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By Nancy Burner, Esq.

What does “look-back” mean? What is spousal refusal? Will Medicaid take my house if my husband has to go into a nursing home? All too often these are the questions we hear from our clients who are faced with navigating the Medicaid landscape once a crisis occurs. 

In New York State, the Medicaid program can provide a source of payment for those who are financially eligible and require care, either in a nursing facility or in their own home. In order to be eligible for Chronic Care Medicaid (payment for nursing home care), an individual must meet certain income and asset requirements.

To start, the applicant may have no more than $14,850 in liquid nonqualified (nonretirement) assets in their name. They may have qualified (retirement) assets in an unlimited amount provided they are taking a monthly distribution. 

When applying, the Department of Social Services will require a full financial accounting from both the applicant and his spouse for the five years immediately prior.  This is what is often referred to as the look-back. The purpose of this investigation is to determine among other things whether any transfers were made during this time period that would affect eligibility. The rule is that for every $12,390 that was transferred, a one-month penalty will be imposed.

For example, if in the financial review it is discovered that the applicant gifted $40,000 to his children during the look-back period, a determination will be made that imposes a penalty for roughly three months. This means that Medicaid will not pay for the first three months of nursing care, and the family will be responsible to pay privately. The aggregate result of this type of penalty is roughly a dollar-for-dollar penalty, meaning that for each dollar that you transfer you will have to pay a like amount in nursing home care should the need arise. This rule applies unless the transfer is considered an exempt transfer.  Transfers that are exempt do not create a penalty and therefore do not affect Medicaid eligibility. In New York State, transfers to spouses are exempt under the provisions of spousal refusal.

We use the term “spousal refusal” when the community spouse (the spouse who is not institutionalized) chooses not to contribute to the cost of care for an institutionalized spouse. This means that the institutionalized spouse cannot be denied Medicaid because the community spouse refuses to contribute. Moreover, the above penalties cannot be assessed due to the fact that the signing of a spousal refusal makes it such that the transfer is an exempt transfer.  The refusing spouse must still provide any and all financial information and cooperate fully with the Medicaid application. It is important to note that once Medicaid is approved, the county does have the right to seek recovery against the community spouse. Other exempt transfers include transfers to disabled children, transfers of the primary residence to a caretaker child and finally transfers of a primary residence to a sibling with an equity interest. 

With respect to income, an applicant for Chronic Care Medicaid may only keep $50.00 of his income monthly. His spouse may retain the greater of (1) all of his or her own income or (2) all of his or her income and enough of the institutionalized spouse’s income to bring them to $2,980.50. 

Community Medicaid is the program that covers care at home.  This program will cover the cost of a personal care aide to assist with activities of daily living such as bathing, cooking, dressing, etc. The program may also cover day programs, transportation to medical appointments, assisted living programs and some durable medical equipment and supplies. For 2015, an individual applying for Community Medicaid can have no more than $14,850, not including their home, in nonqualified (nonretirement) liquid assets. They may have qualified (retirement) assets in an unlimited amount, provided they are taking a monthly distribution. 

It is important to realize that the home is an exempt resource while the Community Medicaid recipient is alive; however, additional estate planning should be considered to avoid a Medicaid lien after the recipient’s death. While these limitations may seem daunting, the good news is that there is no look-back period. That means someone looking to get care at home can transfer assets in one month and be eligible for Community Medicaid the following month with no penalty assessed for the transfer of assets. 

With respect to income, an applicant for Community Medicaid may have no more than $845 per month.  An individual with an income over the $845 can opt to use a Pooled Income Trust. The excess income would be paid to a pooled trust company, and the trustees of the trust would pay expenses for the benefit of the applicant.

As you can see from this brief overview of Medicaid, there are many options available for care when the need arises. Make sure you are seeking advice from those knowledgeable in the area to make sure that you are getting the care that you require without sacrificing all that you have worked for.

Nancy Burner, Esq. has practiced elder law and estate planning for more than 25 years.

