Presenting a live 90 ‐ minute webinar with interactive Q&A VA Benefits and Medicaid Eligibility Meeting Complex Requirements for Benefits Qualification and Application WEDNES DAY, JANUARY 30, 2013 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f Y ale S . Hauptman, Attorney, Hauptman & Hauptman , Livingston, N.J. Laurie A. Hauptman, Attorney, Hauptman & Hauptman , Livingston, N.J. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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V.A. Aid & Attendance Benefits Yale S. Hauptman Laurie A. Hauptman 4 4 January 30, 2013
World War II World War II Korean War Korean War Dec 7, 1941 Dec 7, 1941 — Dec 31, 1946 Dec 31, 1946 June 27, 1950 June 27, 1950 — Jan 31, 1955 Jan 31, 1955 Vietnam War Vietnam War Aug 5, 1964 Aug 5, 1964 — — May 7, 1975 May 7, 1975 Feb 28, 1961 if served in Vietnam Feb 28, 1961 if served in Vietnam 5
To Qualify for Pension: the Wartime Veteran must ha e the Wartime Veteran must have served in the U.S. Armed Forces and…. Served at least 90 days active duty Served at least one day during wartime y g Was honorably discharged 6
To Qualify for Pension (C Pension: (Continued) ti d) Is over 65 years old Is over 65 years old, blind or disabled Has substantial recurring Has substantial recurring, unreimbursed Medical Expenses Has Limited Household income Has Limited Household income and assets to pay medical expenses expenses Has Expectancy of living and paying future medical expenses paying future medical expenses 7 7
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Proof of Medical Expenses Needed d d A Physician must provide a diagnosis A Physician must provide a diagnosis supporting the scope of care and supporting the scope of care and supporting the scope of care and supporting the scope of care and corresponding expenses being corresponding expenses being 10 10 provided provided id d id d
The Net Worth Limitation The Net Worth Limitation Exempt Assets: Exempt Assets: Exempt Assets: Exempt Assets: Your house Your car Your household and personal goods l d 11 11
Countable Asset Limitation Countable Asset Limitation No definite number, but less than No definite number, but less than approximately $80,000 approximately $80,000 approximately $80,000 approximately $80,000 12 12
The Critical Calculation: e C t ca Ca cu at o : Gross Household Income Gross Household Income Recurring Unreimbursed Medical Expenses(UME) Recurring Unreimbursed Medical Expenses(UME) Income for Veteran Administration Purposes Income for Veteran Administration Purposes (IVAP) (IVAP) ( ( ) ) 13 13
Maximum Available Pension Resource (MAPR) MAPR is the maximum available is the maximum available pension per categor pension per categor pension per category of need pension per category of need of need of need 14 14
Special Monthly Pension Rates Paid to Veterans Age 65 or Paid to Veterans Age 65 or Older, Permanently and Totally Disabled, or a Surviving Spouse For 2013: MAPR *MMC Permanently and totally disabled veteran Permanently and totally disabled veteran $20,796 $20,796 $1,733 $1,733 In need of regular aid and attendance With one dependent $24, 648 $2,054 Surviving spouse $13,356 $1,113 15 15 * Maximum Monthly Check
Case Study 1: Case Study 1: M Married Couple, Vet needs A&A i d C l V d A&A 16 16
Case Study 1: Case Study 1: (continued) MAPR: $ 24,648 (IVAP): $(12,600) Rounded to $0 R d d t $0 Couple will receive $2 054 Couple will receive $2,054 monthly Benefit, tax free! When IVAP is less than MAPR a benefit may be awarded a benefit may be awarded 17 17
Case Study 2: Case Study 2: Widow of Veteran Gross Income: $18,000 UME (home care, prescriptions, co-pays): $15,000 prescriptions, co pays): $15,000 $3,000 $3,000 18 18
Case Study 2: Case Study 2: (continued) MAPR: $ 13,356 (IVAP): $ $3,000 Partial Benefit!: $10,356 When UME fails to meet or Wh UME f il t t exceed Gross Income, a partial benefit is available. When IVAP is greater than MAPR When IVAP is greater than MAPR 19 19 NO benefit is awarded
Any VA penalty for gifting assets? VA currently has VA currently has No Penalty No Penalty Period Period of ineligibility for gifting Period of ineligibility for gifting Period of ineligibility for gifting of ineligibility for gifting “excess” assets to other “excess” assets to other family members family members family members family members 20 20
Should one give assets away to qualify? l f Th Th The answer depends on: The answer depends on: d d d d Family dynamics Life expectancy Likelihood of increased future medical expenses Likelihood of increased future medical expenses Tax consequences Financial benefit vs. financial loss Financial benefit vs. financial loss The “Medicaid Trap” caused by gifts within 5 years to nursing home need 21 21
“Beware “Beware the Medicaid Trap!” the Medicaid Trap!” If one needs If one needs If one needs If one needs Medicaid within Medicaid within 5 5 years of any transfer for less 5 years of any transfer for less 5 f f t t f f f f l l than fair value, than fair value, he or she he or she will be penalized by penalized by a pe od o a pe od o a period of Medicaid benefit a period of Medicaid benefit ed ca d be e t ed ca d be e t 22 22 ineligibility! ineligibility!
How Does Medicaid Work? For A Single Person Exempt Assets Exempt Assets Countable Assets Countable Assets Almost Everything Else House Car Funeral Life Insurance Household Goods 23 23
A Single Person Example A Single Person Example $100 000 $100,000 $2 000 $2,000 24 24
Married Couple (Example) $500,000 $231,840 $ 3 ,8 0 (John) (Sally) $ 115,920 115 920 $ 115,920 115 920 John & Sally Smith John & Sally Smith 25 25 $2 000 $2,000
Look Back Period 5 Years Penalty Starts When: Penalty Starts When: Penalty Starts When: Penalty Starts When: In Nursing Home (or need nursing g ( g home level of care) “Otherwise Eligible” $2,000 in assets 26 26
All Trusts Are Not Created Equal All Trusts Are Not Created Equal Revocable Living Trust Credit Shelter Trust Irrevocable Life Insurance Trust Spend Thrift Trust Income Only Type Trust Income Only Type Trust Veterans Eligibility Trust V t Veterans Eligibility Trust V t Eli ibilit Eli ibilit T T t t 27 27
Trust to Qualify for Medicaid Irrevocable Principal cannot be distributed Income typically can be distributed Income typically can be distributed This is a problem for qualification for VA benefits under the “relinquishment” rule b fi d h “ li i h ” l VA will count the trust assets under VA asset rules 28 28
Veterans Eligibility Trust Can be grantor trust or not trust or not Income payable to lifetime beneficiaries and not to grantor and not to grantor Assets in trust not countable f for VA purposes VA 29 29
Veterans Eligibility Trust (Continued) (Continued) Home can be placed Home can be placed in trust and qualify for Section 121 exclusion Section 121 exclusion Limited testamentary power y p of appointment to allow for step up in basis upon death step up in basis upon death 30 30
How is VA benefit treated by M di Medicaid id Aid and Attendance is NOT treated as Aid and Attendance is NOT treated as income for Medicaid eligibility purposes Other VA benefits are treated as income Check your state’s Check your state s Medicaid regulations 31 31
How is VA benefit treated by Medicaid (continued) M di id ( i d) However VA benefit is available to be used i il bl t b d towards care when on Medicaid Once VA knows you are receiving Medicaid they will reduce pension to $90 Medicaid they will reduce pension to $90 per month 32 32
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