PBM
Patricia Bloom-McDonald • Feb 02, 2018

Top 5 Reasons to Use a Lawyer for MassHealth

Medicaid is called “MassHealth” in the Commonwealth of Massachusetts.  While it is a federal program, each state administers it and passes its own administrative rules and regulations to assist in the administration of the federal benefit program.  Massachusetts sponsors this medical assistance benefit program for state residents that can be utilized by those aged 65 and older needing long term nursing care. because the cost of nursing care is astronomical. Some estimates put the figure at $90,000 to $120,000 per year, an amount that few of us can afford independently.

Many of us feel that we will be able to live on our own as we age, but no one can predict the onset of dementia or of other age-related conditions that can severely restrict our mobility or lead to a loss of cognitive abilities that impact our independence. Unless you have a strong and committed family support system that can provide for you in your own home or theirs, you may likely need long term care in a nursing facility as you age. According to the Family Caregiver Alliance, the lifetime probability of becoming disabled in at least 2 activities of daily living or of being cognitively impaired is 68% once you reach the age of 65.

For Massachusetts residents, they may be able to look for help from MassHealth. However, this program has strict guidelines for eligibility. If you do not receive professional advice on how to qualify for this critical program, you may experience significant delays and lose valuable assets that could have been preserved with proper estate planning. For these reasons, it is essential that you consult with and retain an experienced Elder Law and Estate Planning Attorney.

If you are still not convinced, here are 5 reasons to use a lawyer for Elder Law and Estate Planning:

  1. 1.  Knowledge and Experience . There are specialists in many areas of our lives that we depend on for our health, finances, and other needs. For example, we rely on trained physicians to take care of our health needs and financial advisers to take care of our investments. If a loved one is in trouble with the law, a skilled defense lawyer is a priority. Similarly, you want an elder law lawyer who has years of experience consulting and planning for elders seeking long-term care benefits. Much of this advice pertains to estate planning on preserving assets for your heirs and how to avoid having them seized or used to pay for nursing home care. There are numerous ways that you can achieve this by planning ahead and by taking the proper steps.

For instance, did you know that MassHealth criteria requires that if you are over 65, your countable assets cannot exceed $2,000, or that as a couple your total assets may not be more than $120,900 as of 2017? Also, MassHealth uses a 5-year look-back period whereby the Commonwealth will review all your financial transactions over this period. If for instance, you sold your house to your adult child or even to a trust for less than market value, you risk losing eligibility of MassHealth. There are, however, other ways to sell your home to reduce your assets without consequence and to convert certain assets you have into exempt ones so that you qualify for MassHealth.

  1. 2.  Personal Advocacy . If concerned about legal fees, some individuals will instead of going to lawyer rely on the nursing home staff to advise them on how to complete a Medicaid application or how they can qualify for Medicaid or MassHealth. While it is your goal to protect and preserve your assets, the nursing home is primarily interested in getting funds for its facility, you may want to consider an Elder Law lawyer whose ethical duty and obligations are to solely look out for your best interests.
  2. 3.  Costs and Legal Fees Considerations. If you rely on a non-legal professional or attorney who does not concentrate in elder law, then you may risk delays in eligibility and loss of assets to pay for care. When you consider that you could lose one or more years of MassHealth benefits from receiving inadequate advice at a cost of over $10,000 per month, then the legal fees you will incur are a bargain. So, you can either pay now and at a reasonable fee with the planning advice and drafting of legal documents you need now, or pay later and possibly lose your home and savings. Also, most elder law lawyers will provide you a low or no-cost initial consultation to determine your needs and what steps can be taken to protect your assets before you decide if you will accept their legal assistance.
  3. 4.  Insurance . If you use a non-professional who gives you the wrong advice, then you have little recourse to being compensated for your damages since this individual may not have professional liability insurance.
  4. 5.  By using the services of a skilled and knowledgeable elder law lawyer, you will have the assurance that you have received the best possible advice. For instance, you may be advised that your eligibility will be delayed or that you are risking loss of valuable assets unless you take certain measures such as creating a trust, gifting, and converting certain assets so as to exempt them and not be considered as part of your estate for MassHealth eligibility purposes.

Meet With Elder Law and Estate Planning Attorney Patricia Bloom-McDonald

As an estate planning lawyer for the elderly and Elder Law lawyer, Attorney Bloom-McDonald has been representing and advocating for seniors for decades. If you will be requiring nursing home care for yourself or a loved one, or must have financial assistance to acquire help with areas of daily living in your home, call Attorney Bloom-McDonald for the advice and assistance to put you on the right path.

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Using a Credit Card When You Have a Special Needs Trust

