Good news! For the first time since 2008, the Department of Veterans Affairs has announced an increase in maximum  Aid and Attendance benefits available to veterans of the armed forces. These new figures for 2012 reflect a 3.6% cost-of-living adjustment, effective December 1, 2011:

$20,447 per year (~$1,704 per month) for a qualified veteran;
$24,239 per year (~$2,020 per month ) if the veteran is married;
$13,138 per year (~$1,095 per month ) for a surviving spouse of a qualified veteran;
$31,578 per year (~$2,631 per month ) if both spouses are qualified veterans.

What is Veterans Aid & Attendance?

Veterans Aid & Attendance pension benefits are intended to be a form of financial assistance to meet the care needs of veterans and their surviving spouses. If you are younger than age 65, then you must be completely disabled in order to receive this benefit. Those over 65 do not have to be disabled. However, the veteran or spouse must be in need of regular aid and attendance due to: Inability of claimant to dress or undress himself (herself), or to keep himself (herself) ordinarily clean and presentable; frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to feed himself (herself) through loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.

It is helpful to note that not all of the disabling conditions in the list above are required to exist. It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else–not that there be a 24-hour need.

How do I know if I can qualify for Veterans Aid & Attendance Pension Benefits?

You or your spouse must have served on active duty for at least 90 days, at least one day of which occurred during a period designated as wartime (see below). There must have been an honorable discharge as well. Single surviving spouses of such veterans are also eligible.

Periods Designated As Wartime:
World War II — December 7, 1941 through December 31, 1946
Korean Conflict — June 27, 1950 through January 31, 1955
Vietnam Era — August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975
Gulf War — August 2, 1990 through a date to be set by law or Presidential Proclamation

If you would like to learn more about the Veterans Aid & Attendance program and how the Farr Law Firm can help you obtain the benefits you deserve, contact us!

If you would like to sign up to receive Evan Farr’s Aid & Attendance 4-Part Mini Series via e-mail, please click here.

Filing a Veterans Aid & Attendance Claim

Fun Memorial Day Facts

The Farr Law Firm wishes you and yours a Happy Memorial Day Weekend!  Monday is Memorial Day, and we would like to take this opportunity to say “Thank You” to our many friends, colleagues, and peers who have made sacrifices to ensure our freedom and principles.

Here are a few fun facts* you may not have known about Memorial Day:

• Memorial Day was officially declared on May 5^th, 1868 by General John Logan, commander of the Grand Army of the Republic.
• The first state to officially recognize Memorial Day was New York in 1873.
• Soldiers of the 3d U.S. Infantry place small flags at each of the over 260,000 headstones at Arlington National Cemetery.  This has been taking place since the 1950’s.
• Boy Scouts and Cub Scouts of St. Louis place flags on 150,000 burial places at Jefferson Barracks National Cemetery.
• You can thank Congress (’71) for your three day weekend.  Memorial Day has been a federal holiday since passage of the National Holiday Act of 1971.

• In 1988, 2,500 motorcyclists traveled to Washington, D.C. for the first ever Rolling Thunder demonstration.  By 2005, the numbers swelled to a half-million riders.

There is some related news worthy of mention:

The Honoring All Veterans Act of 2011 – introduced yesterday by Senator Richard Blumenthal (D-CT) –seeks to improve health care, education, employment, and housing for veterans.  “Our military men and women have kept their promises to our country, and now we must keep faith with them, not only in words but in deeds,” said Blumenthal.

For some couples, aid and attendance benefits may increase.  The Bill passed the House May 23rd and will need to pass the Senate next.   The legislation seems to be on the fast track to becoming law.  GovTrack reports, “the vote was held under a suspension of the rules to cut debate short and pass the bill, needing a two-thirds majority . . . [usually reserved] . . . for non-controversial legislation. The totals were 380 Ayes, 0 Nays.”

The aid and attendance benefit would be increased for disabled veterans who are married to one another.

The Department of Veterans Affairs would gain a new source of key medical personnel through the Uniformed Services University of the Health Sciences (USU).

The Veterans Administration would seek to remedy substance abuse by using data from state prescription drug monitoring programs (PDMP).

An Independent Board would review DOD/VA transition problems including benefits.

“Our nation must keep faith with men and women who serve and sacrifice for our freedom. Unfortunately and unconscionably, America is still failing them and their families by tolerating unemployment, homelessness and inadequate health care,” said Blumenthal.

