Counsel For Elder-Specific Legal Matters

Parents and grandparents often represent some of the biggest role models in our lives. They represent where we come from, model who we want to become, and offer advice to guide us along the way. Supporting family as they age can be a trying process at times, but the counsel of a qualified elder law attorney provides peace of mind, so that you can be sure that your family members’ rights are protected, even as they age.

Attorneys specializing in elder law provide expertise in many elder-specific legal topics, including:

  • Estate planning
  • Medicare planning strategies
  • Medicare qualification and application
  • Medicare claims and appeals
  • Supplemental and long-term health insurance
  • Social Security and disability claims and appeals
  • Appointment of powers of attorney
  • Financial management and delegation of management in case of incompetency or incapacity
  • Probate and estate administration
  • Medicaid Eligibility, Planning, and Application

    Medicaid is a joint federal and state insurance program. Within Medicaid, there are many smaller programs, each meant to benefit a different group of people. Each Medicaid program has its own guidelines for eligibility and coverage, and what is covered under Medicaid also varies between states.

    Many Medicaid programs for people who have not yet reached 65 years of age determine financial eligibility using a Modified Adjusted Gross Income (MAGI) method. Under this methodology, taxable income and tax filing relationships are used to determine whether an individual is eligible for Medicaid. People 65 years old and older (and others whose eligibility is based on blindness or disability) are exempt from MAGI-based income guidelines. Instead, income eligibility follows the methodologies of the SSI program administered by the Social Security Administration.

    Many people who qualify for Medicaid will end up needing long-term medical care as they age. Often, Medicaid covers at least part of the cost of these services. Seeking the counsel of a qualified attorney can ensure that one’s monthly income and eligible assets do not render them ineligible for Medicaid, and can also help develop a plan to cover the high costs associated with long-term care that are not covered. An attorney can also assist in the appeals process should coverage be denied.

    What Is The Difference Between Medicare And Medicaid?

    Medicare is a federal health insurance program for people 65 years of age and older, or younger people with qualifying disabilities or health conditions. Because Medicare is a federal program, cost and coverage do not vary from state to state. Bills associated with Medicare coverage are paid partly using trust funds held by the U.S. Treasury. These trust funds come from sources including payroll taxes and funding from Congress. People with Medicare coverage pay for their portion of any costs through monthly premiums, deductibles, and coinsurance.

    Medicaid is a joint federal and state insurance program that provides coverage for the medical costs of people with limited income and resources. Medicaid is made up of many different programs. Since it is a joint program, the federal government has guidelines that all states must follow, but eligibility requirements and benefits provided vary between states. Medicaid application and eligibility rules are strict, but Medicaid also allows for benefits that Medicare doesn’t cover. Additionally, people with Medicaid don’t usually pay for qualifying medical care outside of a copay for some services.

    What Is Medicaid Planning?

    In general terms, Medicaid planning is any assistance that potential Medicaid applicants seek out before or during the Medicaid application process. It can encompass anything from seeking assistance with completing and filing documentation to completely restructuring assets.

    People engage in Medicaid planning so that they have the better chance of qualifying for Medicaid. Every applicant has different reasons for wanting Medicaid. For example:

  • Long-term care is expensive, and Medicaid would allow an individual to receive care they couldn’t afford otherwise.
  • if one spouse is able to live at home longer than the other, Medicaid planning ensures that they have to financial resources to do so.
  • It is best to start the Medicaid planning process early, even if you do not anticipate needing long-term care or other Medicaid benefits in the near future. Advance preparation ensures that you do not have to pay out of pocket with your existing assets for costs associated with aging or disability.

    One part of the Medicaid planning process could be the restructuring of your assets to ensure qualification for Medicaid, or so that your assets aren’t used to pay for the high costs of long-term or specialty care as you age. For example, one aspect of the Medicaid qualification process is meeting an income eligibility threshold. In most cases, in order for one to qualify for a Medicaid waiver to receive supportive care services, their income cannot exceed $2,382 per month ($28,584 per year). If your income exceeds this amount, an elder law attorney can help divert your “excess income” into a trust or convert other countable assets into exempt assets, so that you remain eligible for Medicaid.