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Mayor blasts state comptroller’s scoring of village

Huntington Bay Village’s mayor is contesting a fiscal rating by the state comptroller’s office. Photo by Victoria Espinoza

Huntington Bay Village’s mayor strongly disagrees with a recent release by the New York State Comptroller’s office ranking the municipality as susceptible to fiscal stress.

The comptroller’s office sent out a statement about the scores last week but Herb Morrow said  the score is misleading and Huntington Bay is in sound fiscal shape.

“The report is worthless because what they do is take a snapshot of one point in the year,” Morrow said in a phone interview. “They don’t take the financial planning into consideration.”

Morrow said the comptroller’s office ranked Huntington Bay as “susceptible” to fiscal stress in February because its reserve fund decreased.

“We did some major reconstruction of the police department to save taxpayers an enormous amount of money in the long term,” Morrow said. The reorganization included incentives and retirement costs that reduced reserve funds but, Morrow said, over time would reduce village payroll for police by $400,000.

“We are in great shape, and the residents are not listening to the comptroller’s story.”

Despite what Morrow said, the state comptroller’s office confirms Huntington Bay is susceptible to fiscal stress.

According to a statement from Comptroller Thomas P. DiNapoli’s office, “susceptible to fiscal stress” is the least severe of three categories that all municipalities found to be under fiscal stress were filed into. The other two category designations are “moderate fiscal stress” and “significant fiscal stress.”

In order to be designated as “susceptible to fiscal stress,” a municipality has to reach at least 45 percent of the total points of the fiscal stress score. The scores are made using annual financial reports that are submitted by local governments to the state comptroller’s office. Fiscal stress is usually defined as a local government’s inability to generate enough revenues within its current fiscal period to meet its costs. The comptroller’s system evaluates local governments based on both financial and environmental indicators.

The indicators of a local government’s financial state are its year-end balance, operating deficits, cash position, use of short-term debt and fixed costs. Environmental indicators include population, age, poverty, employment base and more. Fund balances, like Huntington Bay’s reserve fund balance, are used to identify the amount of money available to cushion revenue shortfalls or expenditure overruns.

According to DiNapoli’s office, a negative or low-level fund balance can affect the local government’s ability to provide services at current levels. It also claims that fund balance is a strong measure of the financial condition of a local government.

In a letter Morrow posted to the Huntington Bay website when the scores were originally released in February, he criticized the message that the comptroller’s office was sending to residents.

“It makes the jobs of local leaders harder. It is a waste of New York State taxpayer dollars,” Morrow said in the letter. “With no conversation or discussion with our village, we were given a negative designation that is very misleading to our residents. By releasing reports that create inane headlines, they confuse residents.”

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By Linda M. Toga, Esq.

The Facts: I recently divorced my spouse. I was told that once the divorce was finalized, it won’t matter that my spouse is named as the primary beneficiary of my estate in my will since that designation will essentially be ignored.

The Questions: Is it true that my estate will not pass to my ex-spouse regardless of the fact that he is named as a beneficiary in my will? If so, is there any reason for me to update my will? What other documents, if any, should I revise now that I am divorced?

The Answer:  It is true that under New York law, if you are divorced from your spouse at the time of your death, the bequests made to him in your will will be revoked and your estate will pass as if your ex-spouse predeceased you.

In addition, if you named your ex-spouse as executor, that designation will also be revoked. However, the fact that the bequest to your ex-spouse and his appointment as executor are automatically revoked as a result of your divorce, it is important that you review not only your will but also your power of attorney, health care proxy, life insurance and account beneficiary designations and the title to your real property to ensure that your wishes with respect to your assets and end-of-life care are properly memorialized and honored.

If, for example, your ex-spouse was named in your will as your executor and his sister was named as your successor executor, you may want to revise your will so that no one in your ex-spouse’s family is in charge of your estate. Similarly, if you created a trust in which you named your ex-spouse or someone in his family as a trustee or beneficiary, now that you are divorced you may want to name other people to serve as trustee and to enjoy the benefits of the trust.