“This legislation comes from listening to and working with veterans and their families. While the Honoring All Veterans Act addresses many critical needs, it is only an opening salvo in a sustained, unceasing campaign to ensure that no veteran is left behind. It is a down payment on a larger debt,” said Blumenthal, according to politicalnews.me. “Our military men and women have kept their promises to our country, and now we must keep faith with them, not only in words but in deeds.”

*Fun Facts Source(s):

http://www.usmemorialday.org/backgrnd.html

http://articles.cnn.com/2009-05-25/living/mf.holiday.memorial.day_1_decoration-day-organization-of-union-veterans-wreaths-and-flags/3?_s=PM:LIVING

Evan H. Farr, CELA

When older adults think of estate planning, many actually have asset protection in mind. What they want is the peace of mind of knowing that the nest egg they’ve been saving for that proverbial “rainy day” will actually be available for them when that rainy day comes. The rainy day, for most people, is when they or their spouse enters a nursing home.  But estate planning and asset protection are two very different fields of law. Estate Planning documents do nothing to achieve asset protection, as Estate planning deals with distribution of assets upon death.  If you wind up going broke in a nursing home before your death, your Estate Plan will wind up being a worthless pile of paper.

These days most older adults use the Revocable Living Trust (RLT) as their primary Estate Planning document in order to minimize delays and expenses and avoid the “nightmare of probate.”  A Last Will and Testament is designed to put your estate into probate – an expensive and complex process that most people want to avoid at all costs.  Although the RLT can achieve this important goal of avoiding probate, a major limitation of the RLT is that it cannot accomplish asset protection. The RLT can’t shield your assets from nursing home expenses.  With the average cost of a nursing home room in the DC Metro area at around $9,000 per year, this is an important limitation of the RLT that every older adult needs to understand.

Is there a living trust that actually does protect assets in contemplation of future nursing home expenses?  Yes. You can protect your assets legally and effectively by using the Living Trust Plus^TM (LTP).  As opposed to the RLT which only avoids probate, the LTP is designed to protect your assets from the expenses and complexities of probate PLUS lawsuits PLUS nursing home expenses. The LTP functions very similarly to the RLT and maintains much of the flexibility of the RLT, but in addition to serving as your primary estate planning document, the LTP allows you to actually protect your nest egg from having to be “spent down” to pay for the catastrophic expenses often incurred in connection with nursing home long-term care.

If you’re over the age of 65 and you’ve been holding on to a nest egg for a rainy day, the time to get out the umbrella and protect the nest egg is now, while you’re still relatively healthy and living independently. To find out more, you can sign up yourself and your family to attend a free seminar on the Living Trust Plus^TM.

If you are an attorney and are interested in learning how you can offer your clients true asset protection, visit LivingTrustPlus.com and join the dozens of attorneys across the U.S. who have already educated themselves and embraced the LTP!

Evan H. Farr, Certified Elder Law Attorney

“Getting old is not for sissies” goes the quote. Perhaps one of the biggest challenges people face as they age is a seemingly inevitable and impending change to their living situation, whether it be due to health concerns, financial circumstances or both. This feared transition may not be so inevitable after all.  With the right plan, seniors can qualify for Medicaid, take advantage of today’s latest elder care technologies, and protect the assets which otherwise could be drained by the catastrophic costs of long-term care.

Most people are familiar with care options such as In-Home Care, Assisted Living, and Nursing Homes.   But now, a fourth option is gaining popularity: Aging-in-Place . . . a care option that allows individuals to continue living independently in their own home without the need for a live-in caregiver.

TabSafe

Drug compliance is the most common issue for those living alone. For those with memory issues, pill-reminder services and gadgets can issue daily visual and audio alerts to take medication, dispense the correct pills at the right times, and can even send a confirmation message to a caregiver once the medication has been dispensed. If a dosage is missed, an alert is sent to the caregiver and appropriate action can be taken.  The  TabSafe is one such product; you may visit their website here.

Falling is the leading cause of injury and death among those ages 65 and older.[1] For those with a high fall risk, monitoring devices like eNeighbor use unobtrusive sensors to monitor a resident’s daily routine. If the resident were to fall and not be able to get up or reach the phone for help, the device would trigger a phone call to a list of contacts as well as a 24-hour call center.

HomMed Genesis

“Remote monitoring” is an in-home technology that measures vitals such as heart rate, body weight, blood pressure, and blood glucose levels–making it useful to patients with a variety of health concerns, from cardiovascular disease to diabetes.  Check out the HomMed Genesis.

