Several months ago, my columns featured the use of the VA Aid and Attendance Benefits and the Colorado Long Term Care Partnership. In this article is an overview of planning for Medicaid eligibility so you have a better understanding of how they work together. Here is the disclaimer: I am not an attorney and don’t want to be an attorney; I like what I do! Please seek competent legal counsel.Planning: Incapacity? Who … me? The famous one-liner from MAD Magazine’s Alfred E. Newman is essential to how many of us think about being incapacitated. Planning is an essential part of your estate plan and is a very complicated and detailed area of the law. This includes how you are cared for if you become physically or mentally unable to care for yourself. The type of care could range from simple tasks like buying groceries, paying bills and handling financial matters, to more important decisions such as selling real estate or gifting assets to your children.Within the realm of incapacity planning there are also arrangements that deal specifically with decisions regarding steps taken to obtain Medicaid benefits. A trust with Medicaid “triggers” comes into play by allowing your agent to move forward with decisions you would have handled yourself if you were legally competent to do so. The types of decisions required in this area of planning can vary. For instance, you may outline instructions for a nursing home stay or the repositioning of assets to allow you to qualify for Medicaid, while preserving assets for the next generation if you are single and protecting your spouse’s financial independence.Because there is a 50-50 chance that the average adult will spend at least one year in a long term care facility, it becomes painfully clear this type of planning is not only important, but requires immediate attention to ensure you and your family protect your assets.Even with the knowledge that our life span is increasing, many of us will encounter chronic or debilitating illness in our final years. While these medical challenges can change our lives dramatically in the physical sense, they can also wreak havoc in our financial lives if we haven’t taken the appropriate measures to safeguard our wealth. Nursing homes today can cost as much as $74,000 each year or more, and a long-term stay can easily impoverish all but the wealthiest families. This is where long term care insurance and the Colorado Long Term Care Partnership come into play.Plan now: The question of when to begin incapacity planning is fairly easy to answer. Since we cannot be sure how soon, how late or even if tragedy will strike, implementing the necessary changes as soon as possible brings peace of mind knowing that you are covered should you become legally incapacitated.Let’s review some of the general reasons why having a formal plan such as a living trust is important. With a living trust, you can avoid the delay, time, cost and publicity of a living probate; provide for a surviving spouse or other beneficiaries; safeguard your children’s inheritance from ex-spouses and creditors; ensure that special needs beneficiaries or loved ones who receive government benefits do not lose these benefits such as Medicaid, Social Security income and in-home supportive services.These are documents and language to remember: health care power of attorney, durable power of attorney for property, health care proxy, gifting language and Medicaid triggers.Planning is essential for you and your family. Regardless of how solid your health is today, there is no way to know what tomorrow brings. With the proper plan in place, you can rest easy knowing that whatever the future holds, you have formally outlined your wishes and made the proper arrangements for you and your family. If you are in need of a list of attorneys who do this type of planning, please contact my office.Colorado Comprehensive Wealth Management719-886-3377Registered Investment Advisory RepresentativeSecurities America Advisors Inc.Member NASD, SIPCFor more information, visit www.donnellservices.com
