If you have an elderly loved one who is living on a fixed income, and also has regular monthly medical expenses, those expenses may be adding up quickly. If your loved one is lucky enough to have private healthcare coverage, then he or she is better off than many elderly Americans. Unfortunately, many of America’s elderly struggle with both the rising cost of healthcare and the increased need for medical services as a result of the natural aging process. Two government programs–Medicaid (called Medi-Cal in California) and Medicare– are potentially available to help with those costs.

Although there are a number of differences between the Medicaid (Medi-Cal) and Medicare programs, understanding the more important differences will help you get a better idea if either program might be able to assist your loved one.

Both programs are federally funded; however, Medicaid (Medi-Cal) is administered by the states which means that there may be slightly different eligibility criteria and benefits among the states. Medicare requires a monthly participation payment for some of its coverage. Medicaid (Medi-Cal) does not require the payment of any premiums or participation fees, but co-payments may be required for specific services.

Medicaid (Medi-Cal) is income and asset based whereas anyone over the age of 65 (and some disabled individuals under 65) may participate in Medicare. Medicaid (Medi-Cal) covers more services than the Medicare program, but getting approved is more difficult due to the strict income and asset eligibility guidelines. If your loved one has income or assets that you are concerned may prevent approval for the Medicaid program, there may be alternatives. Talk to your estate planning attorney about ways to structure his or her estate that will fit into the income and asset guidelines.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Contrary to popular belief, you should not include your burial instructions or other final arrangements in your Will. Instead, leave your burial instructions or other instructions regarding your final arrangements in a separate instrument. The reason for this is timing. Most likely, your heirs or executor may not find your will immediately, and by the time someone locates it, it may be too late. You need to make sure you give your funeral instructions to someone who can locate it immediately.

One good way to leave your funeral instructions is to draft a simple letter of last instructions or wishes. You can give a copy to several people, including your executor, close friends and immediate family. This way, several people will have access to your last instructions and use your letter before your funeral.

If you do not leave a letter of last instructions or other written document outlining your last wishes, your loved ones will most likely have the legal right to make final ceremony decisions. You should also make sure you set aside sufficient funds to cover your burial expenses to avoid placing the financial burden on your loved ones.

In our offices, we provide our clients with a large binder that includes not only copies of their estate planning documents, but also a designated place for them to set forth their wishes concerning final services and disposition of remains.  There is also a place for  them to place copies of any agreements that may have been arranged with funeral homes, cremation services, etc.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Alzheimer’s disease is a form of dementia that one in eight older adults is predicted to develop. It is a degenerative disease, which means that the symptoms become worse with time. Contrary to popular belief, not all elderly adults develop the disease. According to medical studies, patients can live up to 20 years after symptoms develop, and the average patient lives up to eight years after developing symptoms. There is currently no cure for the disease, but there are several types of medications and treatments available to help alleviate symptoms. Alzheimer’s causes brain cells to die, which leads to memory loss. Although all Alzheimer’s patients develop memory loss, not all people who have memory loss have Alzheimer’s disease.

The progressive deterioration of nerve cells leads to memory loss, and most patients are eventually unable to take care of themselves and require professional care from others. Although there are several symptoms unique to Alzheimer’s patients, one telltale sign is significant memory loss of recently learned information. Another important symptom is difficulty performing routine tasks due to decreased concentration levels.

If you notice a loved one developing memory problems or retaining information, you should seek medical treatment or persuade your loved one to see a doctor. Your loved one may be experiencing normal memory loss that occurs to most people as they age. If a doctor’s diagnosis suggests your loved one may have Alzheimer’s, you may want to discuss some important information now regarding future health care wishes and estate plans.

In many cases, the disease progresses to the point where it is appropriate to seek professional custodial care either in the home or in a facility. When families facing this potentially expensive type of care and would like to explore options for paying for it, it is  best to consult with an experienced and qualified elder law attorney who is familiar with public programs available to assist in these circumstances.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

The elderly are constant targets of electronic theft. Although all of us are potential targets, the elderly are especially vulnerable because they may have less experience with computers and electronic technology. Adults age 60 and older may not have as much technical experience as younger generations. Furthermore, as we age, we become subject to memory loss, which may cause us to believe we recognize email addresses or senders’ names. However, this makes them more likely to open phishing emails or spam emails that become operative when unsuspecting recipients click on email links. Once unsuspecting email recipients click on these phishing links, phishers can take electronic information stores on their computers, including banking passwords, Social Security numbers and other personal, financial information.

How can you help your elderly loved ones against malicious phishing attacks? You can help them by installing updated anti-virus and malware software programs on their computers. You can also encourage them to keep a close eye on their bank account statements, and if they notice unusual activity, they should contact their banks. You can also teach them to delete spam email without opening them by immediately depositing them into their bank accounts. Finally, you can help them identify spam email as junk email.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

As noted in the previous Part, many person who initially contact our office relating to VA benefit eligibility do not immediately qualify for them.  In most cases it is because they have too many assets that the VA would count in ascertaining their availability.