These latest technological advancements are not necessarily cheap.  One of the goals we at the Farr Law Firm seek to accomplish through our Level 4 Planning is to protect assets from the disastrous expenses of long-term care, so that some of those assets can be used to enhance the standard of living with goods and services not covered by government financial assistance, such as the ones I’ve described.  Of course, if Aging-In-Place is not the ideal option for you, we can help you prepare for and decide on your other long-term care options.

If long-term care planning is a relatively new subject area for you or your family, I suggest you take a few moments to watch this segment from the National Business Series.

If you have been contemplating you or a loved-one’s long-term care options, we can provide the solutions that you may be looking for. Achieving long term peace of mind is an invaluable asset that we are honored to assist you with. Please do not hesitate to call us at 1-800-399-FARR to schedule a free, initial consultation.

While it may be true that the Supreme Court is often tasked with the daunting assignment of deciding the most controversial and divisive of issues, last Tuesday’s unanimous ruling was a little different.

Most who are familiar with the facts of Henderson v. Shinseki would probably agree that the decision “felt right;” especially to the elder law attorneys and senior-serving professionals who help U.S. Veterans on a daily basis.

The Court reversed a decision by the U.S. Court of Appeals that ruled Veterans Court judges could not extend the deadline to appeal, even when a Veteran’s mental illness procured the delay.

Justice Samuel Alito explained the Courts’ rationale in reversing the decision of the Court of Appeals;

The (Dep’t of Veterans Affairs) is charged with the responsibility of assisting veterans in developing evidence that supports their claims, and in evaluating that evidence, the VA must give the veteran the benefit of any doubt. … Rigid jurisdictional treatment of the 120-day period for filing a notice of appeal in the Veterans Court would clash sharply with this scheme.

For an interesting look at how the case developed in the headlines over the course of the past several months, read the first Washington Post article I referenced late last year, Court hears appeal from veteran who missed deadline, here.  Then, read Supreme Court eases benefit deadline for vets, the recent article from USA Today, available here.  The latter link also includes a photo of the late Mr. Henderson.

Last year I called attention to Henderson on my National Elder Law News Blog, in the article, Veteran Misses Filing Deadline Due to Mental Illness: Fair? a case about a Veteran with Schizophrenia, whose illness prevented him from meeting a deadline imposed by the government.

Mr. Henderson’s lawyer argued in front of the Court that his client’s disability – which developed as a result of years in the service – prevented him (Mr. Henderson) from meeting a deadline to appeal the government’s denial of his request for home care by the Veteran’s Administration.  The argument was that it would be an injustice to strictly enforce the deadline against Mr. Henderson.

Veterans’ disability compensation is paid to Veterans who are injured as a result of their service to the country.  If denied a request for benefits, there are 120 days to file a notice of intent to appeal.  Mr. Henderson was denied home care by the Veteran’s Administration, after which he filed his notice of appeal 15 days late.

The case really boiled down to inquiries of fairness and Congressional intent.  Henderson argued that Congress intended for Veterans to be treated fairly, and that the 120-day time limit was meant to be flexible; a permeable deadline, should the interests of justice require an extension.

The loser in this case (The Secretary of Veterans Affairs) argued that the time period was meant to be strictly applied and that any change to the deadline must come from Congress itself and not from the discretion of the bench (a judge).

Various veterans groups followed this case from its inception.  With the traumatic stress and psychological scars evident in many soldiers who have returned from the wars in Iraq and Afghanistan, groups like the National Organization of Veterans’ Advocates, the National Veterans Foundation, and Paralyzed Veterans of America are undoubtedly happy with how Henderson turned out.

For information on Aid & Attendance benefits, you can check out our Firm’s links to frequently asked questions below:

What Is the Amount of the Aid and Attendance Benefit?

Who Is Eligible for the Aid and Attendance Pension Benefit?

Is Aid and Attendance Only for Low Income Veterans?

How is the Aid and Attendance Benefit Calculated?

Filing a Claim

The Asset Test

Image Credits: Photograph uploaded by FreeDigitalPhotos.net Admin

Today I received this piece by Charles M. Province from a colleague.  In honor of all the brave men and women who have served our country, it is my pleasure to pass it on.  Please feel free to email or forward it to your friends and family.

