All About Spend Downs, Part 3

*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.

The following podcast is by Mr Jim Koewler, elder law and special needs attorney, helping and protecting those who need long term care. And Welcome back everyone to answers for elders radio network and elder law attorney, Jim Taylor and myself. We are talking about long term care. If you need it now, and obviously there’s other resources out there for you to get to. You might be in a situation where you’re not sure that you have enough money to provide for you and or your spouse, and so jim and I are talking about ways in which you can spend down your money to access medicaid or different types of pension type programs, you know, va benefits, etc. So, Jim, welcome back. This has been a really, really good half hour so far and I’m looking forward to the rest of this cut topic. So just just can before we start, we’re kind of of the midway. Can you just give us a like a summary of where what we’ve talked about so far? Okay, just so far we’ve talked about what financial eligibility looks like for married couple for Medicaid and for be a benefit, the attention benefits in particular, but most people all aid in attendance correct. Technically that’s not correct. Eat intendance is an add on to that, in an add on to some other things. But most people use the term aid intendance because it’s the biggest benefit in that program. And we’ve talked about some of the ways to make eligibility win dude, to spend down right when you’re single or, and many of them apply for when you’re married. But we haven’t talked about some of the specific things that you can do when you’re married and your spouse is relatively healthy by comparison and only part of the couple needs long term care. And we’re going to take this. We’re going next. I’m going to talk about that now, are we not? Yeah, Yay, okay. So, Jim, if you say your spouse needs care, you’re still in the house. You talked a little bit about down to the hundred and thirty thousand dollars you’re allowed to keep for yourself and if you’ve got a million dollars, you’re paying privately. That’s just the way it is. So there’s other ways. Perhaps perhaps millie, if you get a million, you probably have enough income off of that to pay privately forever. Probably if me a row, you may have to eat into it a little bit. Okay. Well, let’s say you got a quarter a million. You’re going to moncherm care is gonna wipe you out, even if you’re right, mom. That’s what Yad Yep, when you’re paying tenzero a month, it goes pretty quick. Yeah, yeah, okay. So if you’ve got a married couple, as as I mentioned before, if you’re seeking va pension when of you is a veteran, you want to be a pension menefit, the the aid in attendance thing. They let the couple keep about a hundred thirty thousand dollars. It gets, as they mentioned, gets really weird with the income, but will still stick with that number. If for Medicaid purposes, they will allow the healthy spouse to keep up to about her thirtyzero’s actually a little more than that, but it’s not around number. So let’s stick on thirty, as long as the couple started with at least two hundred and sixty. Okay, it’s a half. It’s a half and half thing. And then there’s a bottom number at about twenty eight thousands, below which they won’t require half and half. They will let the wealth spouse keep more than half or maybe all of it. Okay. If it’s twenty eight or below, they just let the well spouse keep all of it. Okay. That’s called community spouse are sorry, the avoidance of spousal impoverishment, Okay. But everything in between that twenty eight and the thirty, they require them to go half seas, okay, with the bottom half being no smaller than twenty eight and and the top half belonging to the well spouse, being no bigger than about thirty. So what can we do there? Or if you got over two hundred and sixty, you so if you have a spend down, I remember you’re trying to get to three thousand and Washington two thousand, and Ohio and most states, I think it’s two thousand. By the way, California is talking about Hundred Thirty Tho. They haven’t done it yet, but they’re talking about that. That’s the gossip going around. Make you put all the older law turneys in California out of business? Probably. Sorry, guys and but what can you do to spend down when you have a relatively healthy spouse but you still want to get Medicaid coverage and at the same thing woul apply to va coverage. You’ve got more than thirty. What can you do? Okay. So first of all, between sessions you mentioned, we probably got to talked about what are resources? What kind of money we talked about? Is it just money in the bank? No, okay. We’ve mentioned when we were talking about be a that even the house counts if it’s got acreage more than two hundred, more than two acres. The House and the two acres it sits on is fine, but all the other acreage, whether it’s a separate parcel or not, counts as resources. Medicaid, at least in most places, doesn’t look at it that way. Okay, they’ve got other ways to look at it. They may or may not take it apart. So real estate counts it, but if it’s if it’s the homestead, it may be limited in size, but still the homestead doesn’t count. That would be political suicide. They go after people’s homes. So Medicaid doesn’t. But you got real property, that counts. You’ve got stocks and bonds, those count. You’ve got an IRA. That’s a whole different question. That is at least a session by itself, because it maybe three or four, because that’s really in flux right now. Okay, what happens with let’s go there. Okay, but anything that’s not a retirement fund. Okay, other than you get to keep your house, even if you’re not in it. You can intend to return home. And now the house doesn’t count, at least for a while. Okay, okay, we’re talking initial eligibility right now. We’ll talk about what to do after your eligibility at some point in the future. Okay, but initial eligibility, if you intend to return home. That’s a federal rule. So every state should be following that. Some may not. Ohio didn’t used to, but most states, if you intend to return home, it doesn’t count, at least at the time. You’re trying first to get medicated cover. Okay, if you’re, if it’s your home, even if you’re not in it for BEA purposes, they still don’t count the house in two acres and at least as I read the current rules, they never count them. So so the house is exempt. With Medicaid, one vehicle is exempt, even if you can’t drive, even