However, there are numerous effective and legal strategies that can be employed to reduce one’s net worth for VA eligibility purposes.

One note of caution: There are far too many persons and entities that purport to provide assistance with VA benefit planning, some even offering “free” planning services.  As with most things in life, you get what you pay for.  One should be very careful before proceeding with a non-attorney planner.  These individuals often hide their fees in annuities and other financial products that may or may not be appropriate.  Common oversights include failing to take into consideration tax consequences and of the possible future need to apply for Medi-Cal benefits.  Certain strategies that may work in VA planning may cause long periods of ineligibility for Medi-Cal benefits.

One strategy that may be used is simply to transfer assets to a third person who is not a relative living in the same dwelling as the applicant.  Unlike Medi-Cal, the VA does not penalize for gratuitous transfers.  However, when preserving the ability to obtain future Medi-Cal benefits is important, it is wise to work with an experienced and qualified elder law attorney who is familiar with both programs.  Another potential problem with gifting of appreciated assets is possible adverse tax conequences.

A strategy that will not work is to transfer an interest in real property while retaining a life estate.  The VA will continue to include the property due to the retained interest.

Another strategy is to convert assets to income, typically through the purchase of an annuity.  The assets in the annuity is not counted, but the income stream is. Again, this is another area where careful consideration needs to be given to avoid future problems in obtaining Medi-Cal benefits.

WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics.  It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals.  For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Turning to the financial test in VA eligibility planning, there is much confusion in this area.

Unlike the VA Compensation program, whose eligibility tests focus on a veteran’s degree of disability and whether or not it was connected to his or her service to our country, the Pension program also focuses on the veteran’s income and assets.

When one applies for the pension benefit, the VA screener’s job is to determine whether or not the veteran or surviving spouse has sufficient assets and income to meet his or her basic needs, including needed medical and care expenses.

A common misconception is that there is some “bright line” test used by the VA for determining how many assets an applicant may have to qualify for benefits.  The most common asset limit figure floating around is “$80,000″  This is untrue as there are many persons with fewer than $80,000 assets whose applications have been denied.

Instead, the VA screener estimates an applicant’s medically related expenses over their expected lifetime and, in that light, looks at the applicant’s assets and anticipated income over the same expected lifetime.  When it is determined the veteran does not have sufficient income and assets to cover the essential medical expenses, eligibility is approved.

However, that is not the end of the analysis. Once basic eligibility is established, the VA screener must then determine the amount of the benefit.  In Part I of this primer, we identified the MAXIMUM benefit under each pension program.  However, the actual benefit could be less than the maximum benefit.  It is determined by looking at the applicant’s income in light of his or her unreimbursed medical expenses.  When the shortfall is less than the maximum benefit for the applicable program, the veteran may receive something less than the maximum pension benefit.

Despite its twists and turns, the VA Pension benefit can be of critical assistance in helping families cope with the high costs of care for the elderly with benefits that can exceed $2,000 per month.

While many VA clients who initially contact our office do not immediately qualify for these critical benefits, working together, we undertake an effective and lawful series of steps to help them achieve eligibility.  In the next part, we will focus on some of these strategies.

WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics.  It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals.  For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

In this Part, we will explore the disability test.

As previously discussed, if a veteran became disabled while serving the country during his or her military service, he or she will likely be eligible for a disability benefit under the VA’s Compensation program, which, unlike the Pension program, is not means tested.

To receive a VA pension benefit. however, the veteran must establish his disability in one of two ways.

First, a veteran can show that a permanent  and totally disabling non-service related disability that is reasonably expected to continue indefinitely.  This obviously involves the presentation of medical information and/or tests.

Second, older veterans and their surviving spouses can establish a disability status by proof of being age 65 or older.

To obtain the additional benefits under the House Bound and Aid and Attendance benefit, more proof is required.

The House Bound benefit is essentially a benefit for “shut ins”, i.e., persons primarily confined to their homes on a permanent basis.  Although, it does not require that the individual be unable to leave the home, persons who regularly drive to a store, church or a doctor’s office would probably not qualify.

For the Aid and Attendance benefit, there are several ways to meet the test.  There is a presumption of disability for certain ailments such as blindness or near blindness and for persons confined to a nursing home.

For others, they must make a showing that they need the “aid and attendance” of another.  These can be shown by evidence of the need for assistance in performing the normal acts of daily living such as ambulating, dressing, bathing, feeding, toileting, etc. Those who have been admitted to an assisted living facility for these above reasons will likely meet this test.

Next, we will focus on the financial tests.

WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics.  It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals.  For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

To be eligible for the VA “Pension”, a veteran applicant must satisfy three basic tests: 1. Wartime Service; 2. A Disability; and 3. Limited Assets and Income.  We will explore each of these requirements in the next few Parts.

