MEDICAID, MEDICARE, VETERANS BENEFITS, AND ESTATE PLANNING: HOW TO DEVELOP A PEACE OF MIND IN UNCERTAIN TIMES

P. Haans Mulder, JD, MST, CFP®

Cunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) 392-1821phmulder@holland-law.com

Alzheimer's Association-West Michigan

Background• Partner at Cunningham Dalman, P.C.• Masters in Tax, CFP®, and specialize in

estates/elder law and business planning• Cunningham Dalman, P.C. has been

serving the greater Holland/Zeeland since 1900

Serving the Holland area since 1900

Overview• Medicaid process and eligibility rules• Example of how Medicaid planning works• Medicare Parts A-D• Transition from Medicare to Medicaid

Serving the Holland area since 1900

Overview• Veteran’s Aid & Attendance benefit and

eligibility rules• Elements of an estate plan and what the

process involves• Most common types of estate plans

Serving the Holland area since 1900

Did you know?• 40% of people 65 years and older will

stay in a nursing home• Average cost to stay in a local nursing

home is $6,500-7,500/month

 

Serving the Holland area since 1900

What is Medicaid?• State and federal program that pays

for medical treatment (including nursing home care)

• Oftentimes confused with Medicare

 

Serving the Holland area since 1900

When does Medicaid apply?• Applies principally in a nursing home

(could apply in your home or an assisted living facility)

• Applies to people who are 65 years or older, blind, or disabled

• Must pass the income and asset tests

Serving the Holland area since 1900

Who does Medicaid apply to?

• Under income test, you cannot have enough income to pay the monthly cost of staying in a nursing home ($6,500-7,500 in this area)

Serving the Holland area since 1900

Who does Medicaid apply to?

• Under assets test, a single person can only have $2,000 in countable assets

• Can keep your home (if it’s not in your trust) and a vehicle

• All other assets are countable

Serving the Holland area since 1900

Who does Medicaid apply to?

• Asset test allows a married couple to keep their home (again, if it’s not in a trust), a vehicle, and one-half of their other assets

Serving the Holland area since 1900

Example• Clients were husband and wife• Wife had to go to a nursing home• Didn’t stay in a hospital for three days

so Medicare didn’t cover stay• Had house, vehicle, and investments

Serving the Holland area since 1900

Example• Could keep the house (because it was

properly owned) and their vehicle• Without any Medicaid planning, they

would have had to spend down one-half of their investments

Serving the Holland area since 1900

Example• Drafted a trust that allowed them to

protect all of their investments (as opposed to just half)

• This provided peace of mind to the husband

Serving the Holland area since 1900

Medicare and Parts A-D• Medicare is a government insurance

program that has many aspects and is divided into parts

• Have to be 65 years old, be disabled, or fit specific criteria

• Part A covers hospital expenses

Serving the Holland area since 1900

Medicare Parts A-D• Part B deals with doctor’s and out-

patient expenses• Part C is a private insurance plan that

covers your medical expense in general• Part D is your prescription drug coverage

Serving the Holland area since 1900

Transition to Medicaid• Many people who are eventually

approved for Medicaid start on Medicare• Must have a three day hospital stay • Medicare will cover up to 100 days, but

there can be a co-pay after the 20th day

Serving the Holland area since 1900

Veteran’s A&A Benefit• Veteran is eligible for up to $1,632 per

month (expenses must exceed income)• Surviving spouse is eligible for up to

$1,055 per month • Veteran with a spouse is eligible for up to

$1,949 per month

Serving the Holland area since 1900

Veteran’s A&A Benefit• Will cover in-home, assisted living, and

nursing home care• Financial eligibility is based in general on

$40,000 of countable assets for a single person and $80,000 for a couple

Serving the Holland area since 1900

Did you know?• You could save approximately $6,000

by having an estate plan that will cost you $850

 

Serving the Holland area since 1900

What is estate planning?• Process of planning for the future

management and distribution of your assets and your future medical care

• Includes documents such as wills, trusts, and powers of attorney

Why is it important?• Reduces the cost of administration• Minimizes stress for family and friends• Determines who will receive your assets• Authorizes who will make your medical

decisions

What is probate?• Probate is a court process to administer

a deceased person’s financial affairs• Required when someone passes away

with assets in his or her own name or fails to name a beneficiary

Why avoid probate?• It is a public process • Can exacerbate family situations• Can be costly to administer ($5,000)• Takes time to complete (6-9 months)

What are the most common estate plans?

• Basic plan includes wills (potentially with a trust) and powers of attorney

• For clients who do not have a house or are not concerned with avoiding probate

What are the most common estate plans?

• More comprehensive plan includes a living trust, pour-over wills, and powers of attorney

• Designed for clients who want to avoid probate

What does the estate planning process look like?

• Complete estate planning questionnaire• Attend a meeting that we discuss your

goals and the types of estate plans

What does the estate planning process look like?

• Review draft of documents• Attend a signing conference• Change beneficiaries or/and fund your

trust

Questions……

Serving the Holland area since 1900

Thank YouP. Haans MulderCunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) 392-1821phmulder@holland-law.comwww.holland-law.com

Serving the Holland area since 1900