GIVE THANKS FOR ALL OF THE VETERANS THAT HAVE GIVEN US THE FREEDOMS WE ENJOY

Many of my clients ask me how I feel about reverse mortgages, and even more so this past week because of a favorable story that appeared in last week’s Washington Post entitled “Reverse Mortgages are Not the Next Subprime.”  This excellent article was written by the ”Mortgage Professor,” a Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania (incidentally, my Alma Mater), and clears up much of the confusion and myths and fears surrounding the reverse mortgage.  I encourage all of you to read it.  Another good source of information about reverse mortgages is the Federal Trade Commission Fact Sheet. 

As a Certified Elder Law attorney, one of my primary goals is to help preserve the dignity and enhance the lives of my elderly clients.  For many of my clients, remaining in their homes as long as possible is one of their highest priorities.  I have been a long-time fan of reverse mortgages because they help my clients do exactly that — remain in their homes as long as possible.  

Why? Because in order to remain in your home as long as possible, you will most likely at some point need some home care.  “Home Care” can be health care and/or supportive care provided formally in your home by health care professionals (typically referred to as home health aides) or by paid or unpaid family members or friends (typically referred to as caregivers).  Often, the term “home care” is used to mean non-medical care, or custodial care, which may be provided by persons who are not nurses, doctors, or other licensed medical personnel.  The term “home health care” typically refers to care that is provided by a licensed health care professional — most often a Certified Nurse Assistant (CNA).  However, the terms are often used interchangeably, and for simplicity in this article I will use the term “home care” to refer to both types of care.

The goal of home care is typically to to allow you to remain at home and age in place, rather than being forced to move to an assisted living facility or nursing home.  Home Care providers render services in your own home. These services typically include a combination of health care services and life assistance services.

Health care services may include services such as wound care, administration of medication, physical therapy, speech therapy, and occupational therapy.  Life assistance services typically include help with daily tasks such as meal preparation, medication reminders, laundry, light housekeeping, errands, shopping, transportation, companionship, and help with the activities of daily living (ADLs), which typically refers to six activities (bathing, dressing, transferring, using the toilet, eating, and walking). 

Although some home care is provided by family members for free, most family caregivers need to be paid, and these payment arrangements should always be made pursuant to a written caregiver contract (prepared by an Elder Law Attorney) between the caregiver and the care recipient.  Because home care is quite expensive, having the proceeds from a reverse mortgage is often one of the  only ways that elders can afford to pay for appropriate home care. According to The 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, the 2009 national average hourly rate for home health aides increased by 5.0% from $20 in 2008 to $21 in 2009. The national average hourly rate for homemaker/companions increased by 5.6% from $18 in 2008 to $19 in 2009. 

Most of my clients, when they start out needing home care, will typically start with receiving 4 hours of care 3 days a week, which costs about $1,000 per month and is easily affordable for many people.  But over time, most of my clients progress to the point of needing upwards of 12 hours per day of home care, costing over $7,000 per month, and very few people can afford to pay for this type of care without eventually tapping into their home equity via a reverse mortgage.

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which completely protects your ability to remain in your home. So long as you pay your property taxes and homeowners insurance, and maintain your property, you can remain in your home forever. If the reverse mortgage lender fails, any unmet payment obligation to the borrower will be assumed by FHA. 

According to the Mortgage Professor’s article mentioned in my first paragraph, in 2009 about 130,000 HECMs were written, and feedback from borrowers has been mostly positive. In a 2006 survey of borrowers by AARP, 93% said that their reverse mortgage had a mostly positive effect on their lives.

For many of my clients, a reverse mortgage is the best way, and often the only way, for them to be able to afford to remain at home, despite the fact that reverse mortgages are expensive to obtain.  However, reverse mortgages are not for everyone, as there are other programs that may be able to help you remain in your home.  For instance, many of my clients are eligible for the Veterans Aid and Attendance benefit or for home-based Medicaid, or can be made eligible for these benefits through our process of Asset Protection. 

Whether you own your home outright or in a Revocable Living Trust or in my proprietary  Living Trust Plus^TM Asset Protection Trust, if you think a reverse mortgage might be the solution you need, please contact me for a free consultation so I can evaluate your specific situation and advise you as to whether a reverse mortgage is your best option for allowing you to live comfortably in your home.

Looking for a way to help Mom and Dad pay for Home care or assisted living? Perhaps you are their caregiver. Wouldn’t it be nice to receive some extra income to help you provide their care? There is financial help available for senior Veterans and their spouses.

