Elder Law and Special Needs Law
At Schell Bray, our Elder Law and Special Needs Law practice encompasses many different fields of law providing for the unique legal and financial demands of senior citizens and people with disabilities. Our attorneys assist clients and their families with a variety of legal issues, from estate planning to long term care issues, with a primary emphasis on promoting quality of life for the client. Schell Bray takes a holistic approach to planning to ensure that each client’s plan addresses the legal, medical, financial, and social needs of the client.
For a more specific look at our services, click the headings below:
Medicaid is a government program that can help pay for the cost of long-term care if you or your loved one lives in a nursing home. A similar benefit, called Special Assistance, provides financial assistance to persons living in an assisted living facility.
Medicaid has rules which govern the amount of assets you may own and still receive this benefit. In addition, there can be serious consequences if you give away or transfer any of your property in the five years before you apply for Medicaid benefits.
It is important to meet with an experienced elder law attorney who understands the Medicaid rules before making any changes to your property.
At Schell Bray PLLC, we can help you determine if you will qualify for Medicaid benefits, assist you in preserving your assets (including your home), and prepare the application for Medicaid benefits on your behalf.
The following requirements must be met in order for an individual to qualify for Nursing Home Medicaid in North Carolina:
- At least 65 years of age or disabled.
- Citizen of United States or non-citizen in lawful immigration status.
- Social Security number (provided or applied for).
- Resident of North Carolina (anyone residing in a nursing home or assisted living facility certified for Medicaid is considered a resident of North Carolina).
- Medical need for care.
- Appropriately placed in a Medicaid facility that is able to provide the needed level of care, and actually receiving the needed services.
- Countable assets of less than $2,000.00.
- Spouse’s countable assets of no more than $117,240.00 at time of Medicaid application, unless increased by a judge’s order.
- Under no penalty for transfer of assets.
- Has filed for all other benefits to which applicant may be entitled.
“Patient responsibility” is the amount that the Medicaid recipient pays to the nursing home for each month of Medicaid coverage. It is equal to the recipient’s gross income with the following deductions:
- A “personal needs allowance” of $30.00 each month to pay for any extras not covered by Medicaid.
- Health insurance premium, if recipient is paying the premium.
- If married, an amount for the spouse’s needs, based on the spouse’s monthly income and the Minimum Monthly Maintenance Needs Allowance (MMMNA), up to $2,898.00.
Gross income is the amount of income from the following sources, before deductions (such as the Medicare Part B premium of $104.90 (2013) and the Medicare Part D premium deductions from Social Security, income tax deductions, life or health insurance premiums deductions, etc.):
- Social Security
- Civil Service
- Railroad Retirement
- IRA distributions
- VA pension
- Rental income
- Interest and dividends
The additional allowance for Veterans Administration Aid & Attendance is not included as income (but the VA pension still counts as income).
The Minimum Monthly Maintenance Needs Allowance (MMMNA) may allow the Medicaid recipient to allocate a portion of income to meet the needs of the spouse, depending on the amount of monthly income available to the spouse, plus excess shelter costs of the spouse.
Patient responsibility should be adjusted any time there is a change in income or health insurance premiums.
Income and Medicaid Qualification
Most types of income are included for Medicaid qualification purposes, for example:
- Social Security
- Civil Service
- Pension, including Veterans Administration (VA) pension
- Annuity payments
- Retirement accounts
- Rental income
- Life insurance proceeds
However, there are some limited exclusions from income, including VA allowance for Aid and Attendance or Housebound Allowance.
Assets and Medicaid Qualification
In order to qualify for Medicaid, an applicant can have no more than $2,000.00 worth of countable assets. If married, the applicant’s spouse can have up to an additional $117,240.00 of countable assets, unless increased by a judge’s order. Available assets are counted toward these limits and excluded (or exempt) assets are not, as discussed below.