As for your power of attorney and health care proxy, if you do not want your ex-spouse to be your agent, you should have new advanced directives prepared. Otherwise the person you named as your successor agent will become your primary agent, leaving no successor agent in the event the primary agent predeceases you. If that were to happen, and you got to the point where you could not make medical decisions and handle your own affairs, a court may be asked to name a guardian to act on your behalf. Clearly the better course of action is for you to update your power of attorney and health care proxy in light of your divorce.

While you are at it, you should also review and, if necessary, update the beneficiary designation on your life insurance policy and retirement plans and remove your spouse as a co-owner on joint accounts and jointly held property. Since some retirement and pension plans are governed by a federal law that preempts the New York law revoking beneficiary designations from taking effect, you may need to obtain your ex-spouse’s consent to change some of your accounts and designations.

While you are making the necessary changes to your accounts, estate planning documents and beneficiary designation forms, you should consider asking your relatives to review their estate planning documents to ensure that their estate plans take into consideration the fact that you are divorced. It is likely that your parents, for example, would want to revise their estate planning documents if they left their estates to you and your ex-spouse, or if they named your ex-spouse as their agent under their powers of attorney.

Although I urge you to review with an experienced estate planning attorney your estate plan, your beneficiary designations and the manner in which your assets are titled in light of your divorce, I generally recommend that clients revise their estate planning documents as soon as a divorce action is commenced. That way if they die before their divorce is finalized, they can be assured that their soon to be ex-spouse will not inherit everything, be in charge of their estate or be in a position to make financial and medical decisions on their behalf in the event of their incapacity.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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By Nancy Burner, Esq.

Making end-of-life decisions is a crucial component of any estate plan. As Elder Law attorneys, we deal with these issues every day. Some advance directives are signed in an attorney’s office and some are executed with a health care provider. A short review of each document will help clarify the issues surrounding the Living Will, Do Not Resuscitate and/or Do Not Intubate, Health Care Proxy and Medical Orders for Life-Sustaining Treatment form.

The Living Will is a document which evidences an individual’s wishes regarding medical care or life support to be administered in the event their condition is terminal. There is no question that an individual has the absolute right to accept or refuse medical treatment on their own behalf.

The problem arises when the individual is incapacitated and cannot communicate their wishes. The Living Will is written evidence of the patient’s wishes. Some of the treatments that could be accepted or refused on the individual’s behalf include cardiac resuscitation, mechanical respiration, artificial nutrition and hydration, antibiotics, blood or blood products, kidney dialysis and surgery or invasive diagnostic tests. This document is always prepared for our estate planning clients, but need not be prepared by a lawyer.

Unlike the Living Will, the DNR form and procedures are governed by New York State law, and these orders are signed in a hospital, nursing home or mental health facility. (New York law also permits “out-of-hospital” DNRs in specific situations, but this is outside the scope of this article). DNR orders are only applicable to incidents of cardiac respiratory arrest and direct that no chest compression, ventilation, defibrillation, endotracheal intubation or medications be administered. A patient may express his wishes, or, if he is unable to do so, a family member, agent or friend can sign the DNR. The DNR is issued by a physician and must be on a NYS Department of Health form.

Another important directive is the Health Care Proxy. This document allows an individual to designate an agent to make health care decisions if he is unable to make these decisions for himself. The health care proxy need not be executed in an institution and it can be used anywhere. Typically, we prepare a comprehensive health care proxy for all our elder law and estate planning clients. The health care proxy applies to all medical care except artificial hydration and feeding. Therefore, the proxy should indicate if the agent is permitted to refuse hydration or feeding.

In June 2010, the state legislature passed the Family Health Care Decisions Act which permits surrogate decision-making for patients that lack capacity and have not previously signed a health care proxy and living will. However, I urge clients not to rely upon this legislation. The Act only applies to decisions in institutional settings.  Advance directives will ensure that your wishes are followed in — and out — of an institution.

