ELDERLAW SEMINAR OUTLINE I. INTRODUCTION My name is Tim Brouillette, I am an Attorney Practicing Law in NP. I have been a practicing attorney for 21 years. I am here to speak on elder law issues, more specifically medicaid and Nursing Home Care and if we have time, planning to avoid Estate Taxes. I have been practicing Estate Planning and Elder Law for over 21 years now. Elder Law Experience: 1992 through present, helped to start and train guardians & conservators under State Court Administrator approved Guardian and Conservators Program 1992-1997 Faculty - Mid-Plains Community College Former board member & Vice Chairman Great Plains Regional Medical Center Hospital Ethics Committee Board member First National Bank of North Platte Board member and President, Nebraskaland Days 1994 through present-Various presentations to civic & legal organizations on elder law issues including Author, “Guarding against Guardianship and Conservatorship” Nebraska Lawyer, May, 1998 “Adavanced Directives, the legacy of Karen Ann Quinlin” Nebraska Traveler magazine APPEALS ON ELDER LAW ISSUES WITH THE DEPT OF HEALTH & HUMAN *+INTERRUPT TO ASK QUESTIONS AT ANY TIME-FREE LEGAL ADVICE II. GENERAL DEFINITIONS OF LEGAL TERMS USED IN ELDER LAW 1. WILL- What happens if we don’t have a will? (Does not go to State) 2. TRUST -basically 2 types A. Intervivos or Living Trust -revokable -irrevokable B. Testamentary Trust 3. POWER OF ATTORNEY-2 General Types A. Present Durable Power of Attorney B. Springing Durable Power of Attorney Power of Attorney for Health Care Power of Attorney for Financial 4. ADVANCED DIRECTIVES A. LIVING WILL-Statement-Karen Ann Quinlin B. POWER OF ATTORNEY FOR HEALTH CARE **WITHHOLDING OF NUTRITION & HYDRATION TUBES ON BOTH 5. PROTECTIVE PROCEEDINGS (COURT ACTION) A. GUARDIANSHIP-WARD MINOR OR ADULT B. CONSERVATORSHIP-PROTECTED PERSON MINOR OR ADULT III. MEDICAID-critical care nursing home costs 1. FEDERAL PROGRAM ADMINISTERED BY THE NEBRASKA DEPT OF HEALTH & H SER 2. GENERALLY AVAILABLE TO PAY LONG TERM NURSING HOME CARE FOR THOSE INDIVIDUALS WHO QUALIFY 3. SUPERVISED CARE NURSING HOME COSTS PER INDIVIDUAL RUNNING FROM $5,000.00 TO $7,000.00 PER MONTH INCLUDING MEDICATION. $60,000.00 TO $80,000.00 PER YEAR. CAN DRAIN AN ESTATE PRETTY FAST. -AVERAGE STAY FOR AN ALZHEIMER’S PATIENT IS 7 YEARS!!!!!, ($420K TO $560K THOUSAND DOLLARS) -AVERAGE STAY FOR NON-ALZHEIMER’S PATIENT ABOUT 3 YEARS ($180K to $240K) 4. LOOK BACK PERIOD (used to be none) 5 years 5. WHEN TO PLAN??? -WELL BEFORE A PERSON ENTERS A NURSING HOME (AT LEAST 5 YEARS) 6. HOW TO PLAN???-NURSING HOME PLANNING COMPLETELY DIFFERENT FROM ESTATE TAX PLANNING NOT GOOD ESTATE PLANNING TO AVOID TAXES -KENNEDY- KASSEBAUM BILL-EFFECTIVE JAN 1, 1997 A. NURSING HOME INSURANCE -EXPENSIVE - LIMITED ON COVERAGE ($80-$100 A DAY) -LIMITED ON DURATION (2YEARS MOST) B. GIVING PROPERTY AWAY DURING LIFETIME -$12,000.00 per year per person gift tax free C. PLACE PROPERTY IN TRUST -irrevokable trust- must be done 5 years before nursing home and may be challenged -living or revokable trust is subject to payment of nursing home care expenses -gifting to children who then start their own family trust If nursing home expenses needed within five years of children receiving gifts that they placed in trust, then they may withdraw funds to help If three years runs by and parents are not in nursing home, then medicaid cannot ask for funds back D. DO NOTHING AND TAKE THE RISK YOU WILL NOT END UP NEEDING SPECIALIZED CARE IN A NURSING HOME 7. WHAT TO DO IF NO PLANNING WAS DONE!!!!!!!! (JUST ENTERED NURSING HOME) A. EXEMPT PROPERTY $4,000.00 $1,500.00 CASH VALUE LIFE INSURANCE $3,000.00 BURIAL FUND BURIAL PLOT AUTOMOBILE HOME SPOUSAL IMPOVERISHMENT RULES B. Penalty Period Now Starts day application for medicaid filed. $100,000.00 given to kids 4 years ago. No money apply for medicaid. State will not help for 1 year (where do you get money?) IV. ESTATE TAX PLANNING $ 2 million in 2008-45% $ 3.5 million in 2009-45% $ No Estate Tax in 2010 $5 million in 2012- 2013?? 1. REVOKABLE TRUST FOR H&W 2. AB WILL WITH 50/50 SPLIT OF ASSETS (TESTAMENTARY TRUST) H&W 3. GIVE AWAY PROPERTY $12,000 PER YEAR/ PER PERSON 4. CHARITABLE REMAINDER TRUSTS OR GIFTS TO CHARITY OUTRIGHT