    An elder law attorney can also assist with the complicated Medicaid application and review process. Since any clerical or other errors in the application process can lead to denial of benefits, seeking counsel makes acceptance into the program much more likely.

    Is An Attorney Needed To Apply For Medicaid?

    Consulting with an attorney is not required in order to apply for Medicaid, but it is strongly encouraged. Seeking counsel to aid in the Medicaid planning and application process greatly increases one’s probability of acceptance, and can also greatly reduce the application’s processing time. Eligibility regulations and documentation requirements for Medicaid application and acceptance are complex, and even simple errors can result in denial of benefits. Elder law attorneys are well-versed in aspects of Medicaid such as gifting, eligibility periods, and exceptions. They work with you to safeguard your legal rights and future financial stability.

    Planning For Long-Term Care

    Many people eventually need long-term care, whether it be due to aging, illness, or disability. The high costs associated with this type of care can lead to rapid depletion of assets to cover out of pocket costs if one doesn’t have proper insurance coverage.

    Fortunately, it is possible (and encouraged!) to plan in advance for the eventuality of long-term care, even if you don’t yet know what type of care you may need.

    Planning for long-term care can take many forms. It often begins with talking to an elder law attorney about how much you can feasibly spend on the costs of care, and then developing a plan that outlines your wishes and how they are to be paid for. The process can also include drafting a will, naming powers of attorney, and establishing trusts and beneficiaries. Although long-term care planning can look different for everyone, starting the process early is key. Speaking to an attorney about your wishes for long-term care well in advance guarantees that you receive the kind of care you need, on your own terms.

    What Is Long-Term Care?

    Broadly, long-term care is any service or support provided to help someone who is aging, chronically ill, or disabled with activities of daily living. This can mean assistance with basic personal tasks like bathing, using the bathroom, or getting dressed, or more involved services such as meal delivery or adult day health care.

    Long-term care needs and the facilities that care is provided in can vary greatly between individuals. Extenuating circumstances notwithstanding, most people wish to remain in their homes for as long as possible. Home-based care services are most often provided by unpaid family members, partners, or friends. Care can be over short- or long-term time periods, and in one’s own home or the home of the caregiver. It encompasses personal care, medication administration, and supervision to ensure safety. At-home care can also be provided by a paid aide or nurse, who provides part-time medical services that have been ordered by a doctor. These people are hired through home health care agencies approved through Medicare. They provide recovery and therapy services over a specified time period or indefinitely, depending on care needs.

    Homemaker and Personal Care Services are also provided by home health care agencies, but can be sought out without an order from a doctor. Homemaker services providers assist clients with household chores and meal preparation, whereas personal care assistants help with bathing, using the bathroom, and getting dressed. Homemaker and Personal Care services agencies do not have to be approved by Medicare to provide services.

    Friendly Visitor and Senior Companion Services are typically short visits to someone who lives alone or is frail or in poor health. This type of care is often provided by one’s friends or family, but can also be purchased from a home health agency.

    Transportation Services are provided to the elderly or those with physical or intellectual disabilities, so that they may travel safely to and from medical appointments and other locations. Many times, senior living and adult day services facilities offer transportation services for their residents, and some public transportation divisions also have transportation options for elderly and disabled people.

    Adult Homes and Enriched Housing Facilities provide temporary or permanent living arrangements for people who cannot live independently, or whose care needs cannot be met in a home setting. These facilities are licensed and regulated by state and federal agencies to ensure that they provide safe and adequate care. They employ personnel who can assist with residents’ personal care and safety, and also provide meals and housekeeping services. Residents of Adult Homes live communally with others who have similar care needs, while those in Enriched Housing Facilities live in independent units.

    Assisted Living Facilities specialize in care for people who need help with personal care and medication management, and benefit from receiving this aid within a supervised setting. Facilities often offer housekeeping, prepared meals, and other services, while promoting community-based living to prevent residents from feeling alone. Assisted living facilities offer varying levels of care within the same facility depending on individual needs, and prioritize residents’ safety and comfort by providing on-site support that is available 24/7. Depending on the level of care required, assisted living facilities can be much more expensive than living independently. Because Medicare does not cover most of the costs associated with assisted living, people receiving these services usually pay for them privately or using long-term care insurance. Additionally, each facility offers different amenities and services which may or may not be billed as separate costs to the resident or their family. Wile assisted living can be beneficial for those that require additional support, it is important to verify the exact costs of care to be received before deciding on a facility.

