Elder law addresses more than wills

NAELA is a professional association of lawyers dedicated to improving the quality of legal services to the elderly, through education and specialized materials for its members.

Elder law attorneys handle a wide range of issues, including estate planning, planning for incapacity with health care and financial decision-making documents, guardianships and conservatorships.

The elder law attorney also assists clients in planning for possible long-term care needs, including at-home care, assisted living or nursing home care.

Attorneys must constantly monitor the ever-changing state and federal statutes and regulations that affect the daily existence of the elderly and disabled.

When clients visit an elder law attorney, they generally present problems beyond the need for a will or power of attorney. One issue of primary concern is how to plan for and pay for long-term care needs.

There is a very real and growing crisis in long-term care planning for America’s aging population.

Life expectancy has soared. Today’s seniors never expected to live into their 80s, 90s or beyond.

Many have failed to plan for an extended period of frailty during which they may need more help than family members can provide.

Seniors who already are saddled with the high costs of medical care, housing, utilities and spiraling gasoline prices have little left over to save for their future long-term care needs.

Few have long-term care insurance. With the cost of nursing home care averaging $3,000 to $5,000 per month, many seniors will need to apply for state Medicaid long-term care benefits at some point in the future.

However, recently enacted federal legislation may make qualifying for Medicaid benefits more difficult than ever.

On Feb. 8, President Bush signed into law the Deficit Reduction Act of 2005. Among other things, this act makes the most sweeping changes to Medicaid since 1993, including expanding the “look-back” period for transfers of assets made by Medicaid applicants prior to applying for benefits.

Under prior law, the look-back period was 36 months for most transfers, but 60 months for transfers to or from a trust.

The DRA changes the look-back period to 60 months for all nonexempt transfers. Nonexempt transfers will cause the applicant to incur a penalty (i.e., a delay in receiving benefits) based on the value of the asset transferred. The start date for any penalty period was delayed by the new law from the “date of the transfer of the asset” to the “date the applicant is otherwise entitled to receive Medicaid, but for the penalty.”

This new law could have devastating financial consequences to future Medicaid applicants who make contributions or give gifts of assets to churches, charities or family members.

If the transfer does not qualify as one of a very few “exempt” transfers, the applicant may be ineligible for Medicaid long-term care services for up to five years beyond the date the applicant would have qualified for benefits if the transfer had not been made. The practical result may be that Medicaid applicants could be forced to sell or mortgage exempt assets, such as the personal residence, or rely on other family members to finance the applicant’s long-term care during the penalty period. The real impact of the DRA on the lives of aged Americans will become abundantly clear in the months and years to come.

Good long-term care planning is essential for everyone today, not just the elderly. The first baby boomers are turning 60 this year.

Medicaid and Medicare regulations are complex areas of the law that change frequently.

Rather than listening to well-intentioned friends or family members, whose advice may not be based on current or even correct law, seniors and their families should seek competent advice from knowledgeable practitioners whose practices focus on these issues.

Lois M. Zerrer is the founder of Zerrer Law Office LLC. Dianne Hansen is an attorney working as Of Counsel with the firm. Both are members of the National Association of Elder Law Attorneys. They can be reached at lzerrer@ozarkselderlaw.com and dhansen@ozarkselderlaw.com.