The MOLST form is a document executed with a physician regarding the patient’s wishes with respect to life-sustaining treatment plans. The purpose of this New York State Department of Health form is to create a dialogue between a patient with a chronic or terminal illness and their physician that will transcend the DNR and Living Will. Unlike a DNR, the MOLST form follows the patient from one health care setting to another.

For example, if an individual were transferred from a hospital to a nursing home, the MOLST form would follow them; thus ensuring that their medical wishes would be conveyed and respected consistently across care settings.

In addition to documents that permit agents to withdraw or withhold treatment, there is also a document that makes it clear that you want every treatment available. The Protective Medical Decision Document (PMDD) is a protective Durable Power of Attorney for health care decisions that specifically limits the agent’s authority to approve the direct and intentional ending of the principal’s life.

Making directives in advance is smart. It allows you to make your own decisions based upon your own beliefs and wishes. But this planning should not occur in a vacuum. Once you’ve made your decisions, beyond signing documents, you must discuss these issues with your family and health care agents. Let them understand your directions and put them in a better position to make reasonable decisions based upon your expressed wishes.

The more difficult situations arise with individuals who are disabled from birth or become disabled before they can form an intent as to their end-of-life treatments.

New York courts continue to struggle with the question, attempting to balance the rights of the patient with the state’s interest in preserving life. In a recent upstate case, the Appellate Court reversed a lower Court decision and directed that a feeding tube be inserted for a 55-year-old man, over the objection of his parents.

The subject of the case, Joseph, suffers from profound mental retardation, cerebral palsy, spastic quadriplegia, curvature of the spine and dysphagia, or the inability to swallow liquids or solids. Without the feeding tube, he would not survive. The question is whether the feeding tube should be inserted, inasmuch as Joseph was never competent to express his wishes.

The parents argued that the feeding tube would be an unreasonable burden on Joseph, as he would have to live in a new facility, leaving the group home where he resided for 27 years. He would have to be restrained to prevent him from removing the tube, which could cause medical complications.

On the other hand, there was testimony from the medical director of the group home that until his hospitalization, Joseph was alert and communicative, appeared to be without pain, was social and could live many years with the feeding tube.

In directing that the feeding tube be inserted, the court held that “the burdens of prolonged life are not so great as to outweigh any pleasure, emotional enjoyment or other satisfaction that (he) may yet be able to derive from life.”

Whether you agree or disagree with the court, the importance of this case is that it promotes discussion amongst individuals that could one day face the same or similar circumstances. Take the time and discuss this with your loved ones. Make it easier for them to make these hard decisions should the situation arise. ,

Nancy Burner, Esq. has practiced
elder law and estate planning for 25 years. The opinions of columnists are their own. They do not speak for the paper.

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By Linda M. Toga, Esq.

The Facts: My mother’s brother, Joe, never married and did not have any children. He died with a will in which he left everything to my mother and nothing to his other sister, Sue. In fact, Joe did not even mention Sue in his will. Unfortunately, my mother died before Joe. I am my mother’s only heir. Sue had a son named Keith.

The Question: Is Keith entitled to a share of Joe’s estate or am I in line to inherit the entire estate?

The Answer: Fortunately for you, there is an “anti-lapse” statute in New York that is applicable to your situation. Under the statute, you are the sole beneficiary of Joe’s estate.

How It Works: In order to understand how the anti-lapse statute works, you need to understand the terminology used in the statute. The “testator” is the person whose will is being probated. The people who receive assets under the will are “beneficiaries.” “Issue” refers to a person’s children, grandchildren and successive generations who can trace their bloodline directly back to the person. A “bequest” is a gift that is made in a will. Generally, a bequest made to someone who died before the testator will “lapse,” resulting in the gift being distributed to other beneficiaries under the will.

The New York anti-lapse statute is designed to prevent the lapse of bequests made to certain groups of people who die before the testator. If the predeceased beneficiary is someone other than the testator’s own issue or siblings, the bequest lapses. 

