Elder Law is an aspect of Estate Planning focusing primarily on the needs of families and individuals as they age. A Certified Texas Elder Law Attorney can help clients plan and qualify for VA Pension to help offset the cost of Assisted Living services and Nursing Home Medicaid benefits if long-term nursing care is needed. Other Elder Law needs may include Advance Directives, Guardianship, Special Needs Law and Trust Planning.
The Long-Term Care Dilemma
As our population ages, more and more of us confront Elder Law-related issues, whether for ourselves or our loved ones. One of the most pressing issues is finding and paying for quality long-term care, which is not covered by traditional Medicare or Medicare Advantage Plans.
In 2023, the average cost in Dallas, Texas for a private room in a skilled nursing facility was $115,007. The average length of stay is slightly more than two years. The cost of Assisted Living and Memory Care is close to, and sometimes exceeds, that cost. Most people end up paying for nursing home care with private funds until their personal (or family) assets are depleted, then they may qualify for Medicaid to pick up the cost.
Paying for Long-term Care
The US Administration on Aging has found that someone celebrating their 65th birthday today has almost a 70% chance of needing some type of long-term care services and support in their remaining years.
According to Genworth Financial’s Survey of Long-Term Care Costs, in the Dallas area, the average cost of a private room in a nursing home is over $100,000 per year. Assisted Living and Memory Care can range from basic care at $54,000 per year to specialized memory care at $120,000 per year. In-home care can be more affordable, but it is often supplemented by family caregivers who take time away from work or have to leave the workforce altogether. In-home care averages $25.50 per hour in the Dallas area, with a four hour minimum per day. The average annual cost in Dallas, Texas for 4 hours of care, five days a week is $26,520 per year.
Even those who have substantial savings, or a long-term care insurance policy can find their accounts depleted by health care costs. Many people falsely believe that Medicare will pay for long-term care, but that program only pays for rehabilitation-related care after a hospitalization.
For those who qualify, the VA Pension Program (also called Aid & Attendance) can help offset the cost of Assisted Living or in-home care.
Nursing Home Medicaid is another option to cover the cost of long-term nursing home care, but some legal work may be required before someone can qualify for this benefit.
An experienced Texas Elder Law Attorney will be familiar with the rules and the procedures and can help you qualify for these benefits as quickly as possible. A Certified Elder Law Attorney can help you develop a plan that will work with the 3-year look-back period for VA Pension qualification, and the 5-year look-back period for Nursing Home Medicaid qualification.
Careful planning with an experienced elder law attorney can help protect your assets, whether for your spouse or for your children. The belt-and-suspenders approach is to purchase long-term care insurance while you are healthy enough to qualify, and to make sure you receive the benefits to which you are entitled under Medicare and Medicaid.
Texas Nursing Home Medicaid
Medicaid is a joint federal-state program with each state implementing its own regulations on how the program is funded and managed, subject to certain federal requirements. In Texas, Medicaid covers the cost of nursing home care for those who qualify, but provides very little coverage for in-home care or assisted living care. Qualifying for Texas Nursing Home Medicaid can be extremely difficult. But paying for nursing home care over the long-term without obtaining Medicaid benefits could be all but impossible.
Elder Law Attorneys Help with Medicaid Crisis Planning
Change is life’s only constant. Sometimes these changes strike without warning. If you or a loved one has experienced a sudden illness or serious accident, you understand how abruptly everything can change. Are you or a loved one suddenly in need of nursing home care? Finding and affording quality care on short notice can be stressful and draining. An experienced Elder Law Attorney can help you determine the best options for care and how to qualify for Medicaid to help finance them.
The Medicaid Maze
Although Medicaid requirements vary from state to state, they all share one common element: complexity. Each state specifies a maximum income allowed for individuals and couples in order to qualify for Medicaid.
In Texas, the Monthly Income Limit for a single applicant is $2,829 per month. The Monthly Income Limit for a married couple is more complicated. The Community Spouse is allowed up to $3,853.50 of the couple’s combined income, with the applicant receiving no more than $2,829 per month. Also, the applicant’s total assets cannot exceed a specified amount called the Individual Resource Allowance, which in Texas is $2,000.
Although certain assets, like your home and automobile, are “exempted” for purposes of determining Medicaid eligibility, these figures are still alarming.
If the applicant is married, the process becomes more complicated. For the applicant to qualify for Texas Medicaid, their spouse can keep only half the couple’s assets up to a maximum Community Spouse Resource Allowance of $154,140 (in 2024). So, if a couple has the maximum $154,140** in assets, they must “spend down” to $3,000 for the applicant and $82,070 for the Community Spouse.
What can you do if the value of your “non-exempt” assets exceeds the $154,140* Maximum Community Spouse Resource Allowance? If you give your extra assets away, which seems like an obvious choice, you will encounter greater problems. Violating this “Transfer Penalty Rule” could disqualify you from receiving Medicaid for months or years, depending on how much you gave away.
