or $80,400.00 per year, few Wisconsinites have the cash or resources to pay this kind of monthly expense. If your parents have a home, a couple of cars, life insurance, some CDs, annuities, a vacation cabin, and an IRA you will face the obligation of selling ALL of them to pay for skilled nursing care.
We invite you to speak with one of our attorneys. Schmidt & Schmidt S.C., will create a Medical Assistance Plan that is age, marriage and income appropriate taking into account the huge number of variables each family has. Below are answers to questions:
Medical Assistance Planning for Long Term Care
Not all of us will be so lucky to never need the use of a nursing home. Some of us may need these services for a few weeks, others a few years. A “nursing home” is not an Assisted Living Center or a Community-Based Residential Facility. It is a facility with skilled nursing care.
It is this skilled nursing care that is so very expensive. A month in a nursing home here in central Wisconsin can cost upwards of $7,000 per month! A year of such care can cost over $80,000 for one person. For the average Wisconsinite such spending will consume all that the patient has saved. Further, what if there is still a surviving spouse healthy and well living at home? Living in sheer poverty should not be the end result of such families.
Please keep in mind that financial impoverishment is not necessary. With the assistance of the Wausau attorneys at Schmidt & Schmidt S.C., going broke does not have to happen to you, your parents, or other loved ones.
Many of our clients are children with elderly parents. We will work with the whole family in researching, developing and implementing various estate planning and medical assistance planning programs to help those who are likely to need the services of a nursing home.
Medical assistance planning is not illegal. It is as legal and necessary as income tax planning. The tools used in medical assistance planning are (1) spending and conversion of assets and (2) divestment and other gift planning.
Key Components of Medical Assistance Planning
Several asset types are not counted as “assets” for medical assistance. These are assets you can keep and need not be sold or given away to qualify for medical assistance. These include the home, some cash savings ($2,000 if single or up to $107,000 if married), prepaid funeral and burial, minute life insurance, personal property, and an automobile. Many of these assets are limited in quantity.
However, a "medical assistance" lien will be placed on your home if you are single or your spouse needs the services of a nursing home too.
The look-back period for property given away for no less than fair market value is 60 months or 60 months if you have transferred property to any type of trust.
When you give away property you create a period of ineligibility for medical assistance. This period of ineligibility (months) is the quotient of the value of the gift over the Average Cost on a Month in Nursing Home (recalculated yearly by state of Wisconsin). Example: Month in nursing home ($7,500) over value of gift ($19,000) or 49,000/7,500 = 6.5 months of ineligibility.
Ineligibility starts with the month of the gift and fractions of a whole month are eliminated. Thus, in the example above, the gift-giver will not be able to receive long-term care through medical assistance for six and a half months after the applicant has applied.
The Long-Term Care component of medical assistance is changing and Congress is reviewing many aspects of the program for budget purposes. This will make planning ever more necessary.
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