For example, if Joe made a $50,000 bequest in his will to a friend and the friend died before Joe, the $50,000 bequest would lapse. The funds would not go to the friend’s children but would go to other beneficiaries under the will. In contrast, if the testator makes a bequest to a sibling and the sibling dies before the testator, the bequest does not lapse.

Instead, the bequest vests in the issue of the beneficiary. In other words, the assets allocated to the predeceased sibling will pass to that sibling’s children or grandchildren.

Since Joe and your mother were siblings, and your mother died before Joe, the bequest made to your mother will pass to you. However, if bequests had been made to both your mother and Sue, Sue’s son Keith, would, in fact, be entitled to a share of Joe’s estate. That is because the anti-lapse statute would dictate that the share of Joe’s estate allocated to Sue would pass to her issue.

There is often confusion among the beneficiaries of a will when one of the beneficiaries predeceases the testator. One way to avoid this confusion is to update your will not only when the people you name as executors and trustees die but also when a beneficiary dies. Naming contingent beneficiaries in your will also helps bring certainty and clarity to the probate process.

Linda M. Toga, Esq. provides legal services in the areas of estate planning and administration, small business services, real estate and litigation from her East Setauket office.

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Allows for more meaningful estate planning

By Nancy Burner, Esq.

As the federal and New York State estate tax exemptions continue to increase over time, clients are less concerned with the tax consequences of their estates and more concerned with protecting the beneficiaries from outside invaders, like divorcing spouses, creditors and long term care expenses.

As a result, the wills and trusts we draft today are geared toward protecting those heirs. It may be time to review your estate plan in view of the changes in the estate tax laws and the general evolution of trust law itself.

A major shift is in how we transfer assets to beneficiaries. Many clients in the past would create trusts that distributed assets to children at specific time intervals, i.e. upon turning the age of 25, 30, and 35. While this is still an option, it does not provide the maximum level of protection for the beneficiary.

By creating trusts that we refer to as “descendants’ trusts,” the beneficiary can have creditor protection, protection from divorcing spouses, Medicaid protection and protection against estate taxes when the assets are passed on to the beneficiary’s heirs.

This trust can be drafted with different options. The beneficiary can be their own trustee, co-trustee at a stated age and then their own trustee at a later age, or have a co-trustee indefinitely. The beneficiary can be entitled to the income of the trust and can distribute principal to themselves for health, education, maintenance and support. If the beneficiary needs principal for any other reason, they can appoint a friendly, independent trustee to authorize principal distributions. The trust can state where the assets will go on the death of the beneficiary without the beneficiary having discretion over the disposition at their own death.

Alternatively, the beneficiary can have a “limited power of appointment,” which allows them to designate where the trust assets will go upon their death. The limited power of appointment will state that the beneficiary can designate in a will, trust or separate instrument, the group of people that the assets can be given to upon their death.

For example, a father creates a trust and states that upon his death the assets are put into two descendants’ trusts, one for each of his children. The trust can state that each child has the power to appoint the assets to their spouses, descendants, and/or charities. In certain circumstances, a larger group of persons may be designated as the group to which the assets can be appointed.

Another change clients are making in their estate plans relates to the trust structure when leaving assets to a spouse. When the estate tax exemption for New York State was $1 million, a typical middle class couple on Long Island could easily have a taxable estate because of the high value of their home.

For these people, it was extremely important to create a credit shelter or bypass trusts to save estate taxes at the death of the second spouse. Luckily, with the increasing exemption at $3,125,000 in 2015 and $4,187,500 in 2016, this is less of a concern, but many clients have documents from before 2014 that may be obsolete.

Furthermore, the will or trust can add “trigger” supplemental needs trusts that can protect the beneficiary if he or she needs long term care. With many of my clients living well into their 90s, their children may be in their 60s and 70s when the parent dies. The may have done their own asset protection planning only to inherit more assets from a parent that are not protected. By creating descendants’ trusts in their documents, this problem can easily be solved.

Nancy Burner, Esq. has practiced elder law and estate planning for 25 years.

