Veterans Benefits, Michigan Medicaid and Long-term Care

July 31, 2011

Filed under: Elder Law,Long Term Care,Medicaid Planning,Michigan Veterans Benefits,Veterans Benefits — Christopher J. Berry @ 11:14 pm

Our Bloomfield Hills Elder Law attorney office often gets contact by individuals looking for assistance with their Veterans Benefits questions.  Often we’ll get calls asking whether “my father qualifies for the aid & attendance benefit?” and what we can do to help.  What many people are missing is that there is a whole continuum of care with aging.

The VA benefit is a great benefit when the veteran is needing home care or assisted living, but once a veteran is in need of skilled nursing care, quite often we are looking at another governmental program to help defray the devastating costs of long-term care.  That benefit is the Michigan Medicaid program.

Now the thing to keep in mind about the VA benefit and the Michigan Medicaid program is that the two programs have different rules for qualification.  For example, the Michigan Medicaid program has a 60 month look back period.  The differences in the two programs is why when individuals focus entirely on the VA benefit program and ignore the Medicaid program, as elder law attorneys serving Oakland County, Michigan, we educate our clients on both programs and how they work together.

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Bad Medicaid Planning Information On the Internet

June 22, 2011

Filed under: Do It Yourself Estate Planning Gone Wrong,Medicaid Planning — Christopher J. Berry @ 12:56 am

It’s amazing how much bad information I see out there as a Michigan Medicaid planning attorney.  For example, I was sitting at a meeting today and started talking with an indiviual who said he used to work for a certain “estate planning” firm in the Metro-Detroit area.  Well, when I had a chance I decided to pop over to their website to see what was going on with their firm, and after jumping through all the flash animation I finally got to the content.

They pride themselves and their seminars on being “estate planning” experts, so I was intrigued when I saw that they listed “medicaid planning” on their website as a speciality.  As an attorney that focuses entirely on estate planning and Michigan medicaid planning I was curious to see what informaiton they provided.

Well, according to them, there is a 36 month look back period on any divestments.  Well, this information is blatantly wrong and does a disservice to people searching for Michigan medicaid planning information in Michigan on the internet.  Obviously, with the implementation of the DRA back in 2007 (yes, the information they have is 4 years out of date), the new divestment penalty period is 60 months.

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Michigan Medicaid Estate Recovery Update, May 4th, 2011

May 4, 2011

Filed under: Asset Protection,Elder Law,Long Term Care,Medicaid Planning,Michigan Veterans Benefits,Veterans Benefits — Christopher J. Berry @ 5:49 pm

Well, it looks like that estate recovery in Michigan will be coming down the pike.  As Michigan elder law lawyers, we new that the time was coming when we’d implement the estate recovery law that is already on the books.  Well that day may be coming in July, as the proposed policy changes were just released and I am reviewing the changes now.  The biggie is that there is a section in the policy manuel that addresses estate recovery.  There aren’t too many surprises in how it will be implemented, but it’s important to note that without proper planning a Michigan Medicaid applicant could lose their house, car, bank account, and insurance to the state of Michigan with the new proposed estate recovery policy.

It’s more important now, that if a loved one is going into a nursing home, that they effectively plan for Medicaid with the assistance of a Michigan medicaid planning attorney.  For more information on medicaid planning, elder law, and veterans benefits, visit the Michigan Elder Law Center.

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Michigan Medicare and Michigan Medicaid receive $1 million contract to develop dual-eligble program

April 20, 2011

Filed under: Elder Law,Holistic Estate Planning,Medicaid Planning,Michigan Veterans Benefits — Christopher J. Berry @ 11:50 pm

The US Centers for Medicare and Medicaid (CMS) have awarded Michigan a $1 million innovation contract to improve care and services for individuals dually eligible for Medicare and Medicaid according to a recent article in Crain’s.

According to the article, Michigan had applied for the contract to cut Medicaid costs, eliminate duplication of services, expand access to needed care and to improve the quality of care for people enrolled in both programs.  Michigan is one of 15 states to receive the contract.

As a Michigan elder law and Medicaid planning attorney who volunteers with the Area Agency on Aging 1-B and the Michigan Medicare and Medicaid Assistance Program (MMAP), this is great news.  For more information on Michigan elder law issues, visit the Michigan Elder Law Center which regularly has news on issues effecting Michigan seniors.

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Does Michigan have Estate Recovery in 2011?

April 5, 2011

Filed under: Asset Protection,Elder Law,Holistic Estate Planning,Long Term Care,Medicaid Planning — Christopher J. Berry @ 12:43 pm

As a Michigan Medicaid planning lawyer, a question I’m often asked, even by other attorneys is “does Michigan have estate recovery?”