    Nursing Homes provide medical and personal care services that go beyond what assisted living facilities can offer. Nursing homes usually give residents three meals a day, 24/7 supervision and nursing care, and hands-on assistance with activities of daily living. People who require nursing home care typically have complex medical diagnoses and/or chronic mental or physical health conditions. Nursing homes allow them to receive prescribed medical treatments around the clock, and employ skilled nursing staff for residents’ safety and quality of care.

    Covering The Costs Of Long-Term Care

    In Wisconsin, Medicaid provides coverage for certain long-term care for people ages 65 and older. Non-medical assistance is often included in this coverage, so that aging and disabled people can remain at home to receive care from family and friends for as long as possible. Medicaid also has provisions for assisted living and nursing home care. People with Medicaid typically qualify for one of three available long-term care coverage programs.

    Institutional/Nursing Home Medicaid: This is known as an entitlement program, meaning that anyone with Medicaid who qualifies for this type of care is covered. Institutional/Nursing Home Medicaid only provides for care and services received in nursing home facilities.

    Medicaid Waivers/Home and Community Based Services: These programs allow the insured to receive care at home, in adult day facilities, or in adult family or foster care homes rather than entering an assisted living facility or nursing home. Because Medicaid waivers and home and community based services coverage are not entitlement programs, the number of participants allowed at one time is limited, and there may be wait lists for these benefits.

    Medicaid for the Elderly, Blind, or Disabled: Also known simply as Original Medicaid, this is an entitlement program; anyone 65 years of age or older, and younger people who are blind or have certain disabilities are eligible for long-term care services under this program.

    It is important to note that all three of these Medicaid programs have distinct income and eligibility requirements for long-term care coverage. These criteria often vary annually and depend on marital status. Generally, to qualify for long-term care benefits under Medicaid, people over age 65 must prove that they have a medical need for care, and that they have limited income and assets. Consulting with an attorney prior to applying for Medicaid long-term care coverage greatly increases the likelihood of acceptance. Elder law attorneys are skilled in using trusts and other tools to ensure that applicants meet eligibility and income criteria, and that the non-applicant spouse is financially provided for and can remain at home as long as possible.

    On the contrary, Medicare and most other baseline health insurance plans do not provide coverage for long-term care unless the care to be received is deemed medically necessary. Since most long-term care aims to provide assistance with activities of daily living rather than with medical treatments and support, people seeking long-term care usually pay for it privately. Thus, even if you do not anticipate needing long-term care in the near future, it is important to create a plan to pay for it. Often, the best way to do this is to purchase separate long-term care insurance. These policies provide financial assistance for a variety of skilled and non-skilled long-term care. What services and facilities are covered can vary between different insurance plans, so it is important to consider what kind of care you may need when looking for coverage. The cost of long-term care insurance does fluctuate depending on your location and coverage needs, but current or retired federal employees and military personnel, their spouses, and certain other relatives may be eligible for discounted group rates on certain plans.

    Strategies For Protecting Income And Assets

    The biggest hurdle in qualifying for long-term care and other benefits under Medicaid is often meeting the financial eligibility criteria. In Wisconsin, a single person must have income of less than $2,742 per month, and total assets of under $2,000 to qualify for long-term care Medicaid To qualify for regular Medicaid for the elderly, blind, and disabled, a person’s income must not exceed $997.98 per month, and their assets must be under $2,000. Income from almost any source is counted towards this limit, including employment wages, alimony or pension, payments, Social Security Income, Social Security Disability Income, stock dividends, and Veterans benefits. Wisconsin also has a 5-year Look-Back Period that applies to applications for long-term care benefits. In short, this means that Medicaid verifies that no assets were gifted or sold under market value the the 5 years immediately predating an application for a waiver or nursing home benefits. If an applicant or their spouse has gifted or sold any assets under market value, Medicaid’s governing agency assumes that this was done in order to meet Medicaid’s asset limit guidelines. This results in a Divestment Penalty Period, whereby someone who would otherwise be eligible for Medicaid is declared ineligible for a period of time because of the Look-Back Period violation.