For Veterans who served during a time of war or for their surviving spouses, the Veterans Aid & Attendance Benefit will pay additional income to cover long-term care costs. The great news about this program is that VA will allow Veterans’ households to include the annual cost of paying any person such as family members, friends or hired help for care when calculating the Pension benefit.

The pension can provide an additional monthly income of up to $1,949 a month for a couple, $1,644 a month for a single Veteran or $1,056 a month for a single surviving spouse of a Veteran. This money can be used to help pay the cost of home care, adult day services, assisted living or nursing home services.

In order to reduce income to meet the income test for pension, a rating for “aid and attendance” or “housebound” is crucial. Not only does the rating significantly increase the benefit amount but without a rating, room and board costs for assisted living are not deductible for purposes of reducing income. Only the much smaller assisted living medical costs are deductible.

For home care, non-medical costs are only deductible if the in-home attendant is licensed for healthcare in that state or if there is a rating. Since the non-medical costs for home care represent the bulk of all costs for long-term care at home, without a rating, those households with a non-licensed attendant would not qualify for the benefit. Examples of medical or nursing services at home would be help with activities of daily living such as dressing, bathing, toileting, ambulating, feeding, diapering and so on. Other services might include medication reminders or supervision necessary to provide a protective environment for the care recipient — in the case of dementia or Alzheimer’s.

A rating for aid and attendance is automatic if someone is a patient in a nursing home or that person is blind or so nearly blind as to need assistance.

A non-licensed in-home attendant can be just about anyone receiving pay for providing services. This might be members of the family, friends, or someone hired to live in the home. Unfortunately, a spouse cannot be included in this list for reimbursable caregivers.

For a disabled person who has been rated, a family member will be considered an in-home attendant, but that family member has to be paid for services duly rendered. Documentation for this care must be provided to VA, and such arrangements must be extensively documented to prove they are legitimate.

The care arrangements and payment for home care must be made prior to application and there must be evidence that this care is needed on an ongoing and regular basis. For our clients, I recommend a formal care contract and monthly invoice billing for services. Money must exchange hands, appropriate taxes must be paid, and there must be evidence of this. All of this documentation must be provided as proof to VA when making application for the benefit. Costs for these services must be unreimbursed; meaning these costs are not paid by insurance, by contributions from the family or from other sources. Even though the family member being paid for services cannot reimburse the Veteran household directly, the family may pay the bills for the Veteran household. This indirect form of support is allowed.

There is an application form to be submitted, along with a doctor’s report form, documentation of medical expenses and payment of home care services or facility fees. Other documentation includes original discharge papers, marriage records if applicable and a death certificate where applicable. An inventory of all sources of household income and all household cash equivalent assets is also required. Providing complete documentation with the initial application will expedite a rating and approval for pension payment.

Accredited Attorney
Evan H. Farr is an Accredited Attorney with the U.S. Dept. of Veterans Affairs. The Farr Law Firm is an Elder Law and Estate Planning Firm that also specializes in helping Veterans and their spouses obtain the financial assistance to which they are entitled. If you are a Veteran or spouse of a Veteran and you need assistance in your home, or are living in or considering moving into an Assisted Living Facility or Continuing Care Retirement Community, please contact us to see if you might qualify for the Veterans Aid and Attendance Special Pension Benefit or the Veterans Housebound Special Pension Benefit.

In Part 1 of this series I outlined the necessity to create a good Long Term Care Plan and in Part 2 I discussed the three most essential documents found in that plan.

The first essential document is a General Power of Attorney (POA) containing Asset Protection Powers. This document authorizes your “Agent” to act on your behalf and to sign your name to legal and financial documents. The Asset Protection powers contained therein enable your agent to do Medicaid Asset Protection if you have not already begun this process. The second essential document is an Advance Medical Directive (AMD) containing a Long-Term Care Directive. This document authorizes your “Medical Agent” to make decisions with respect to your medical care. Both the POA and AMD authorize your agents to intervene in the event that you are physically or mentally unable to do so. The third essential document is an Advance Care Plan that identifies and details your specific needs, desires and habits for your future caregiver so that you will receive long-term care uniquely tailored to you.

As explained in Part 2, a good Long-Term Care Plan will also typically a Living Trust – either a Revocable Living Trust (RLT) or an Irrevocable Income-Only Trust (IOT). If you become incapacitated, an RLT can provide management of your assets by your trustee similar to a POA. However, as was noted, an RLT does not protect your assets from the expenses of long-term care. An IOT, which will be discussed in detail in Part 4, is a tool that protects you not only from probate, as an RLT does, but also from the expenses of long-term care.