If your need for nursing home care is immediate, time is not something you can afford to lose. Why? If you wait too long and your non-exempt assets fall below the maximum $148,620 limit, then the applicant’s spouse can only keep half of what is left. In other words, $82,070** truly is the Maximum Community Spouse Resource Allowance! An experienced Elder Law Attorney can help with Medicaid Qualification while preserving assets.
The Medicaid Qualification Means Legally Protecting the Maximum Amount the Law Allows
This is only a brief and oversimplified review of a few Medicaid rules, of which there are many more. Navigating them on your own could be a nightmare at best and subject you to penalties at worst. Fortunately, we can guide you through the Medicaid maze, advising you throughout the application process, ensuring that you retain the maximum income and total assets allowed by law.
An experienced Texas Elder Law Attorney can give you – and your family – peace of mind during a difficult and uncertain time. When dealing with Medicaid, legal advice is something you cannot afford to go without.
We assist seniors and their families in making the tough decisions regarding long-term care planning, including whether Medicaid eligibility may be an option.
Offsetting the Cost of Assisted Living, Memory Care, or In-home Care
Many families are unaware of an important benefit available through the Department of Veterans Affairs to which their loved ones may be entitled. It is a pension program often referred to as Aid and Attendance, and it can help defray the costs of care for qualified veterans and their surviving spouses. McNair Dallas Law can help Veterans qualify for this program as quickly as possible.
Some key things to know about the Aid and Attendance benefit:
- Aid and Attendance is a pension benefit and is not dependent upon service-related injuries.
- Wartime veterans and their surviving spouses may be eligible.
- Certain medical and financial requirements must be met.
- Veterans Aid and Attendance benefits can help pay for care in the home, nursing home or assisted living facility.
The Application Process
The Application for Aid and Attendance Benefits is a complex and lengthy process. The forms are available for you to do this yourself, but be advised that if you apply and your application is denied, you must wait a year before you can reapply. For these reasons, many people seek assistance in completing the application. Note: It is illegal for anyone to charge you a fee to help complete the application or file for benefits.
Offsetting the Cost of Care
The cost of assisted living, nursing home or home health care can be substantial, and is rising annually. A survey conducted by Genworth Financial found that in Dallas County, the median rate for a studio apartment in Assisted Living is $4,774 per month, a shared room in a nursing home averaged $8,390 per month, and in-home care is averaged $5,040 (44 hours per week).
The Veteran’s Aid & Attendance Benefit will not cover all of the cost of care, but it can help you preserve your savings by offsetting some of your recurring expenses for care.
The 2024 Maximum Monthly Benefits*
Aid & Attendance Pension for Veterans / Surviving Spouses
The amounts below are the maximum benefit amount a veteran or surviving spouse may be entitled to for Aid & Attendance Pension.
- The maximum benefit amount for a veteran who does not have a spouse or dependent child is $2,301 / month.
- The maximum benefit amount for a married veteran is $2,727 / month.
- The maximum benefit amount for a surviving spouse is $1,479 / month.
*Note: these maximum benefit amounts may fluctuate and the actual benefit that is approved may be less.
Who is Eligible to Receive Aid and Attendance Benefits?
There are three aspects of eligibility – Service, Medical, and Financial.
The basic service qualification is that the veteran must have served at least 90 days of active military duty, with at least one of those days during wartime (as defined by the Veteran’s Administration). Additionally, the veteran must have received a discharge that was other than dishonorable. The length of service requirement is longer for Gulf-War Veterans.
The veteran or surviving spouse must show that they require the “aid and attendance” of another person on a regular basis to perform the basic activities of daily living. The Veterans Administration defines the need for aid and attendance as:
- Requiring the aid of another person to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices or protecting himself/herself from the hazards of his/her daily environment, or
- Being blind or nearly blind, or
- Being bedridden, in that his/her disability or disabilities requires that he/she remain in bed apart from any prescribed course of convalescence or treatment, or
- Being a patient in a nursing home due to mental or physical incapacity.
In order to qualify for the VA Aid and Attendance Pension, the applicant’s recurring medical expenses must exceed their recurring income. The Veterans Administration has set a limit to the applicant’s Net Worth. The Net Worth is calculated by adding the recurring income (less the cost of recurring medical expenses) to the value of non-exempt assets. This figure must be less than the annually-adjusted Net Worth Limit, which is $155,356 in 2024. This amount is increased annually based on the Social Security Cost of Living Increase.
Countable VA Aid and Attendance Income Requirements for 2024
Your “countable income” must be less than the Maximum Annual Pension Rate. In other words, a veteran or surviving spouse cannot have annual income greater than the maximum annual VA pension benefit amount he or she potentially can receive. Don’t forget that the income of both spouses is counted for married veterans.