Estate recovery is the process in which the state of Michigan is able to place liens and get reimbursed for any costs they cover for people receiving Medicaid.  Estate recovery and Medicaid are complicated programs because they are administered jointly with the State of Michigan and the Federal Government through CMS.

The answer is yes.  Yes, Michigan passed an estate recovery law a few years ago.    However, the Bush administration rejected the Michigan plan as not being draconian enough.  Since then it has been tweaked and resubmitted, but still has not been approved.

A catch with the program is that it will affect anyone who entered the Michigan nursing home after the law passed, not just those who entered the nursing home after Federal approval.

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2010 Tax Code Changes and The Effect on Medicaid Planning

March 13, 2010

Filed under: Elder Law,Long Term Care,Medicaid Planning — Christopher J. Berry @ 10:07 pm

The New Law. There is currently no federal estate tax or generation-skipping tax for decedents dying in 2010 unless Congress passes new estate tax legislation this year. The federal estate tax will return in 2011 with a $1 million exemption ($2 million for married couples with basic planning) and the generation-skipping tax exemption will return at $1 million, indexed for inflation. This means that a person with assets of $10 million, $20 million or even $100 million who dies in 2010 will not pay a dime of estate tax. However, assets a decedent owns and passes on to a beneficiary at death will receive little, if any, step-up in basis, thus creating a large capital gains tax problem for the beneficiary who acquires the property.

As of January 1, 2010, IRC Section 1022 became effective and substantially changed the rules for obtaining a step-up in basis for real property or appreciated assets passed to a beneficiary at the death of the property owner. Section 1022 replaced the prior rule, IRC Section 1014, which expired on December 31, 2009, along with the estate tax.

What does it mean? Section 1022(d)(1)(A) allows a step-up in basis up to $1.3 million for an individual and $3 million for a surviving spouse (as long as it is received outright or as qualified terminal interest property) in property owned by, and transferred from, the decedent at the time of the decedent’s death.

An illustration: Harry, a single person, owns a home worth $2 million at his death. He bought his home 20 years ago for $200,000. Harry’s Will leaves everything outright to his daughter, Kathy, at his death. If Harry dies in 2010 while Section 1022 is in effect, Kathy will receive Harry’s property with a basis of $1.5 million, not $2 million. Once Kathy sells the property, she will pay capital gains on the difference between the selling price and $1.5 million.

Planning Note: In 2010, property passing at death may receive little or no step-up in basis at death, resulting in larger capital gains when the property is sold.

The Effect on Irrevocable Trust Property – Muddy Waters.
There is no clear answer as to the effect of Section 1022 on property held in an irrevocable grantor trust (often referred to as a Medicaid Asset Protection Trust), which is commonly used as an asset protection tool in Medicaid planning. Some experts believe that property held in an irrevocable grantor trust will not get any step-up in basis at the grantor’s death, and others believe the opposite. What is clear is that the lack of step-up for property held in an irrevocable trust is only applicable to property transferred by grantors who die in 2010 or while Section 1022 is in effect. The value of irrevocable grantor trusts in Medicaid planning has not changed – these trusts are still a valuable tool for asset protection.

Planning Note: The usefulness of irrevocable trusts in Medicaid planning has not changed even though property held in an irrevocable trust may not receive a step-up in basis if the grantor dies this year.

The Effect on Life Estate Property – no step-up in basis. There is no support in Section 1022 for a life estate holder to be considered an owner for purposes of a step-up in basis. Therefore, it appears that property held subject to a life estate interest will not receive a step-up in basis at the death of the life estate holder during 2010 or while Section 1022 is in effect.

The Effect on the 121 Exemption – remains intact. IRC Section 121 provides for a $250,000 exemption from capital gains for a single person who sells his/her home, and a $500,000 exemption for a married couple who sell their home. It appears that the Section 121 exemption will still be available for assets held individually, or in an irrevocable Medicaid Asset Protection Trust, assuming the appropriate rights to the home were retained in the trust. There were no changes to the grantor trust rules that would prevent the Section 121 exemption from applying to property held in a Medicaid Asset Protection Trust.

Planning Note: Life estate property will not get a step-up in basis in 2010, but the 121 exemption on homestead property remains.

What Happens Next? Congress could enact federal estate tax legislation this year –retroactive to January 1, 2010, or effective on some later date – and Section 1022 would then likely be repealed. Whether the new legislation would be retroactive is unknown. It is also possible that Section 1022 could be repealed even if new estate tax legislation is not passed this year. Absent further action from Congress Section 1022 will expire on December 31, 2010. Remember — these rules are only applicable to those persons who die while these provisions are in effect, not to trusts or life estate deeds that are drafted while these laws are in effect.

