Understanding Elder Law

photo of older man working on laptop talking about elder law with woman in backgroundElder Law is an area of law that deals with a wide range of issues affecting seniors, persons with disabilities, and their families, such as issues related to health care, long term care planning, guardianship, retirement, Social Security, Medicare/Medicaid, and other important matters.

If you or your loved one is disabled, incapacitated or diagnosed with a disability for Medicaid planning and special needs trust planning, the Judy-Ann Smith Law Firm, P.A. can help you.

Medicaid Planning

The Institutional Care Program is a state/federal program that pays most nursing home costs for people who meet the eligibility requirements. In determining whether a single individual will qualify for Medicaid in Florida the following criteria must be met:

  • At least 65 years of age or disabled
  • Citizen or permanent resident
  • Resident of Florida
  • Must meet the level of care that only a nursing home can provide
  • Monthly gross income under $2,199.00
  • Assets of less than $2,000.00 for at least one day of each month of Medicaid eligibility.

There are certain assets that are exempt from consideration and can be kept when applying for Medicaid. These include:

  • Homestead residence ($552,000 maximum)
  • Automobile
  • Whole life insurance with a cash surrender value of less than $2,500
  • Prepaid funeral plans

If assets are transferred during the five years prior to applying for Medicaid, otherwise known as the “lookback” period, an ineligibility period may be assessed and Medicaid benefits denied. The ineligibility period will begin when the individual would be otherwise eligible for Medicaid. That is why, a careful and full analysis should be done by an elder law attorney prior to any transfers being made.
Planning ahead by consulting with an elder law attorney will help preserve assets should placement in a skilled nursing facility become necessary. However, even when prior planning was not done, an elder law attorney may still be able to help preserve assets and avoid costly mistakes.

Special Needs Trusts

A special needs trust (or supplemental needs trust) is an important legal tool which holds assets to care for and protect the elderly and persons with disabilities while allowing them to continue to receive their government benefits. The trust is intended to supplement, but not replace, public benefits the trust beneficiary receives. Funds placed into a special needs trust will not subject the individual to any ineligibility periods for benefits and will not reduce benefits the individual receives from government programs.

Types of Special Needs Trusts

Self-Settled or First-Party trusts are funded with assets owned by the disabled beneficiary, or to which the disabled beneficiary is already legally entitled, such as litigation/settlement proceeds, an inheritance or a gift. This type of special needs trust is created pursuant to federal law and certain criteria must be met:

  • This trust is for the sole benefit of the disabled beneficiary.
  • The disabled beneficiary must meet the definition of disabled as defined by the social security act.
  • The disabled beneficiary must be under 65 years old
  • The trust must be irrevocable
  • The trust must be established by either a parent, grandparent, guardian or court
  • The trust must be funded with the disabled beneficiary own funds
  • The trust must contain a “payback” provision [a payback provision means that the trustee upon termination of the special needs trust must “payback” or reimburse the state Medicaid agency the amount paid out on the disabled beneficiary’s behalf].

Third-Party trusts are funded with assets of a person other than the beneficiary. Typically, these trusts may be created when parents, grandparents or other relatives would like to leave assets upon their death for the benefit of the disabled beneficiary without jeopardizing their eligibility for public benefits. There are no age restrictions with these types of trusts and the beneficiary may be over age 65.