[WSBAPT] Trusts to Protect Assets from Medicaid

[J A Cyphers]

Obviously family history will have a lot to do with it.
But to just put things into perspective, attached is a recent article from
the Seattle Times with the statistics of ending up in a nursing home.
This is just part of the items to consider in making such decisions. 
 
    
  
Jackie Cyphers
Jeannette A. Cyphers, Attorney at Law
P. O. Box 908   
Edmonds, WA 98020-0908
425-776-5887
fax 425-640-0814
jacyphers at gmail.com
 
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-------Original Message-------
 
From: Marcus Fry
Date: 11/17/2015 12:00:15 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Trusts to Protect Assets from Medicaid
 
Jim:
The complexity of the situation involves defective grantor trusts, possible
3rd party SNT planning regarding the inheritance as well as balancing the
benefits of Medicaid vs. private pay factoring in eligibility for LTC
policies, etc.  I suggest you refer your clients or confer with attorney
Jacob Menashe http://www.hickmanmenashe.com/  over on your side of the
mountains.  
 
Marcus Fry
Lyon, Weigand & Gustafson PS
Yakima, WA.
 
 
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists
wsbarppt.com] On Behalf Of John Creahan
Sent: Tuesday, November 17, 2015 11:41 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Trusts to Protect Assets from Medicaid
 
Hi Jim,
Just to be clear, I do not do any Medicaid planning, so cannot offer any
insight into your clients’ Medicaid options.
Having said that, I view your clients’ situation differently. Your clients’
assets will not be exposed to Medicaid’s spend down provisions unless they
choose to use Medicaid. 
My question is: why would they want to use Medicaid? I am confident that,
given their druthers, your clients would rather spend their golden years in
a (pricey) private pay facility than in a lower-cost (to them anyway)
Medicaid-eligible facility. 
Again, I don’t know what you mean when you say they have “substantial wealth
” Still, if they are like my clients in their early 70s, they have a lot of
living to do. 
Do they really want to give away their assets, to impoverish themselves, for
the next 20 years, just to make sure that they can’t afford a private pay
facility?
If they haven’t already talked to a financial planner, I would recommend
they do so. A planner could help quantify the risks for them and help them
better understand their future financial needs.
Hope this helps,
John 
 
John Creahan
206-621-5848
www.cairn-law.com
 
 
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists
wsbarppt.com] On Behalf Of Jim Doran
Sent: Tuesday, November 17, 2015 11:01 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Trusts to Protect Assets from Medicaid
 
John:
What they are concerned about is that if one of them does have to go into
the longterm care and potentially hospitalization, and their relatively low
insurance does not cover all the expenses, they will have to expose their
assets to the spend-down provisions or not qualify at all for Medicaid.  
Am I missing something here?
Jim


James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com
www.doranlegal.com
 
On Tue, Nov 17, 2015 at 10:50 AM, John Creahan <john at cairn-law.com> wrote:
Jim,
Before you start implementing your clients’ plan, I suggest you have a long
conversation with them about what they really want. We all have different
interpretations about the meaning of “significant assets,” but given your
brief description, it seems very unlikely that they would ever need Medicaid
 
Even if they succeeded in giving all their assets away, what would they
gain? If they needed long-term care, which they might not, the government
would provide some financial support that would allow them to live in a very
basic facility.
If they compared private pay facilities to their Medicaid counterparts, they
might reconsider their choices. If they are worried about spending down all
their wealth on long-term care, they might want to look into purchasing
long-term care insurance. 
Hope this helps,
John
 
John Creahan
206-621-5848
www.cairn-law.com
 
 
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists
wsbarppt.com] On Behalf Of Jim Doran
Sent: Tuesday, November 17, 2015 10:22 AM
To: Real Property Section <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Trusts to Protect Assets from Medicaid
 
Hello Listmates:
I know this is a common question and I also know that there is tension in
the law regarding how and even "if" this can be done.  I have a client that
is asking the question in a pretty straightforward manner.  I think this
issue goes to the lack of progress in our society concerning health care and
dying.
H & W, both in their early 70s, want to put their significant assets, two
pieces of real estate and probably a third very valuable one that they will
receive as an inheritance from mother, into a trust to protect them from the
Medicaid asset requirements for eligibility and from the spend-down and
recoupment provisions of medicaid.  I would imagine the protection from
creditors in general is also part of the concept.
The concept is to put the assets into an irrevocable trust that gives them a
life estate in the property they choose to live in.  The trust would direct
that the remainder at the death of the second trustor would go to the
children in a typical scheme.  H & W would keep some assets, such as
investment funds and some cash and regular monthly income, out of the trust
to live on.  Those assets would not be protected.
One question for them is, who will be the Trustee?  This is an irrevocable
trust so you better choose wisely.
For me, the question is whether this can be done at all and how it can be
done.  I am aware of the five year look-back provisions so we want to do
this asap.
I do have access to the desk books and other library sources.  If someone
can point me in the right direction, give me the right name for this kind of
trust, or send me a model, it would be appreciated.
Jim Doran
 


James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com
www.doranlegal.com

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