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Commack Superintendent Donald James presented the district's 2018-19 budget draft. File photo by Greg Catalano

A state audit cracked down on the Commack Union Free School District, accusing officials of mishandling funds and costing taxpayers.

The audit, which was released Aug. 5, said Commack school administrators needed to do a better job overseeing the budgeting process after the district overestimated expenditures in its adopted budgets and did not use surplus cash to finance operations. The audit also found the district did not maintain a “complete and adequate” record of its fuel inventory to safeguard and account for its fuel.

“From 2011-12 through 2013-14, total actual revenues exceeded expenditures by as much as $3.7 million,” Comptroller Tom DiNapoli said in the audit, and while the district had a $24 million fund balance, it only used $1.8 million to offset taxes. “Had district officials used more realistic budget estimates, they could have avoided the accumulation of excess fund balance and possibly reduced the real property tax levy.”

The report also found that discrepancies in the fuel inventory records were not investigated. According to DiNapoli, Commack’s head groundskeeper performed a monthly reconciliation of district fuel purchase and use records with the actual fuel on hand but never acted on discrepancies, even though anything left unresolved within 48 hours must be reported to the state Department of Environmental Conservation.

In response, Commack Superintendent Donald James said the district had “varying fiscal philosophies” but cited a list of changes it would be implementing moving forward. As for the comptroller’s remarks on Commack’s financial condition, James kept it short and sweet.

“The district will review the expenditure budget areas and the variables affecting such areas discussed in the audit report in depth to assure reasonable estimates are presented,” he said in a statement.

District spokeswoman Brenda Lentsch said the district saves money through strong budgeting practices and all of its savings are returned to the taxpayers the following year.

“We go to great efforts not to spend the money the residents of this community entrust to us,” she said in a statement. “Further, the district returns every dollar not spent in the budget to the taxpayers to keep the tax levy as low as possible, and to continue to offer the multitude of programs and services that Commack is known for, and the community expects.”

On the subject of fuel inventory records, James had a lot more to say.

“The district has taken great care and effort to develop and implement new procedures to ensure that fuel supplies are adequately safeguarded, accounted for and protected against risk of loss or unidentified leakage,” he said in a response outlined within the audit.

Moving forward, James said the district would record, monitor and reconcile its fuel inventory via a senior account clerk and install video surveillance systems to monitor the area of the 2,500-gallon underground fuel tank and pump.

DiNapoli’s audit set out to evaluate the district’s overall financial condition and fuel inventory, specifically between July 1, 2013, and Nov. 30, 2014. The comptroller extended the scope of his audit back to July 1, 2011, however, to provide better perspective and background.

DiNapoli recommended the district develop procedures to ensure it adopts more reasonable budgets — to avoid raising more real property taxes than necessary — and use more of its surplus funds to support future budgets and reduce the burden on taxpayers. He also recommended the district adopt written policies to ensure fuel is periodically measured and to report discrepancies promptly.

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By Linda M. Toga, Esq.

The Facts: I am in my early fifties and in good health but I am concerned about depleting my assets in the event I need to enter a skilled nursing facility. Some of my friends have purchased long-term care insurance and have complained about the cost of their policies.

The Question: Is long-term care insurance a good value?

The Answer: Long-term care insurance can be a good value, but whether it is a good option for you depends on many factors, not the least of which is how much you have to spend on your long-term care and the value of the assets you want to protect.

People between the ages of 55 and 64 account for more than 50 percent of the people who purchase long-term care insurance, and nearly one-fourth of those people purchase the insurance to protect their assets. They are basically buying long-term care insurance to ensure that their assets will pass to their heirs rather than being depleted paying for their care. If you have assets to protect, and have the income to cover the annual premiums, long-term care insurance can be an excellent option for you.

The cost of long-term care insurance is based upon your age when you purchase the policy, the amount of the daily benefit paid by the policy, the term of the coverage, how long you must pay for your care before coverage begins and whether you purchase any riders to the policy such as an inflation rider that effectively increases the daily benefit amount. In order to apply for coverage, you will be required to undergo a physical exam and a mini mental competency test as part of the application process.

