The Huffington Post published a worthwhile article on the ethical and legal issues posed by two related legal practice areas, “Some Legal Issues at the Intersection of Elder Law and Estate Planning.” There are certainly legal and ethical issues that arise when determining courses of action in both areas.
One is whether to dispose of assets through pre-need planning to qualify for means-tested government programs such as Medicaid that might pay, for example, the cost of long term nursing home care. This is very complicated, and you should work with a qualified elder law attorney.
If you want to maximize eligibility for means-tested governmental benefits, a common technique is to transfer assets to an irrevocable grantor trust. There are also other types of "special needs trusts" that can be created without reducing government benefits. Again, this is a highly complex area that requires help from an elder law attorney.
Remember the five-year look-back on transfers. Medicaid eligibility usually examines the transfer of assets (like gifts) to third parties that happen in the 60 months prior to the Medicaid application. There are exceptions, however. A child who lived in the parent's home and cared for the parent—and delaying institutional care in a physician's opinion—may be able to get assets as a gift without a Medicaid penalty under the "two-year caretaker rule." This is also extremely complex and requires consultation with an experienced elder law attorney.
For your family and yourself, do as much elder law and estate planning as far in advance as possible. For more information, explore our website and contact us to schedule a consultation today!
Reference: Huffington Post (September 22, 2015) “Some Legal Issues at the Intersection of Elder Law and Estate Planning”