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<p class="MsoNormal"><span style="font-size:12.0pt">In law school on the first day of Income Tax class, my professor (who was Kit Querna, a wonderful attorney in Spokane who has since passed away) wrote the “first rule of tax” on the board in capital letters:
PIGS GET SLAUGHTERED<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Elder Law attorney answer:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">No “trust for all assets” is needed IF they are talking about health insurance coverage only and not “institutional Medicaid” for long term care.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">IF they are talking about medical insurance. They can apply for Obama Care (Medicaid medical benefits) and their assets are not counted toward eligibility, just income.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Example: I have a client who was always low income, but inherited a nice amount (about $200K) from her mom’s estate. The money was invested and she applied for and receives medical insurance through the Washington
“exchange”. Her provider is Molina and she pays no premiums because she is “low income” – only the interest, dividends and capital gain on her investments are counted for eligibility for “Obama Care” insurance coverage. She takes a monthly draw from her inheritance
fund as her income.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Your clients probably have so much in passive income that they will end up with paying a premium for their coverage.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">As Diane said: some people believe or are told that they can transfer assets into an irrevocable MAPT (Medicaid Asset Protection Trust) and then later qualify for Medicaid assistance in paying for long term
care (assisted living, memory care, nursing home, etc.). The problem is that there is a 5 year look back on gifting. If they need care before 5 years have passed, there is a gifting “penalty” that is applied forward, from the date of the application.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">In addition, many facilities are requiring 24 to 36 months of private pay before Medicaid can become a payment source because Medicaid reimbursement rates have not kept up with costs at those facilities. The
facilities also limit the number of “Medicaid beds” because of this issue.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt">Jane.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="color:black;mso-ligatures:none">Jane G. Bitz <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none">Of Counsel <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none">Wolff, Hislop & Crockett, PLLC <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none">12209 E. Mission Ave, Suite 5 <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none">Spokane Valley, WA 99206-4824 <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none">(509) 927-9700 x126 <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none">FAX: (509) 777-1800 <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:black;mso-ligatures:none"> <o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="mso-ligatures:none">From:</span></b><span style="mso-ligatures:none"> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Paul Neumiller<br>
<b>Sent:</b> Thursday, July 27, 2023 1:53 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBAPT] Trusts and Friend-Educated Clients<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">By the way, the couple is healthy, happy, and in their mid-50s. Estate size of around $5 million.
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Times New Roman",serif;mso-ligatures:none">IMPORTANT NOTICE: This e-mail message is intended to be received only by persons entitled to receive the confidential information it may contain. E-mail
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<p class="MsoNormal"><b><span style="mso-ligatures:none">From:</span></b><span style="mso-ligatures:none"> Paul Neumiller
<br>
<b>Sent:</b> Thursday, July 27, 2023 12:55 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Trusts and Friend-Educated Clients<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif">This was a new one for me so I thought I’d bounce it off the hive-mind. New estate planning clients have insisted they need a WA trust because the trust would make their
Obama Care expenses free. They say that their “good and very knowledgeable” friends told them that they set up a WA trust and now they qualify to get all medical expenses for free. Any ideas?
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none"><o:p> </o:p></span></p>
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