    Although Medicaid’s financial eligibility regulations are strict, elder law attorneys are skilled in restructuring or diverting assets and income to satisfy requirements. This can be done in a variety of ways, depending on an individual’s unique situation. The following methods are not exhaustive; speaking to a Medicaid planning professional is the best way to determine the right course of action.

    Medicaid Asset Protection Trust

    Medicaid Asset Protection Trusts (MAPTs) are a way to prevent countable assets from being counted when determining Medicaid eligibility. This strategy involves creating a trust to place ‘excess’ assets in, so that they are not considered to be owned by the person who is applying for Medicaid coverage. When the applicant creates the trust, they also appoint a trustee, who manages and controls the trust, and a beneficiary, who will come to own the assets in the trust when the trustmaker passes away. In order for the trust to be non-countable, the beneficiary and the trustmaker cannot be the same individual. There are also a number of other guidelines that the trust must adhere to. It must be irrevocable, meaning that it cannot be cancelled or changed once it is created. In order for the assets in the trust to be exempt for Medicaid eligibility purposes, the trustmaker must not own or be able to regain ownership of the trust.

    Medicaid Asset Protection Trusts are viable options for people who do not foresee needing Medicaid benefits in the next 5 years. They are included in Medicaid’s Look-Back Period, and could thus lead to Medicaid ineligibility if created in the 5 years proceeding the application. Also, because they typically cost between $2,000 and $12,000 to create, they are not usually used when a person has less than $100,000 in assets.

    Modern Half A Loaf

    Modern Half A Loaf is a Medicaid transfer strategy used to reduce countable assets, making it more likely that a Medicaid applicant would qualify for coverage. Under this method, the applicant gifts around 50% of their countable assets to the person or people of their choosing, and then buys a short-term annuity with the assets they have left. The annuity converts the remaining countable assets into income, so that they no longer count towards Medicaid’s asset limit.

    As long as the annuity is Medicaid-compliant, it is not subject to Medicaid’s Look-Back Period. However, the gifting of countable assets is in violation of the Look-Back Period, so the person seeking Medicaid coverage will be ineligible for a of time. If the Modern Half A Loaf strategy is used within 5 years before application for Medicaid, the income stream from the annuity combined with any additional income, can be used to cover the cost of long-term care during the ineligibility period brought on by the Look-Back Period violation.

    Irrevocable Funeral Trust

    Irrevocable Funeral Trusts allow people to spend-down the assets in excess of $2,000 that make them eligible for Medicaid by paying for their funeral and burial costs before their death. With this strategy, potential applicants create an irrevocable trust and place funds into it that they intend to be used for their final expenses. Upon the trustmaker’s death, the funds in the trust are used to cover funeral, burial, and other after-death expenses. Because the trust is irrevocable, the assets contained therein no longer belong to the person who seeks Medicaid coverage, therefore allowing them to meet the asset requirement.

    Certain states, including Wisconsin, require a Goods and Services Statement for the trust to be Medicaid compliant. This is an itemized list of the goods and services that are intended to be purchased by Irrevocable Funeral Trust funds. The sum of items on the Goods and Services statement must match the amount of money in the trust. This is to prevent violation of the Look-Back Period caused by improper transfer of assets.

    It is also important to note that almost all states, including Wisconsin, mandate that the state is named residual beneficiary of all Irrevocable Funeral Trusts. This means that any assets remaining in the trust after the trustmaker’s final expenses have been paid are transferred to the state to offset the costs of care paid by Medicaid during the person’s life.