A surviving spouse of a veteran must also meet a fourth test, the “Marriage” test.  He or she must have been married to a veteran of the opposite gender at the time of the veteran’s death, been married for more than one year and have not remarried.  Unfortunately, this means that  many former spouses of veterans who were divorced from their veteran spouse before the veteran’s death do not meet this test.

As to the service test, a veteran must have generally have served 90 days of active (not reserve) duty one day of which was during designated wartime periods, including WWII, Korea, Vietnam and the Gulf War.  Please note the the VA definition of “wartime” differs from many common definitions for such periods.

The service test also requires that the veteran discharge must be “other than dishonorable”.  Thus, it is not limited only to those who earned an honorable discharge.  Nor is it limited to veterans who saw combat or were stationed overseas.

In determining wartime periods, World War II is defined from December 7, 1941 (Pearl Harbor) to December 31, 1946, not V-J day in July 1945 as many mistakenly assume.  For Korea, the dates are June 27, 1950 to December 31, 1955.  For Vietnam, it is August 5, 1964 to May 7, 1995, however, there is additional earlier coverage (February 28, 1961 onward) for certain veterans who actually served in Vietnam before 1964.  For the Gulf War period, the dates are August 2, 1990 until present.

In the next two Parts we will discuss the medical and financial tests for the pension benefit

WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics.  It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals.  For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

In Part 2 of this Primer series, we will take a closer look at the VA “Pension” benefit available to certain wartime benefits.

The “Pension” benefit is commonly and mistakenly referred to as the “Aid and Attendance” (A & A) benefit.  As discussed below, the A & A benefit is but one of three “Pension” benefits.

The “Pension” benefit is actually three separate but related benefits.  The fundamental benefit is the “Improved Pension”.  There is an additional benefit for those who meet the requirements of being “House Bound”.  Finally, there is the Aid and Attendance benefit for those whose medical condition requires the “aid and attendance” of others.  In later parts of this Primer, we will further explore the requirements for these benefits.

What are the “Pension” benefits?  They vary depending on the applicant’s status, i.e., veterans and surviving spouses of veterans and the level of benefit applied for.  The benefit amounts are also typically adjusted each year. Set forth below are the figures for 2012.

For the veteran, the 2012 maximum monthly basic pension benefit is $1,021 for an individual and $1,337 for the individual and one dependent.  The 2012 maximum monthly House Bound benefit is $1,248 for an individual and $1,564 for an individual and one dependent.  The 2012 maximum monthly Aid & Attendance benefit is $1,703 for an individual and $2,019 for an individual and one dependent.

For a surviving spouse of a wartime veteran, the 2012 maximum monthly basic pension benefit is $684 for an individual and $896 for the individual and one dependent child.  The 2012 maximum monthly House Bound benefit is $837 for an individual and $1,048 for an individual and one dependent child.  The 2012 maximum monthly Aid & Attendance benefit is $1,094 for an individual and $1,306 for an individual and one dependent child.

Next, we will explore the three-part test to establish eligibility for the pension benefit.

WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics.  It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals.  For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Our firm regularly assists clients with obtaining benefits available from the Department of Veterans Affairs (VA) for assistance in paying for long term care benefits.  The VA requires that attorneys be accredited by the VA in order to represent veterans before the VA relative to their benefits.  This author is so accredited.

In helping our veteran clients and their surviving spouses, we have learned that there is much confusion about VA benefits and their availability.   In this Primer series, we will outline basic features of these benefits that should be considered by a prospective VA benefits recipient.

WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics.  It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals.  For such advice, it is wise to consult with a qualified and experienced elder law attorney who is accredited by the VA.

The VA is an agency of the federal government that provides a variety of benefits and services to our country’s veterans.  Three divisions of the VA are: 1.’The Veteran’s Health Administration – which provides medical services; 2. The National Cemetery Administration – which offers benefits relative to final services and internments; and 3. The Veteran’s Benefits Administration which administers certain disability benefits.  The focus of this Primer series will be this third division.

The VA offers two basic disability programs: 1. “Compensation” – for veterans who have service connected disabilities; and 2. “Pension” - a benefit for certain wartime veterans who do not have a service connected disability.

The Compensation benefit is largely based upon the severity of the service connected disability measured in terms of percentages.  For example, a veteran with a 100% disability rating will receive certain benefits not available to a veteran with a 10% rating as well as a priority in certain benefit programs over those with lower ratings.  While the disability must have occurred while the veteran was on active duty, it does not have to be a wartime injury.  The primary issues in obtaining Compensation benefits are establishing the the disability is service connected and establishing the percentage of disability which is based upon medical information and tests.

The Pension benefit, which does not require a service connected disability, is available to certain wartime veterans and their surviving spouses.  There are, however, a number of other requirements that must be satisfied to obtain this benefit.

In the remaining Parts of this Primer, we will discuss the various requirements of the Pension benefit and effective strategies that can be used to lawfully obtain this important benefit.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.