In this Elder Law Minute, Wes Coulson discusses the ways to help single or widowed individuals with their estate planning.
Transcript:
Hi! I’m Wes Coulson from Dent-Coulson Elder Law, proudly serving clients throughout the St. Louis metropolitan area and beyond. I’d like to welcome you to our Elder Law and Estate Planning Minute. We do these to help educate people, give them some little tips, and especially to let them know the questions they need to ask, things that they’ve maybe not thought of. Our thought on that is that we can help you best if you realize the things that you need help and that we can help you with. So I hope you enjoy. Thanks!
This is another in our series of videos that I call Medicaid planning case studies, and this one we are going to focus on how we can help a typical single or widowed client. The planning considerations are different there because we can’t transfer, as in the case of a married couple assets, from one spouse to another. And if assets are given away by someone who then applies for Medicaid, and if that’s done within five years, there is what’s called a “transfer penalty” that’s a delay in eligibility; the more money you’ve given away, the longer the delay. Interestingly enough, though, that’s not necessarily a bad thing and the focus in those cases deals with doing exactly that. Giving assets away causing a transfer penalty, but dealing with it.
Let me give you an example. Let’s say that we have somebody who is in a nursing home that costs $6,000 a month; so, for every $6,000 they give away, they are going to have a month delay in eligibility. They start with $2,000 a month income, say social security or a pension. Well, let’s say they have $100,000 more than the rules allow them to have, so what are the options? Well if they don’t do anything, a typical approach, it’s going to end badly. They’re going to lose everything, they’re going to spend it all paying for the nursing home until they’re broke and then, yes, they’ll be on Medicaid. What if they give away the whole $100,000? Well, that’s also going to be really bad because they are going to be facing a 16 ? months delay in eligibility, with no way of paying for it. But if we do something, in between? What if we have them give away $60,000, that’s going to create a 10 month delay in eligibility, and we use that other $40,000 to increase their income from $2,000 a month to $6,000 a month for those 10 months? And then we file a Medicaid application. Then they say “Well, you’ve made $60,000 in gifts, you are not eligible for the next 10 months”, and we say “That’s okay, we can pay our own way for the next 10 months”.
What I can promise you is a result of that circumstance is that, with the planning, even for a single, or widowed, person, if somebody comes to use for help that we can always protect half, or more, of their remaining life savings. So, is it worth doing? Absolutely, it’s worth doing. So if that’s the situation you’re in, that a loved one, who you are calling on behalf of, is in; call us, because we can definitely help and the help is going to make a big difference.
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.
