[WSBAPT] Trusts to Protect Assets from Medicaid

Tue Nov 17 12:14:46 PST 2015

I would echo my colleagues’ comments.  There are a lot of moving parts.  A
lot of which involve practical considerations over the level of care, an
appropriate facility (Transition to Medicaid, beds available), and what the
client really wants.  Make sure they understand the potential pitfalls and
possibly refer this one out.

Best,

Note new firm information below:

*David A. Kazemba*

Overcast Law Offices, PS | 23 S. Wenatchee Ave. Suite 320 | Wenatchee, WA
98801 | (509) 663-5588 | dkazemba at overcastlaw.com

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*From:* wsbapt-bounces at lists.wsbarppt.com [mailto:
wsbapt-bounces at lists.wsbarppt.com] *On Behalf Of *Marcus Fry
*Sent:* Tuesday, November 17, 2015 11:55 AM
*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 <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 <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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