Available Assets (Counted for Medicaid Qualification)
The following assets are available for Medicaid qualification purposes and counted in the asset limit, whether owned by the applicant or the applicant’s spouse, or owned by either of them jointly with someone else:
- Checking accounts
- Savings accounts
- Brokerage accounts
- Certificates of deposit
- Stocks and bonds
- U.S. savings bonds
- Primary residence if applicant does NOT intend to return home (note that if equity is greater than $543,000.00, then applicant does not qualify for Medicaid)
- Real property, other than primary residence (with certain exceptions)
- Limited partnerships
- Cash value of life insurance if the total face value of all such policies is greater than $10,000.00
- Vehicles other than the one excluded vehicle
- Boats, unless your primary residence
- Recreational vehicles, unless your primary residence or your only vehicle
- Loans payable to applicant
- Deferred annuities and some immediate annuities, depending on how they are structured and the date purchased
- Retirement funds, generally (please contact us for more information)
Excluded Assets (Not Counted for Medicaid Qualification)
The following assets are excluded for Medicaid qualification purposes and not counted in the asset limit:
- Primary residence if equity is less than or equal to $543,000.00 and applicant intends to return home
- Primary residence, regardless of equity, if spouse, child under age 21, or blind or disabled child of any age lives there
- One vehicle
- Life insurance with no cash value
- Life insurance with cash value if the total face value of all such policies is less than or equal to $10,000.00
- Irrevocable burial contracts
- $1,500.00 designated for burial expenses (revocable burial contracts, burial savings accounts, or life insurance policies)
- One burial plot per family member
The Medicaid applicant’s primary residence will be an excluded asset if the applicant is living in the home or intends to return home and the equity in the home is less than or equal to $543,000.00. The home will also be excluded if the applicant’s spouse resides in the home, or if a minor, blind, or disabled child resides in the home. This exclusion only applies if the property served as the recipient’s primary residence prior to nursing home admission.
Home equity is calculated by subtracting any debt, such as a mortgage, from the current market value, which is the tax-assessed value on the property’s tax statement for the most recent year.
Applicants with an equity interest greater than $543,000.00 are not eligible for long term care Medicaid (this is known as the home equity cap). The home equity cap may be waived when denial of benefits would result in demonstrated hardship to the applicant.
Exceptions to the home equity cap apply if any of the following individuals reside in the home:
- The Medicaid recipient’s spouse.
- The Medicaid recipient’s child under age 21 (biological or adopted, without regard to marital status).
- The Medicaid recipient’s blind or disabled child of any age.
If the home is sold during the Medicaid recipient’s lifetime, the proceeds of the sale become an available asset. After the Medicaid recipient’s death, if the home is included in the probate estate, then it will be a probate asset subject to creditor claims, including a claim by North Carolina for reimbursement of Medicaid benefits.
Certain planning strategies may be employed prior to application for Medicaid benefits (and after application for Medicaid benefits in the case of spouses) in order to avoid Medicaid’s claim for recovery against the home after the death of the Medicaid recipient, and to prevent the sale of the home from disqualifying the Medicaid recipient from benefits.
- Special Needs Planning
Special needs and disability planning is a comprehensive approach to assisting individuals with disabilities. Our attorneys will assist you in learning about community resources that may be available to you or your loved one, and developing a detailed care plan as well as a sound financial plan. We will provide you with the legal resources that will help you carry out your estate plan and obtain and preserve public benefits for you or your loved one.
Trusts are a common method for providing for family members with disabilities. The most common types of trusts for this purpose are Support Trusts and Special Needs Trusts.
Support Trusts require the trustee to make distributions for the beneficiary’s support. This includes distributions for food and shelter. Beneficiaries of Support Trusts are not eligible to receive public benefits such as Supplemental Security Income (SSI) or Medicaid until the trust assets are spent. If your loved one is receiving SSI or Medicaid, or may require these benefits in the future, you should avoid using a Support Trust to provide for him or her.
A Special Needs Trust, also called a Supplemental Needs Trust, holds resources for the disabled individual while also maintaining his or her eligibility for public assistance benefits. There are two types of Special Needs Trusts: Third-Party and Self-Settled.
A Third-Party Special Needs Trust is created with assets that do not belong to the disabled individual, such as a parent’s assets or spouse’s assets. Third-Party Special Needs Trusts are typically done as part of an estate plan through a will or living trust. Third-Party Special Needs Trusts do not have to pay back the State after the beneficiary’s death.
A Self-Settled Special Needs Trust is created by a parent, grandparent, or legal guardian using the disabled individual’s own assets to fund the trust. A Self-Settled Special Needs Trust is often used when a disabled individual is awarded a settlement from a personal injury or medical malpractice lawsuit. If there are any assets remaining in the trust after the beneficiary’s death, those assets must first be used to pay back the State for the amount of any public assistance benefits the beneficiary received during life.
A guardianship occurs when the court appoints one person to take care of another person or that person’s property. There are three types of guardianships including Guardian of the Estate, Guardian of the Person, and General Guardian.
A Guardian of the Estate is appointed to manage another person’s property.
A Guardian of the Person is appointed to make decisions with regard to another person’s care.
A General Guardian is appointed to both manage another person’s property and to make decisions with regard to that person’s care.