25 May, 2023
A special needs trust (SNT) allows you to meet your needs while receiving government benefits, such as Medicaid/MassHealth and Supplemental Security Income (SSI). When you have a special needs trust, you can use it to pay for goods and services government benefits do not cover, such as therapy, education,and housing. Since receiving income directly from your trust would jeopardize your eligibility for benefits, your trustee cannot give you cash from your SNT. When you use a credit card for permitted transactions, and your trustee pays off the balance with funds from your trust, these payments to a credit card company are not considered income. An SSI or Medicaid/MassHealth recipient who is capable of managing their own affairs can therefore use a credit card to make small purchases, and the trustee of the special needs trust need not micromanage every transaction. In the past, beneficiaries of SNTs sent their bills to their trustees for payment. Today, an individual with an SNT who qualifies for a personal credit card may find that using a credit card is more convenient. Credit cards have several benefits. Using a credit card to manage payments from your special needs trust allows you to maintain independence, gain access to some of the advantages of a credit card, and easily keep records while preserving your eligibility for Medicaid/MassHealth and SSI. Although credit cards can help people manage their special needs trusts, there are also several important restrictions and considerations to keep in mind. Consult with a special needs planner to ensure all transactions are acceptable under the trust's rules and comply with government regulations. The Benefits of Using Credit Cards When You Have a Special Needs Trust If you have a special needs trust, using a credit card has many benefits, including: Independence : Allowing you to maintain your independence. You can use your card to make qualifying purchases yourself. Your trustee does not have to make the transactions for you. Access to the Typical Advantages of a Credit Card : Using it responsibly can help you establish or build credit history, which may be important for your future financial needs. Record-Keeping : Credit cards provide easy record-keeping and a convenient way to monitor transactions from your special needs trust, which can also help special needs trustees fulfill their duty to maintain records. When you use your card, your trustee can observe your purchases and ensure that all expenses are allowable under the trust’s rules. Your statements can help your trustee keep track of funds leaving the trust. Benefits Eligibility : While adhering to Medicaid/MassHealth and SSI’s income and asset limits, you can access funds from your SNT. Credit cards can help prevent your trustee from accidentally providing you with cash payments that could affect your eligibility for government benefits. Considerations When Using a Credit Card for Your Special Needs Trust While you can use a credit card to access funds from your special needs trust for certain transactions , restrictions apply. If your trustee sees a charge on your card that could affect your benefits eligibility , they can flag it for review. You cannot use your credit card to pay for food and shelter, which SSI would cover. When administering your funds, your trustee must ensure that any expenditures are for your sole benefit if you have a first-party special needs trust. While using a credit card is appropriate, you should not use a debit card. Debit cards are considered cash income. Best Practices When using a credit card for a special needs trust fund, remember several best practices. Choose a card with low fees and interest rates. Set a clear budget and monitor transactions regularly. Keep thorough records and receipts of expenses. Consult with your special needs planning attorney. A special needs planning attorney can help you navigate the rules that apply to your trust and understand how to use a credit card to preserve your Medicaid/MassHealth and SSI eligibility. 

How an ILIT can help offset estate taxes

12 May, 2023
With the Federal estate tax exemption possibly about to be lowered, it may be time to think about steps you can take to keep your estate from being taxed. An irrevocable life insurance trust allows you to pass on money to your heirs while avoiding both the federal estate tax, as well as any applicable state estate tax which is currently $1 million in the Commonwealth of Massachusetts. Senate Democrats have proposed lowering the current estate tax exemption from $11.7 million for individuals and $23.4 million for couples to $3.5 million for individuals and $7 million for couples. While it is unclear if this proposal will pass, it is likely that some change to the estate tax is coming. Even if Congress does not take any action, the current rate will sunset in 2026 and essentially be cut in half, to about $6 million per individual. In the Commonwealth of Massachusetts, the current estate tax exemption is $1 million for individuals and is taxed at dollar $1.00. A proposal to raise it to $3 Million and the tax to start at $3 Million (not at $1.00) has been submitted in the legislature but has not yet been voted on or enacted. One way to make up for any estate tax your estate may have to pay is by setting up an irrevocable life insurance trust [ILIT]and funding it with a policy that has a death benefit that would pay your heirs some or all of the amount your estate will be taxed. If you purchased such a life insurance policy directly, it could end up being taxed as part of your estate. But if a trust owned the policy, it could pass outside your estate. While a life insurance trust can be highly beneficial, it is also complicated to set up and maintain properly. The following are some of the requirements: Trustee . If you are setting up the trust, you cannot also serve as a trustee. If you are the trustee, you have control of the trust, which could lead to the trust being included in your estate. You will need to name another trusted person or financial institution to act as trustee. Policy ownership . The trust must own the life insurance policy. If you transfer an existing policy to the trust and die within three years, the policy will still be considered a part of your estate. To avoid this risk, the trust can purchase a policy directly rather than receive an existing policy. Premiums . You need to transfer funds to the trust to pay the policy premiums, which creates an issue with gift taxes. A transfer to a trust is usually not subject to the $15,000 yearly gift tax exclusion. For a gift to qualify for the exclusion, the recipient must have a "present interest" in the money. Because a promise to give someone money later does not count as a present interest, most gifts to trusts aren't excluded from the gift tax. To avoid this, you can use something called a “Crummey” power which gives beneficiaries the right to withdraw the funds transferred to the trust for up to 30 days. As part of the process, the trustee needs to send them a letter, known as a Crummey letter, letting them know about the trust funding and their right to withdraw the funds. After the 30 days have passed, the trustee can use the funds to pay the annual insurance premium. You run the risk of the beneficiaries withdrawing the funds, but if they know that by allowing the money to stay in the trust they will receive more money later, it shouldn’t be a problem. Beneficiaries . The beneficiary of the life insurance policy is usually the trust. Once the funds are deposited in the trust, the trustee can distribute the assets to the beneficiaries in the way specified by the trust. For example, if your beneficiaries are minors, you can wait to have the trustee distribute the assets. Keeping the assets in the trust will also protect them from your beneficiaries’ creditors. The downside of an irrevocable life insurance trust is that you do not have the ability to change it once it is set up, although the policy would effectively be canceled if you stopped paying the premiums. If you are considering this type of trust, discuss it with your attorney.
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