if your bedback is Medicaid. Got Tired of sorting out who can drive a who can’t, so they get set heck with it. One vehicle, okay, okay, it can be a mobile home, it can be a VW. Okay, one vehicle. All other vehicles, if you have them, count toward what account? What are your resources? Okay, they don’t care about your household goods. But if your household goods includ up Acasso, yeah, those probably count. Okay, if you’re also goods include bars of gold as decorations, yeah, then they count. But you know, they don’t care about your frigerator, don’t care about your freeze. They don’t care about your dining room tape. Okay, they may care later and we’ll talk about what’s called medicator state recovery in some future installment, probably not today, but for at initial eligibility. They don’t care about that stuff. But stocks, bonds, cash value, life insurance policies, annuities, you can cash out, remember, outside the IRA. Now, inside an IRA K for three B SEP wroth whatever. Ignore that for now. Whole different thing. But anything outside those life insurance IRAIS, stocks, bonds, Muni Funds, whatever, those all count. So if you could cash it in, if you could turn it into cash, if you could sell it to turn into cash to pay for your care, then medicates are going to count it, other than IRA, irate other retirement fros. Okay, with those exemptions. The household goods, your personal effects. They’re not coming after your wedding ring, you’re not coming after your engagement ring. They may come after if you got a thirtyzeroll rock on your finger, they may come after it after you die, but they’re not going to come after it while you’re alive. Okay. And the your home, if you intend to return home or if you’re in it or if your spouse is in it. And that one vehicle, okay. Plus, if you have life insurance, and we’re seeing fewer and few of these, but there are people out there with with this kind of life insurance with a face value less than fife hundred, one, five, zero, zero, fifteen hundred dollars. That’s exempt. Never to Fugar out wives exempt maybe just too small to fuss with. Even if you got a cash value of ten grand, if it’s face values one fifteen hundred, you get to keep one of those. Some states interpret that is you can keep small policies with small face value use if they add up to no more than fifteen hundred. Okay. So reading above a fifteen hundred would count. Any policy that puts you over that fife hundred would count. Okay. So those are all in resources have to be spent down. So what can you do if you’ve got a spouse who is staying home and you don’t want to burn everything off and then you want to take care of the spouse at home? So okay, still spend on yourself. First, the the dentures, the eyeglasses, things like that, because that’s quality of life for the person who needs care. Sure, after that, prepay funerals for both you and your spouse. If you haven’t already done it. That’s great. Yes, is not really benefiting the spouse at home, but it is benefiting the family. Yes, but if the spouse and home, if the House needs a the roof, if the house, if they, if they spouse at home wants to update the dining room, any expended. Remember, expenditures are okay as long as you’re getting value expenditures on the house. Or Okay because the spouse is getting be model the bathroom to make model back up aging in place friendly, have the you know, curveless shower put in. You know, widen the doorway, anything like that. So if there’s anything that needs to be done in the home, if you know, even if, even if the spouse doesn’t need them yet, would allow the stuffs to stay in the house. All they met in the Futus. One Who needs care. Is it in the house currently? Right? And it we look like we’re doing it. You know, we’re riding door room door frames for the one who’s in a nursing homes. Where are we bothering? It’s still allowed because the spouse at homemade right, they go longer. Right. I once had to help explain to Medicaid that we were buying a new car and putting a new garage door on because my spouse hit the garage door with the car. Total the car. I had to replace the garage door and no problem. No problem. Yeah, we had to turn over the insurance proceeds from the car, but, you know, still way different. You know, absolutely sheltered a lot of value that absolutely. And then, finally, this may be state dependent. Okay, it may not be, because in Ohio we want it by showing what federal law provided. But your state may not have gone through that transformation yet. Mean not have had its ass handed to it in court. If you’ve got extra money that has to be spent down, you may be able to take that extra money, and I’m again everything. Everything’s money for this purpose. Okay, turn it into cash and buy an annuity that pays to the well spouse. Oh Wow, if you buy a Medicaid compliant annuity, and there are certain rules for that, Medicaid has to be one of the interest officiary. I’ve never heard of this. We has to be equal monthly installments. It cannot be forever. Has To be fixed time period shorter than the annuitance life expectancy. Okay, right, if you meet those the annuity is income to the spouse and Medicaid never requires a spouse to throw his or her income in for the one who needs Medicaid coverage. So that is a way to preserve a whole bunch of assets by turning him into income. And then one to get back to the to the Welsh. Now they’re wealth again, but belong right to the well spouse, right the same way that if you needed long term care and your spouse hit the lottery after you run Medicaid coverage, that’s all her winnings. No, matter how big. Okay, interesting, interesting. So let in our last the next segment. We’re going to wrap up this conversation and you know this is an important thing for all of us to look at. How do we not only help ourselves but I feared thinking about a loved one that maybe needing care right now? These are some really powerful questions. What I’d like to do in this next segment, Jim, is talk about what kind of questions should you be asking an elder law attorney if you’re going to meet with them, and what are the things that you should have be prepared to answer? I think those are really important questions that we go to and Jim and I will be right back Brad. After this state of Ohio residence, you have a friend to help you navigate long term care while protecting your assets. You can reach Jim at www dot protecting seniorscom or just email him at j Koewler afe. That’s j Taylor AFE at protecting Seniorscom.