The younger you are when you purchase a long-term care insurance policy, the lower your annual premium. For example, a policy with a four-year benefit period that might cost you $2,225 annually if purchased at age 55 will cost over $3,700 annually if purchased at age 65. Although purchasing coverage at age 55 rather than 65 may result in you paying the premium for a longer period of time, when you make a claim, you will likely have paid less for your coverage by buying sooner rather than later.

Using the figures set forth above, if you buy a policy at age 55 and make a claim for benefits at age 85, you will have paid just under $68,000 for coverage. However, if you buy the same policy at age 65 and make a claim at age 85, you will have paid nearly $75,000 for coverage. Clearly, the savings enjoyed by purchasing a policy in your fifties rather than your sixties are significant, as is the peace of mind that comes from knowing your long-term care needs will be met. In addition to saving money, buying a policy when you are younger avoids the risk that you may subsequently develop health issues that preclude you from getting coverage later in life.

Even if you wait until you are 70 to buy long-term care insurance and your health deteriorates somewhat between now and when you purchase a policy, doubling or even tripling the annual premium, the cost of a policy over time will likely be small compared to what you would have to pay to cover your long-term care needs. 

For example, at today’s prices, the average annual cost of a semi-private room in a nursing home on Long Island is at about $155,000. The average stay is three years. That means individuals who do not have insurance or government benefits to cover the cost of long-term care will pay $465,000 over three years for their care. Assuming your long-term care insurance premium is $9,000 and you paid that premium every year until age 85 when you put in a claim for benefits, the total you will have paid for three years of coverage will be $135,000. That’s a $330,000 savings.

Although the examples set forth above do not take into consideration the future value of the money you use to pay your premiums over time, or the case where a person makes a claim after only making one or two annual premium payments, they illustrate why long-term care insurance can be a good value for many people.

Since more than 75 percent of people over the age of 65 will need long-term care at some point in their life, insuring against the risk of depleting savings and not having the assets to pay for care makes sense for many people. Since insurers now offer riders that include money back options and the option of using a death benefit toward long-term care services, even those people who have balked at the idea of buying long-term care insurance because they worry that they may die without making a claim can find a policy that works for them.

Insurance is complicated and everyone’s needs are different. Before buying a long-term care insurance policy, you should discuss your situation with an experienced elder law attorney and a reputable insurance agent with expertise in the area of long-term care insurance. That way you can be sure that the policy you decide upon includes the features that are best suited to your situation.

Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.

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By Jonathan S. Kuttin

Your home can be more than a place to live — it is also one way you can strategically save for retirement. In some circumstances, a home can represent a significant asset. Over time, your home can build equity that may contribute to your long-term financial security. For example, a home with no mortgage or a low mortgage balance may stand out as a valuable asset for those nearing retirement. While you can’t count on it, many retirees downsize and as a result, free up some equity that they can use in retirement.

However, the housing bubble burst in 2007 is a good reminder to be cautious about putting too much emphasis on your home’s value as a retirement asset. Regardless of what’s happening in the housing market, here are three things to think about when considering your home’s impact on your retirement:

You need a home to live in.

Whether it is in your current house or somewhere else, housing will always be an expense for you. If you sell your current home, presume that some or all of the proceeds from the sale will be used to fund your housing expenses throughout retirement. If you spend two to three decades or more in retirement, housing could add up to a significant cost.

Selling your home might not be as easy as you think.

The housing market in many parts of the country has changed over the past decade. Depending on where you live, there may be a surplus of homes on the market. As a result, you might be disappointed in the price you are able to generate when you sell your property. Many people have discovered that their home equity is not as valuable as they might have expected. It’s important to keep a pulse on the housing market in your area to help determine what you may be able to get for your home.

Determining a home’s value can be difficult.

Unlike a stock, bond or mutual fund that can readily be priced in the market and bought or sold daily, a home is a different kind of investment. The value can’t be precisely determined, and it is not considered to be as much of a liquid asset.

