The majority of the time seniors will either use long-term care insurance to pay the cost of nursing home care, or they will try and qualify for Medicaid to help them cover these costs. In some situations it may be a good idea to use long term care insurance in order to help you qualify for Medicaid later.

One reason why someone might want to combine long term care insurance with Medicaid planning is if they can afford coverage for a certain amount of time, but may not be able to pay the premiums over the long term.

In this situation you can purchase insurance for a specific amount of time, probably about 5 years and then transfer assets during this time, either to family or through a trust created to hold these funds for family members. This will ensure that you will qualify for Medicaid when you can no longer afford your insurance premiums. With this tactic you will want to ensure that you keep enough of your assets to cover your premiums for at least five years, as well as any other expenses that you might have.

Another situation where you might considering combining Medicaid planning with long term insurance would be if you want to transfer assets from your name, but if something were happen would be unable to pay for the five year look back period that Medicaid requires. If you have long term care insurance, you will be covered until the penalty period is over and you would qualify for Medicaid.

Using a strategy of combining Medicaid planning with long term care insurance is a good solution if you have assets that you would like to protect if you should need Medicaid in the future. If you would like to using long term care insurance to supplement the five year look back period required by Medicaid, it is a good idea to talk with an attorney experienced in Elder Law and Estate Planning. An attorney can help you with your plan to ensure that it does what you intend to it do.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

With the many changes in Medicaid eligibility requirements, it is not uncommon for people to make mistakes when it comes to estate planning to avoid probate. Often the techniques that people use to keep an estate out of probate, may cause some significant problems with Medicaid eligibility.

Here are a few estate planning mistakes to avoid:

A life deed on a property will allow the owner to stay in the home during their lifetime, but it transfers the property to someone else after that person’s death. Though this will help to keep the property out of probate, it may also create other problems. One of the problems is that this may be counted as a gift for federal income tax, and if it isn’t reported, it may result in penalties and interest. This will also make it impossible to sell or refinance the property without the consent of the other owner, plus the original owner may be unable to qualify for Medicaid if it is needed. It is possible to avoid these problems and get the same benefits, but the property deed must be titled differently so it is best to get the advice of an experienced attorney before deciding to take any steps with your property to avoid probate.

Creating a joint account is also another mistake. When it comes to qualifying for Medicaid, if your name is on any account, regardless of if it is a joint account, the money is still considered to be part of your assets. If the joint owner uses any funds out of the account for personal reasons, the person applying for Medicaid may be disqualified, as the money will be considered a gift to the other person on the account.

Donations to charities may also create a problem with qualifying for Medicaid. If such donations do cause someone to be ineligible for Medicaid, the only way around it is if the person can repay the money themselves, which may not be possible. It is also important to pay attention to how much you spend on gifts for family members, as this may also count against you as far as Medicaid eligibility, even if these are birthday or Christmas gifts.

You also cannot sell assets to friends and family for less than the fair market value. The difference between the sell price and the fair market value amount will be considered a gift, and will disqualify someone from Medicaid for a period of time.

Putting assets in a Revocable Living Trust will also cause problems with Medicaid eligibility. Luckily these problems can be easily remedied be revoking the trust prior to applying for benefits.

There are many rules when it comes to qualifying for Medicaid, which is why it is so important to have the help of an experienced attorney when it comes to estate planning, and the possibility of needing long-term care in the future.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

You’ve begun to think about your retirement and your estate planning options.

But as you gather information, open accounts and sign documents you get a nagging feeling. Have your parents done the same? Did they start saving for retirement when they were younger or are you going to have to allow them to move in with you and your family? Who is supposed to care for them when they can’t drive any longer or need help to pay their bills on time?

Although you don’t want to pry and snoop around in their business, as their child, the financial decisions they may or may not have made could impact your own financial health. An AARP survey found that family caregivers who are also working other jobs, provided a few thousand dollars a year in expense coverage for their parents.

Creating a late-life plan with your parents can save you thousands of dollars and hours of stress and aggravation as your parents age. Ask your parents what plans and documents they have in place so far. They’ll need a Healthcare Power of Attorney, a regular Power of Attorney, a Living Will and a standard Will, at the very least. Talk to your parents about where they want to live out their days; their home (in which a caregiver must assist them) or in an independent, assisted living or nursing care facility?

If you feel uncomfortable openly discussing these issues with your parents, try a discussion fantasizing about how you want your old age to look and work into the conversation the questions about what they would want. Make sure you cover the location and people with whom you want to live; the types activities you’d want to have available to you, any travel plans, how you plan to pay for everything, where you would keep your legal documents, who would be responsible for your finances and housing costs or medical care.

If you sense hesitancy or understand that your parents haven’t made these decisions, you may want to urge them to seek estate planning advice. Perhaps they do not understand how much money they currently make could be spared from estate taxes and the burden they are likely to place on their children, if they do not plan ahead.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

You may not realize it, but the new Health Care Reform law contains some long-needed changes to how seniors will can pay for long-term care.

The new law includes a comprehensive savings program that will allow participants to start saving for long-term care facilities now. The Community Living Assistance Services and Support Act (CLASS) will work much like Social Security in that you’ll be able to instruct your employer to make regular payments to a savings program. After five years of contributing, you’ll then become eligible for financial assistance to help cover the costs of long-term care.

The program is completely optional and has already been passed as part of the Health Care Reform bill. All that’s needed now is for the Department of Health and Human Services to decide on premiums and benefits. The program is scheduled to launch in 2011.

What if you’re already in need of financial assistance for long-term care?

In addition to the CLASS Act, the new Health Care Reform law also includes an expanded Medicaid coverage so that many seniors not currently eligible for the program will be able to qualify. And because Medicaid pays many long-term care expenses, this should help ease the financial burden so many seniors are now facing.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.