Do you ever feel like you don’t know how to help a client? That the traditional planning strategies just won’t work in the situation presented? Here is a common scenario:
Jane, a widow who lives in an assisted living facility, has two adult children who are independent with no disabilities. When Jane’s husband, David, died two years ago, Jane gave each of her children $100,000 without consulting a lawyer. At that time, Jane was living at home and doing well. About six months after David died, Jane began experiencing a series of mini-strokes. The cost of her care is depleting her resources rapidly. The children really want to avoid putting her in a nursing home but are concerned she will need one soon. During your meeting, you naturally raise the possibility of a transfer of assets penalty due to the prior transfers.
If you are like many elder care attorneys, you will likely try to find ways for the remaining funds to stretch out during the penalty period. You may even propose that the children return the gifts if possible. It is not possible.
Is there anything you are overlooking? Maybe a dormant asset you can utilize?
There may be. Have you asked your client if she has life insurance?
Term life, universal life, and whole life insurance policies can be sold to pay for care. In Jane’s case, she has a $300,000 policy. She was considering letting it lapse because she can no longer afford the annual premiums. Instead of letting it lapse, let it work for her to pay for care during the Medicaid look-back period. Assuming a company purchases the policy for 40% of its face value, Jane would then have a fund of $120,000, or $3,333 per month for 36 months, to pay for care during the remaining five-year look-back. Jane’s income, added to these additional funds, will be sufficient to cover the cost of the assisted living facility for three years. At that time, the family can feel comfortable and confident about transitioning Jane into a nursing home and applying for Medicaid, if necessary.
Lawyers with Purpose is proud to announce that we have teamed up with Life Care Funding to assist lawyers and clients in identifying good situations to fund care!
To learn a little more about Life Care Funding for yourself, your team and your clients click here. If you have clients that could benefit from converting a life insurance policy into a long term care benefit click here for the Long Term Care Benefit Qualification Form. Or to learn more this new planning option for seniors, go to www.LifeCareFunding.com. Never hesitate to contact Life Care Funding directly at 888-670-7773 or email info@lifecarefunding.com.
Chris Orestis, CEO, will be sharing more information at the Lawyers with Purpose Tri-Annual Retreat, October 21-23, in Phoenix, Arizona. If you haven't registered yet – we are reaching capacity! Register today before pricing goes up and all seats are filled.
Victoria L. Collier, Co-Founder, Lawyers with Purpose, LLC, www.LawyersWithPurpose.com; Certified Elder Law Attorney through the National Elder Law Foundation; Fellow of the National Academy of Elder Law Attorneys; Founder and Managing Attorney of The Elder & Disability Law Firm of Victoria L. Collier, PC, www.ElderLawGeorgia.com; Co-Founder of Veterans Advocates Group of America; Entrepreneur; Author; and nationally renowned Presenter.
Add a Comment