So how is “countable income” calculated? First, you add up all the regular income a veteran or surviving spouse receives, regardless of source. These sources may include earnings from work, retirement and pension payments, Social Security, and Social Security disability payments. Then subtract Unreimbursed Medical Expenses (UMEs) from annual income. Some examples of UMEs include the cost of home health services, assisted living or memory care, health insurance premiums, and even prescription drugs or supplies. An experienced Elder Law Attorney can help you determine which Unreimbursed Medical Expenses can be deducted.
Net Worth Requirements for 2024
Just like with “countable income,” the allowable net worth of a veteran or a surviving spouse is limited. Until December 1, 2024 that limit is $155,356. Net worth includes savings and checking accounts, mutual funds, stocks, and vacation homes. Your primary residence (and up to 2 acres of land), one automobile, and pre-paid burial plans are exempt assets.
Elder Law Attorneys Help with VA Pension Qualification
What if you are service and medically eligible, but have too much income or too many assets to qualify? Do not give up. Contact McNair Dallas Law for assistance with the application process or to understand the various options that may be available to you as a veteran.
Planning In Case of Incapacity
Legal Guardianship in Texas
Guardianship is a proceeding whereby a court determines whether an individual lacks capacity to manage their financial or personal affairs. Often guardianship can be avoided with proper legal planning.
If Guardianship proceedings are necessary to protect an individual, a hearing will be held before a judge in the probate court. The judge will determine whether or not the person is incapacitated to the extent that they require a Guardian of the Estate and/or a Guardian of the Person. The Judge will also select the individual or individuals who will serve as Guardian. Once a Guardian has been appointed, regular reports and accounting must be made to the court.
In order for someone to be judged incapacitated, evidence of poor decision making would need to be brought before a judge who specializes in determining capacity. If the judge rules that an individual is incapacitated, a guardian would be appointed. Often, less-restrictive alternatives to guardianship can be arranged with proper legal assistance.
Some less-restrictive alternatives to guardianship may include Powers of Attorney or Trusts. A Durable Power of Attorney appoints an Agent to manage the individual’s financial interests, and a Power of Attorney for Healthcare appoints an Agent to make health-care related decisions. Trusts may also be useful in protecting an individual’s assets.
Trusts: Revocable Living Trusts, Irrevocable Trusts, Testamentary Trusts, SpecialHow Trusts Help with Asset Protection Needs Trusts, etc.
Trusts come in many “flavors,” they can be simple or complex, and serve a variety of legal, personal, investment or estate tax planning purposes.
At the most basic level, a trust is a legal entity with at least three parties involved: the trust-maker, the trustee (trust manager), and the trust beneficiary. Oftentimes, all three parties are represented by one person or a married couple. In the case of a revocable living trust, for example, a person may create a trust (the trust-maker) and name themselves the current trustees (trust managers) who manage the trust assets for their own benefit (trust beneficiary).
A Living Trust can help protect a vulnerable adult from financial exploitation, may be used to avoid guardianship. For an individual who lacks capacity to handle their financial affairs, a Trustee may be able to step in, avoiding the need for a costly and time consuming guardianship.
Depending on the situation, there may also be many advantages to establishing a trust, including avoiding probate. In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries (or heirs) immediately upon the death of the trust-maker(s) with no probate required. Certain trusts also may result in tax advantages both for the trust-maker and the beneficiary. Or they may be used to protect property from creditors, or simply to provide for someone else to manage and invest property for the trust-maker(s) and the named beneficiaries.
If well drafted, another advantage of trusts is their continuing effectiveness even if the trust-maker dies or becomes incapacitated. Reach out to our office in Dallas to find out if you and your family could benefit from establishing a trust.
Powers of Attorney
A power of attorney is a legal document giving another person (the Agent) the legal right (powers) to do certain things for you. What those powers are depends on the terms of the document. A power of attorney may be very broad or very limited and specific. All powers of attorney terminate upon the death of the maker, and may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions).
When the intent is to designate a back-up decision-maker in the event of incapacity, then a Durable Financial Power of Attorney should be used. Durable Powers of Attorney should be frequently updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old.
You will also want to ensure that you have chosen alternative Agents, in case your primary Agent is unable or unwilling to act.
An Advance Directive, or Living Will, is a document that specifies the type of medical and personal care you would want should you lose the ability to make and communicate your own decisions, and have a terminal diagnosis. Anyone over the age of 18 may execute an advance directive, and this document is legally binding in Texas. Your Living Will can set out the circumstances under which you would not like your life to be prolonged if, for example, you were in a coma with no reasonable chance of recovery.
A Power of Attorney for Healthcare appoints an Agent to make medical decisions for you if you are temporarily or permanently incapacitated. Your Agent will make decisions based on their conversations with you, knowledge of your wishes, and the provisions of your Living Will.
A document that goes hand-in-hand with your Power of Attorney for Healthcare is an authorization to your medical providers to allow specified individuals to access your medical information. Without this HIPAA authorization, your doctor may refuse to communicate with your hand-picked decision maker.
For more information or specific questions about these Elder Law and Estate Planning issues, book a call with our office today.