Keeping these factors in mind, it’s important to maintain a proper perspective about the value of your home in the context of your overall financial picture. Be careful not to overestimate a home’s contribution to your retirement security based on its current valuation, because those numbers can change. Even if your home is appreciating in value, remain diligent about saving for retirement in other ways, such as through a workplace savings plan or an IRA.

Talk with a financial advisor about your plans for retirement and your home’s potential value to your portfolio. A qualified financial advisor can recommend strategies for generating income in retirement and provide guidance on how to build equity regardless of your home’s potential value at retirement. Then, any funds you generate from your home will be an added retirement bonus.

Jonathan S. Kuttin is a private wealth advisor with Kuttin-Metis Wealth Management, a private advisory practice of Ameriprise Financial Service, Inc. in Melville. He specializes in fee-based financial planning and asset management strategies, and has been in practice for 19 years.

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By Nancy Burner, ESQ.

For most of us, if a time comes when we need assistance, the preferred option would be to remain at home and receive whatever care services we needed in our familiar setting surrounded by family. For many, the Community-Based Long-Term Care Program, commonly referred to as Community Medicaid, makes that an affordable and therefore viable option.

Oftentimes we meet with families who are under the impression that they will not qualify for these services through the Medicaid program due to their income and assets. In most cases, that is not the case. Although an applicant for Community Medicaid must meet the necessary income and assets levels, oftentimes with planning we are able to assist in making an individual eligible with little wait.

An individual who is applying for homecare Medicaid may have no more than $14,850 in nonretirement liquid assets. Retirement assets will not be counted as a resource as long as the applicant is receiving monthly distributions from the account. An irrevocable prepaid burial fund is also permitted as an exempt resource. The primary residence is an exempt asset during the lifetime of the Medicaid recipient. However, when the applicant owns a home, it is advisable to consider additional estate planning to ensure that the home will be protected once the Medicaid recipient passes away. 

Although the home is considered an exempt resource as long as the Medicaid recipient is living in it, once the applicant passes, Medicaid can assert a lien on the home if it passes through the probate estate. One way to avoid this is to ensure that at the time of the death of the applicant no assets pass through the probate estate; this can be achieved by transferring the home to a trust. Once this is done, the home will pass to the intended beneficiaries without a probate proceeding and without an opportunity for Medicaid to seek recovery against the home. 

With respect to income, an applicant for Medicaid is permitted to keep $825 per month in income plus a $20 disregard. However, where the applicant has income that exceeds that $845 threshold, a Pooled Income Trust can be established to preserve the applicant’s excess income and direct it to a fund where it can be used to pay his or her household bills.  It is important to note that there is no “look back” for Community Medicaid. This means that for most people, with minimal planning, both the income and asset requirements can be met with a minimal waiting period allowing families to mitigate the cost of caring for their loved ones at home, in many cases making aging in place an option.   

Individuals looking for coverage for the cost of a home health aide must be able to show that they require assistance with their activities of daily living. Some examples of activities of daily living include dressing, bathing, toileting, ambulating and feeding.

Community Medicaid will not provide care services where the only need is supervisory; therefore, it is important to establish an assistive need with the tasks listed above. Once this need is established, the amount of hours awarded will depend upon the frequency with which assistance with the tasks are necessary. 

For example, an individual who only needs help dressing and bathing may receive minimal coverage during the scheduled times, maybe two hours in the morning and two hours in the evening. Contrast that with an individual who requires assistance with ambulating and toileting. Because these tasks are considered “unscheduled,” the hours awarded will be maximized.

In fact, where the need is established, the Medicaid program can provide care for up to 24 hours per day, seven days per week. Once approved, the individual may be enrolled in a managed long-term care company. The MLTC may also cover adult day health care programs, transportation to and from nonemergency medical appointments and medical supplies such as diapers, pull-ups, chux and durable medical equipment.

The Community-Based Medicaid Program is invaluable for many seniors who wish to age in place but are unable to do so without some level of assistance.

Nancy Burner, Esq. has practiced elder law and estate planning for 25 years.

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