We encourage all of our clients to sign Durable Powers of Attorney and Health Care Powers of Attorney in which the client selects the person who will take care of the client and his or her property if he or she is unable to do so. With this planning, it is normally not necessary to have a court appointed guardian.
Occasionally we meet with clients whose family members have not signed Durable Powers of Attorney or Health Care Powers of Attorney. If the person suffers from dementia or other incapacity, it may be too late to sign these documents. If that happens, the family must go to court to ask the judge to appoint a guardian. This process can be very confusing and stressful for all involved. The person for whom guardianship is sought has the right to a lawyer as well as a jury trial. The judge may order the person to undergo medical and psychological evaluations. Once a person is appointed as guardian, he or she will be under the constant supervision of the court.
Guardianship can be avoided with proper planning. However, in the event that a guardianship is necessary, our attorneys are here to help.
- Veterans Benefits
Veterans Aid and Attendance Benefit
Veterans and widow(er)s of veterans may be entitled to financial assistance from the VA to help pay for the cost of home health care, assisted living care, and nursing home care.
If you are a veteran or the widow(er) of a veteran, please be sure to let your attorney know so she can determine whether you might be eligible for this additional benefit.
VA Improved Pension
The VA Improved Pension provides financial assistance to qualified veterans and their surviving spouses. This pension is a benefit that veterans earn due to their service to our country, but few have ever heard about it. The VA Improved Pension was established to provide financial assistance to veterans and their spouses, allowing them to live out their lives in dignity and afford basic necessities.
This benefit is not dependent on service related injuries. It helps cover the cost of qualified un-reimbursed medical expenses, including in-home care and assisted living facility care.
Basic Criteria to Qualify:
- Veteran must have served at least 1 day during a qualified war period
- Veteran must have served at least 90 days of active duty
- Veteran received a better than dishonorable discharge
- Claimant (Veteran or Surviving Spouse) age 65 or older or permanently or totally disabled
- Claimant (if not the Veteran) is a surviving spouse of a qualified veteran and did not remarry
- Claimant needs assistance with daily living requirements
- Claimant’s monthly medical expenses equals or exceeds their monthly income
VA Pension Amounts for Veterans and Surviving Spouses Who Qualify
The VA pension can significantly improve the quality of life for veterans and their surviving spouses.
Current Maximum VA Pension Amounts (Effective December 1, 2014):
Single Qualified Veteran:
Basic Improved Pension $1,072/month
Pension with Housebound $1,310/month
Pension with Aid and Attendance $1,788/month
Qualified Veteran with Spouse
Basic Improved Pension $1,404/month
Pension with Housebound $1,642/month
Pension with Aid and Attendance $2,120/month
Surviving Spouse (Death Pension):
Basic Improved Pension $719/month
Pension with Housebound $879/month
Pension with Aid and Attendance $1,149/month
War Periods for Non-Service Connected Pension
04-06-1917 through 11-11-1918, Inclusive
(If in Russia, Ending Date is 04-01-1920)
12-07-1941 through 12-31-1946, Inclusive
(if in Service on 12-31-1946 with Continuous Service Before 07-26-1947 (Acceptable as War Time)
*Merchant Marines 12-07-1941 through 08-15-1945
06-27-1950 through 01-31-1955, Inclusive
02-28-1961 through 05-07-1975, Inclusive For Veterans Who Served in Vietnam During that Period
08-06-1964 through 05-07-1975, Inclusive For All Others
NOTE: Two periods for Vietnam
08-2-1990 through (date to be determined) (No One Knows at this Time, Since the War on Terrorism is Considered a Continuation of the Persian Gulf War)
Advantages of Working with a VA Accredited Attorney
There are many advantages to working with an elder law attorney who is accredited by the VA. These attorneys are qualified in many ways where financial professionals are not. An elder law and accredited VA planning attorney takes a comprehensive approach, ensuring the client is protected. They are trained in managing the complexities associated with qualifying for the VA Improved Pension, while protecting clients from financial hardships in other areas. For example, some opportunities available in VA Pension planning may cause hardships if the client later applies for Medicaid. An experienced elder law attorney who is accredited by the VA will be able to advise the client regarding these potential hardships.
An Accredited VA Planning Attorney
- Is legally obligated to act in the best interest of the client
- Must be knowledgeable of current IRS rules and regulations and how IRAs can be problem assets
- Must be knowledgeable of trust laws
- Must be knowledgeable of income, estate and gift tax implications for transferring assets
- Can prepare real estate documents
- Can prepare a Medicaid compliant caregiver agreement
- Does not look to make commission on sales of products to veterans; but looks for long-term clients that they can assist throughout their lives