    Qualified Income Trust

    Also known as Miller Trusts, Qualified Income Trusts act as flow-through accounts for ‘excess’ income that makes a person ineligible for Medicaid. Qualified Income Trusts are irrevocable, meaning that they can’t be modified or cancelled after they are created, and no longer technically belong to the person who established the trust. When the Qualified Income Trust is created, the trustmaker designates a settlor/grantor, trustee, lifetime beneficiary, primary beneficiary, and secondary beneficiary. Then, they establish a separate checking account at the bank of their choosing to hold funds designated for the trust. Each month, the income from this checking account is deposited into the Qualified Income Trust and used for medical expenses allowed under Medicaid that are provided by a state-licensed or otherwise qualified practitioner.

    For Qualified Income Trusts to be exempt from counting, the trustmaker has to provide documentation to the Medicaid agency proving the existence of the trust and a related checking account, as well as proof that income will be deposited into the trust on a monthly basis. An elder law attorney can assist in establishing a Qualified Income Trust, as well as providing sufficient evidence to Medicaid to avoid harnessing a potential applicant with a period of Medicaid ineligibility brought on by a violation of the Look-Back Period.

    Lady Bird Deed

    Lady Bird Deeds are also known as Enhanced Life Estate Deeds, Lady Bird Trusts, or Transfer On Death Deeds. Like other types of Life Estate Deeds, they allow the owner of the property, called the grantor or life tenant to maintain possession of their primary residence for the duration of their life. After the grantor dies, the property is automatically transferred to the named beneficiary, who is also called a grantee, remainderman, or remainder beneficiary.

    Unlike Traditional Life Estate Deeds, named beneficiaries have no rights to the property during the grantor’s life. This means that the life tenant can mortgage or sell the home without approval from the beneficiary, and can also name new beneficiaries if they so choose. Lady Bird Deeds are nontransferable between properties, meaning that a new Lady Bird Deed would be required if the life tenant sold one property and bought another.

    Lady Bird Deeds are used for estate planning, not to make a potential applicant eligible under Medicaid’s financial criteria. Applicants’ primary residences are exempt from being counted as assets by Medicaid, provided that home equity interest is below a certain amount ($750,000 in Wisconsin as of 2023). Because the Medicaid applicant is allowed to stay in the property for the rest of their life under a Lady Bird Deed, and because the beneficiary of the deed does not have any ownership stake in the property until the grantor’s death, Lady Bird Deeds are not included in Medicaid’s Look-Back Period.

    Lady Bird Deeds also serve to protect one’s estate from the Medicaid Estate Recovery Program, whereby the state tries to collect on the costs of care covered by Medicaid during a person’s life, and may do so by putting a claim against the person’s property. Because the property would transfer directly to the beneficiary upon the life tenant’s death, they are not subject to the probate process.

    Medicaid Divorce

    Medicaid Divorce entails the dissolution of a marriage to protect the assets of one spouse, who is sometimes called the healthy spouse or community spouse, when the other spouse requires long-term care benefits under Medicaid. Because all of a married couple’s assets are considered jointly-owned, the non-applicant spouse risks becoming impoverished if the couple has to spend-down their assets for Medicaid eligibility purposes. However, if the couple gets divorced, the non-applicant spouse often qualifies for a larger share of the couple’s joint assets. This allows the healthy spouse the financial stability to continue to live independently. It also protects more of the couple’s estate from being spent-down, and lowers what the applicant spouse holds as countable assets, so they become eligible to qualify for long-term care Medicaid.

    Because of Spousal Impoverishment Provisions, which enable the healthy spouse to keep a larger portion of the couple’s assets when the other spouse needs long-term care, Medicaid Divorce is now uncommon. Briefly, Medicaid’s Spousal Impoverishment Provisions are comprised of an income allowance and a resource allowance. The income allowance portion of the provision excludes the non-applicant spouse’s income from being counted towards Medicaid’s $2,000 asset cap, while resource allowance portion safeguards a larger portion of the couple’s assets for the support of the healthy spouse.

    in states where Medicaid Divorce is feasible, it does not apply to Original Medicaid for the Elderly, Blind, and Disabled. This is because Original Medicaid does not cover long-term care. However, as previously mentioned, Medicaid Divorces are becoming obsolete. In community property states like Wisconsin, where a couple’s assets must be split 50/50 upon divorce, Medicaid Divorces are completely irrelevant.