When it comes to paying for care there are only three sources of funding: (1) your personal income and assets; (2) a privately owned long term care insurance policy/investment product, and (3) government benefits, namely Arizona Long Term Care System (ALTCS) and Veteran’s Aid and Attendance Pension. Note, Medicare does not pay for long term care expenses so the cost is on you, or other public benefit programs. What if you cannot afford to self-pay? Whether you are in immediate need of long term care, or just concerned about potential future costs there are planning strategies available to protect your personal assets if you cannot afford to self-pay. In general, the earlier you plan the more potential for asset savings.  So, what do you do if you or a loved one needs or may need long term care, but are afraid of losing all your hard-earned assets?

Step One:  Determine whether you can afford to self-pay, or would benefit from government benefits?  To do this, you need to meet with an experienced elder law attorney to discuss your concerns, goals and objectives, potential long term care expenses, and review your estate plan, income, and assets in detail. Often, the estate plan needs to be updated and include language that contemplates current or future long term care planning strategies. We will also strategize with your financial advisor(s) to help you determine whether self-pay or government benefits is the best approach. You should have peace of mind knowing there is a plan in place to both meet and pay for your long term care, should the need arise. The elder law attorney can explain all the options available to minimize those sleepless nights and extra stress among the family, and make sure the legal documents needed are in effect to help you and those who care about you take care of your needs.

Step Two: If government benefits makes sense for you, now or later, you should have a basic understanding of those programs and what action steps you can take to qualify, when needed. That may mean advance planning or crisis planning, whichever circumstance occurs. Our blog article from May 4 (https://www.bivenslaw.com/elder-law-arizona/frequently-asked-questions-about-arizona-long-term-care-system-altcs/) provides a general overview of the Arizona Long Term Care System (“ALTCS”)  and how to qualify for benefits.  We also have detailed information on our website about the benefits and eligibility criteria for the VA Aid & Attendance Pension program for qualifying Veterans or their widows.  In some instances, one or both programs will be the answer. Each person’s circumstance is unique. You need to, again, talk with an experienced elder law attorney to identify and implement the best asset protection strategies for your situation; asset protection planning to achieve government benefits is complex and some tactics can result in a period of disqualification.

With advance planning, there are a myriad of options to achieve asset protection. For example, use of Medicaid (ALTCS) look-back and transfer penalty rules to your advantage might make sense. In those instances, use of and funding an irrevocable trust might make sense. In other cases, for a married couple with a certain value of liquid assets, advance long term care planning might occur with use of a home funded to a revocable trust also typically used for probate avoidance. For others, it might mean simply updating the estate plan to include authority for spend-down later to achieve public benefits eligibility when needed (i.e., crisis planning). We might also recommended use of beneficiary deed(s) to avoid Medicaid estate recovery or TEFRA liens, and/or the purchase of certain exempt assets in advance, such as pre-paid funeral/burial policies or other desired exempt assets.

What if you did not plan in advance? There are still options and help out there! When someone is in current need of long term care, it is often referred to as crisis planning. There are a number of planning tactics available, depending upon the individual’s marital status, income, and assets, if the individual has excess assets to automatically qualify for public benefits such as (1) paying off debt, (2) purchasing exempt assets (warning: do not purchase an annuity for asset protection purposes without proper legal advice from experienced elder law attorney as it may result in a penalty period if not structured or timed properly), (3) making calculated and legally authorized gifts/transfers of assets (note, there are penalty rules for certain gifts so no one should ever make a gift without proper legal advice), or (4) other options (depending upon the assets owned). These strategies may be used alone, or combination.  Once the care need occurs, proper asset protection planning is even more critical to preserve wealth, maximize the value of public benefits, seamlessly transition from private-pay to public benefits, and receive the quality of care everyone deserves.

Step Three: Implement the Action Steps identified with the help of an experienced elder law attorney, when appropriate. Again, an experienced elder law attorney will walk you through each step of the process by preparing any necessary legal documents, giving you instructions on how-to and when to re-position assets to achieve financial eligibility criteria, and provide advice on how-to obtain the best medical documentation to demonstrate medical eligibility criteria.  There is no such thing as a “simple” case; dealing with the government is never simple.  Applying for public benefits is complex, and the timing of certain actions may be critical to achieving best outcome.   

If you would like to discuss your long term care planning options, and whether ALTCS and/or VA Aid & Attendance Pension may be of benefit to you now or later, contact our experienced attorneys at Bivens & Associates, PLLC. We have helped thousands of families, just like yours.

-Stephanie A. Bivens, Esq.This blog is designed to provide general information only, and not intended to provide specific legal advice or constitute an attorney/client relationship with the reader.  You must seek advice of experienced elder law attorney specific to your personal circumstance.