Staying the Course. Although Section 1022 makes it difficult to obtain a step-up in basis for death occurring in 2010, this provision will not be around past 2010. Absent further changes in the law, the latest date that the step-up in basis provisions will return is January 1, 2011, when the estate tax is reinstated. And, these provisions only affect property with a low cost basis. Cash assets like checking accounts, CDs and savings accounts are unaffected by this legislation.

Planning Note: The 2010 legislation only affects property with low cost basis, not cash assets like CDs, checking accounts and savings accounts.

Conclusion. The changes to the tax code can seem very confusing. Luckily, these changes are only in effect for a short time (up to a year maximum) and only affect those persons who die this year or while these provisions are in effect. And while it is necessary to stay abreast of these new rules, it is also important to remind seniors and their loved ones of the importance of planning early to protect assets from the rising costs of long-term care.

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Michigan Elder Law Lawyers Specialize in Helping the Elderly

January 12, 2010

Filed under: Elder Law,Long Term Care,Medicaid Planning,Michigan Veterans Benefits — Christopher J. Berry @ 4:06 pm

Many elderly persons rely entirely on their children, family members or other trusted individuals to help them. This dependence upon caregivers or family members makes an older person more vulnerable to abuse and financial exploitation. Legal arrangements and protective actions by family may be necessary to shield loved ones from making bad decisions or from being taken advantage of.

Though you wouldn’t think a child could take advantage of his or her mother or father, there is no way to know what someone will do who is desperate for money or who feels entitled to an inheritance. For example:

David’s parents’ health was failing and living alone in their home was becoming a concern. His sister Jill wanted to look into assisted living for them. David immediately became upset at Jill for wanting to spend their money. He packed up his parents and brought them to his home. Being single and working, he was not available to them during the day, but left food and water on the table to sustain them until he returned home in the evening. Jill lived over 300 miles from David and when she could get to his house to visit; she found her parents’ care was not acceptable. They could not remember if they took their medications or if they had even eaten a meal that day. David was also draining their savings account and when confronted about it, became angry and complained that he needed their money to pay expenses for their care. Clearly Jill felt her brother’s care of their parents was abusive, but David’s defense was he provided a home for his parents in which he could care for them. This family needs a professional advisor to help them understand and clarify the issues concerning their parents’ care.

Making legal decisions about property, finances, power of attorney, and final wishes are important tasks to complete for the final years of life. Having legal documentation for a will, for medical treatment and for the person designated to be responsible for parents’ welfare can avoid family disputes and financial abuse, and help to conserve assets that are needed for care.

Michigan Elder law attorneys specialize in legal issues affecting the elderly. They are knowledgeable about Medicare and Medicaid programs. They work with the elderly in assisting them and their families with all aspects of estate planning and implementing necessary legal documents for the final years of life. In addition, they help individuals to apply for and possibly accelerate coverage from Medicaid. An elder law attorney can also help with disputes with Medicaid. Below is a partial list of what an elder law attorney might do:

* Preservation or transfer of assets seeking to avoid spousal impoverishment when a spouse enters a nursing home
* Medicaid qualification and application and Medicaid planning strategies
* Medicare claims and appeals
* Veterans Benefits claims
* Social security and disability claims and appeals
* Disability planning, including use of durable powers of attorney, living trusts and living wills
* Help with financial management and health care decisions; and other means of delegating management and decision-making to another in case of incompetence or incapacity
* Administration and management of trusts and estates
* Long term care placements in nursing homes and assisted living
* Nursing home issues with patients’ rights and nursing home quality
* Elder abuse and fraud recovery cases

A Certified Elder Law Attorney (CELA) is an elder law attorney who is highly proficient in meeting the legal needs of elders and in understanding and applying the rules of Medicaid. A CELA has successfully handled a requisite number of pertinent cases in order to receive that designation. This experience will make an attorney with this designation more competent with elder planning issues than other attorneys lacking this designation.

Most elder law attorneys do not specialize in all of the areas iterated above. When considering an attorney you will want to find one who has experience in the area you need help.

According to The National Academy of Elder Law Attorneys —

“Ask lots of questions before selecting an elder law attorney. You don’t want to end up in the office of an attorney who can’t help you. Start with the initial phone call. It is not unusual to speak only to a secretary, receptionist or office manager during an initial call or before actually meeting with the attorney. If so, ask this person your questions.

* How long has the attorney been in practice?
* Does his/her practice emphasize a particular area of law?
* How long has he/she been in this field?
* What percentage of his/her practice is devoted to elder law?
* Is there a fee for the first consultation and if so, how much is it?
* Given the nature of your problem, what information should you bring with you to the initial consultation?”

