Mistake #4 – Failure to plan for Medicaid and Veteran’s benefits
A married veteran can qualify for up to $2019 in aid and attendance benefits. A single Veteran can qualify for up to $1703 and a widow of a veteran can qualify for up to $1094. The veteran must have served at least 90 days and at least one of those days needs to be during a defined period of war. The veteran must have a medical need and must need help with activities of daily living (bathing, dressing, toileting, etc.). There are income criteria, but medical expenses are deducted from the income, which can include the cost of home health care, assisted living and nursing home. Net worth is considered excessive beginning at $20,000. Between $20,000 and $80,000 of net worth, the VA conducts an administrative review. Over $80,000 the assets must be spent down. There is currently no look-back for gifts made by the veteran, but Congress is considering enacting one. When the veteran makes a gift to a family member or friend, I always recommend that that gift be placed into a trust for the benefit of the veteran, so no one forgets that it is the veteran’s money and the money is protected from divorce, creditors and lawsuits. The trust also provides a clear plan as to who is going to manage the money for the veteran if something happens to the first trustee.
I once had a case with a veteran’s wife, where her husband, the veteran, had Alzheimer’s, and she was becoming exhausted caring for him. However, she wasn’t ready to put him in a nursing home. I helped her get approximately $1900 per month that could be used for his home health care.
I have actually had 2 clients whose husbands had Alzheimer’s die before their spouses because they became so exhausted, so I always talk to the spouses about taking care of themselves. That is one of the things I love about Veteran’s benefits is that you can make such a difference in the person’s quality of life.
Medicaid is a way to get the federal government to pay for skilled nursing. There are asset and income requirements. With a married couple, there are ways to protect all the assets, and with a single person we can protect about 1/2 of the assets.
The first lady I helped with Medicaid was 65 years old. Her husband needed to go to a nursing home, but she was healthy enough to stay in independent living. They had $300,000 that they had saved during the course of their marriage. Under the Medicaid rules and without advanced planning, she was allowed to keep around $100,000 and the rest would have to be spent before he qualified for Medicaid. Her rent in independent living was approximately $36,000 per year. Her next question was, “What happens when I am 68 years old and have spent all the money on rent?” Through advanced planning, we were able to protect the full $300,000.