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By John M. Bigler This month I will take a break from our normal monthly articles on a particular subject and attempt to answer some of the questions about elder law I'm most frequently asked.
This is one of the most difficult question to answer because sometimes young adults or even children may fall prey to diseases or disabilities. Normally, a person seeks Elder Law advice when they reach their late sixties and early seventies. However, this is very much an individual decision. In my practice I have had clients who started to inquire about nursing homes and catastrophic illnesses at too early an age. I've had to caution these clients not to start transferring their assets when they are still relatively young and healthy. On the other hand, I've had clients who are in their late eighties and early nineties who have never given any thought to any type of planning. As I have attempted to demonstrate in previous articles, the failure to take any action can severely impact on the ability to preserve assets. 2) What is the difference between Power of Attorney, Health Care Proxy and Living Will? All three of these documents are referred to as "Advance Directives." Health care proxies and living wills are advance directives for health-care decision-making. A durable power of attorney (DPOA) is an advance directive for financial decision-making in which you, the principal, appoint an agent or attorney-in-fact, to make financial decisions for you. Advance directives are important documents that allow us to plan ahead in case we lose the ability to make our own decisions. If you become incapacitated or incompetent, and you cant make your own decisions and you haven't signed advance directives, someone may have to petition a court for a guardianship so others can make health care and financial decisions for you. 3) If I make an annual gift of $10,000, will it affect my Medicaid eligibility? There is a common misconception that since annual gifts of $10,000 do not result in any gift tax consequence there will also not be Medicaid penalty consequences. This is not true since Medicaid law and gift tax law are not related. Although a gift to four different children of $10,000 each will result in no gift tax consequences, that same gift will cause a person to be ineligible for 5.89 months in a nursing home on Long Island ($40,0000 divided by the average monthly cost of a nursing home of $6,790). 4) Is it true that I will be ineligible for Medicaid for 36 months any time I transfer money out of my name? First of all do not confuse the 36-month look-back period with the penalty period. The penalty period is an imposition from Medicaid for the transferring of assets. The penalty period will be based on the amount of assets transferred during the 36-month look-back period as well as the type of medical assistance being sought and to who or what the asset has been transferred. The 36-month look-back period is simply the length of time that Medicaid looks at in order to evaluate your Medicaid application. 5) Why is it that sometimes there is a 36-month look-back period and sometimes a 60-month look-back period? The transferring of assets to another individual triggers a Medicaid look-back period of 36 months. However, if there has been a transfer into or out of a trust, be it a revocable or irrevocable trust, then Medicaid has the right to ask about any transfer in the last 60 months instead of the last 36 months. An applicant must be careful in either case not to apply during the look-back period if the penalty period will be longer than the look-back period. In such a case an applicant can limit the penalty to the look back period by simply waiting 36 or 60 months to apply. Reprinted with permission of the Suffolk Times © 1999 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
1) At what age should I consider Elder Law planning?