A good way to choose an attorney is by referral from friends, family, clergy or other associations. Before you meet for your initial consultation, prepare the items you want discussed and taken care of. Bring pertinent documents and questions. Be sure you get clear answers and that you understand what your attorney is proposing.

Two-way communication is the best way your attorney can understand your needs and concerns. Does the attorney listen to what you say, appear to really care about your concerns or return your phone calls? If not find another attorney. Most Elder law Attorneys sincerely want to help make you or your parent’s elder years a well planned for, peaceful experience for all involved.

There are a number of ways attorneys charge for their services. They may charge a flat hourly rate. Or they may charge hourly for some services and add on additional expense for out-of-pocket costs such as paperwork, stamps, phone calls, etc. Or they may charge a single fee for a mutually agreed-upon course of action or plan. Some attorneys who specialize in appeals for veterans benefits or Social Security may work on a contingency basis. It is important to understand how you will be billed so there will be no surprises in the end.

The National Care Planning Council lists elder law attorneys throughout the United States.
To find someone in your area go to

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Michigan Elder Law Planning for Long-term Care Costs

December 2, 2011

Filed under: Elder Law,Medicaid Planning,Michigan Veterans Benefits — Christopher J. Berry @ 1:29 am

As a Michigan elder law attorney, I am often asked by financial planners how we can help their client insulate and protect their client resources from the devastating effects of long-term care costs.  Check out the Michigan Elder Law Attorney Website for more information.

Typically there are two situations where we help families, planning cases and crisis cases.  In our office a planning case is a situation where a family has some time before they need skilled nursing care.  The family may have a diagnoses of Alzheimer’s or Parkinson’s disease or maybe dementia, but the senior is still able to live at home, maybe with assistance or in an assisted living facility.  The senior doesn’t need skilled nursing care, yet.

If this is the case, we can use Asset Preservation Trust’s to try to shield the seniors assets so that they can insulate themselves from the devastating costs of long-term care.  Asset preservation trusts can be used in conjunction with long-term care planning.

Also, it’s very important that we update the financial powers of attorney so that they allow enough flexibility to, when the crisis comes, take the necessary actions to protect your loved one’s resources.  If the senior or loved one is a veteran, we have even more options with the Aid & Attendance VA benefit that is available.  This type of planning is all about improving your loved one’s quality of life.

The second type of planning is crisis planning.  In this situation your loved one is either in a nursing home and coming off of Medicare, is about to go into a skilled nursing care facility, or is already private paying for skilled nursing care.  In this situation our Michigan elder law firm can put strategies in place to generally protect fifty to one hundred percent of your loved one’s assets from long-term  care costs.

Michigan Nursing Home Medicaid Planning Free Report

September 26, 2011

Filed under: Medicaid Planning — Christopher J. Berry @ 2:04 am

Our Michigan Nursing Home Medicaid planning lawyers have put together a new free report that is a great resource for families facing having a loved one entering a nursing home.  This free Medicaid Planning resource will help families who are placing a loved one in the nursing home or face the diagnosis of one of the many debilitating diseases such as Alzheimer’s or Parkinson’s disease, navigate the long-term care legal maze.

Download your Michigan Medicaid Planning Free Report now!

Helping Your Clients Protect Their Family Fortunes… Michigan?

August 9, 2011

Filed under: Asset Protection,Elder Law,Medicaid Planning,Will — Christopher J. Berry @ 11:25 pm

I just saw a blog post entitled “Helping Your Clients Protect Their Family Fortunes,” which I thought was a bit odd and out of place.  Especially on days like this when the stock market and people’s retirement assets are tanking.  Our firm heritage is that we started out as an estate planning firm in Michigan, and we still are.  However, more and more, every day, I consider my practice, at least, more geared towards every day Michiganders, who don’t have a “family fortune,” but instead worked hard and saved a nest egg that has taken a hit with the plummeting economy.

I spend my day as a Michigan elder law attorney, helping clients with modest assets save as much as they can from taxes, probate, and long-term care costs.  Sure, we have the skill set to plan around the Federal Estate Taxes ($5million dollar exemption this year and with portability $10 million, do you have that much?) and do complicated, high end estate planning utilizing GRITs, GRATs, ILITS, IDGT’s, and the rest of the alphabet soup.  But, I find that my day is spent helping working class Michigan families with questions such as “how do we pay for assisted living for mom?” or “dad’s going into the nursing home, how to we make sure that mom can continue to pay the bills?”

Very different than “Helping Your Clients Protect Their Family Fortunes.”  I’d say a good tag line for much of the work I am helping Michigan families with is “Helping Your Clients Save Their House and Savings.”


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