Part 3 will now discuss using long-term care insurance as part of a Long-Term Care Plan.

Virginia’s Qualified State Long-Term Care Insurance Partnership
Virginia’s Long-Term Care Insurance Partnership Program, which became effective on September 1, 2007, allows consumers to obtain Long-Term Care Insurance as part of a Long-Term Care Plan andas part of a Medicaid Asset Protection Plan. This program allows individuals obtaining Partnership-qualified policies to protect assets that otherwise might have to be paid to a nursing home prior to obtaining eligibility for Medicaid benefits. A Partnership-qualified policy enables policyholders to protect one dollar of personal assets for every dollar the policy pays out in benefits.

One of the main purposes of this Long-Term Care Insurance Partnership Program is to offer government-endorsed “Medicaid Asset Protection” to consumers who buy long-term care insurance, enabling these consumers to protect an additional dollar amount of personal assets while still remaining eligible to apply for Medicaid coverage of long-term care. The amount protected with a Partnership-qualified policy will be equal to the sum of all benefits paid under the Partnership-qualified policy when the applicant seeks to qualify for Medicaid. The total amount of assets that a policyholder may protect as a result of a Partnership-qualified policy is above and beyond the basic allowances that a client and a client’s spouse may keep under the basic rules of the Medicaid program.

Benefits of Partnership LTC Insurance
Long-term care insurance was, and is (especially in light of Virginia’s Long-Term Care Insurance Partnership Program), one of the best ways to provide for you future long-term care needs. With the baby boomers facing projected federal deficits, reductions in Medicaid spending, as well as rapidly rising health care costs, it is clear that alternative methods of financing long-term care support are critical. Long-term care insurance is preferred not just by consumers, but by the Commonwealth of Virginia and by the Federal Government because it is often the only option that can help keep clients out of the nursing home — by paying for home care. We’ve had many clients over the years who were forced to spend their final days in a facility simply because they ran out of money to pay for home health aides.

Elder Law Considerations
When shopping for a long-term care insurance policy, it is crucial to consider carefully the entire financial situation of both spouses and to consider the possible alternative of not purchasing long-term care insurance. Failure to consider these issues can result in purchasing too little coverage, which can actually be worse than purchasing no coverage at all.

For example, consider Joe and Linda, a married couple, facing Joe’s nursing home costs of $7,500 per month (a few hundred dollars lower than the average cost in Northern Virginia). Joe has $2,000 in monthly retirement income, as well as a long-term care insurance policy with a monthly benefit of $6,000 (based on a daily benefit of $200). Linda’s only income is Social Security of $700 per month. At first glance, the couple seems better off with the long-term care policy; they have an extra $6,000 per month, without which they could not afford the nursing home. They can pay for Joe’s nursing home and have an extra $500 per month to put towards Linda’s monthly expenses. Unfortunately, Linda’s regular expenses are approximately $2,400 per month, so with only $1,200 per month of income she is unable to make ends meet. Joe is not eligible for Medicaid assistance because his income (including the long-term care insurance benefit) is greater than the nursing home bill. In this example, Joe’s long-term care insurance policy does not provide enough of a benefit to allow Linda to have sufficient income to meet her needs. If Joe’s long-term care insurance policy provided a $7,500 monthly benefit ($250 per day instead of $150), all of Joe’s retirement income would be available for Linda’s monthly expenses, so Linda would still have enough income to live on.

If Joe and Linda had recognized this shortfall and decided to not purchase the long-term care insurance, or if they could not afford the increased premiums for the increased monthly benefit, they could instead use Medicaid assistance to help pay for Joe’s nursing home costs. Most of Joe’s $2,000 per month of income would normally be required to pay the nursing home expenses; Linda would keep her $700 per month. However, because Linda’s income is so low, the Medicaid rules would allow Linda to receive part of Joe’s income to help her with her monthly living expenses. Linda could receive a monthly maintenance needs allowance of up to $2,610, (including her income) which includes allowances for housing and utilities. Therefore, in this case, Joe and Linda would have the nursing home costs paid, and Linda would have $2,610 monthly for her support – more than enough for her regular needs.

The bottom line? Be sure to buy enough coverage, and be sure to buy it for the right spouse. It doesn’t make sense to pay insurance premiums and then be bankrupted by nursing home fees anyway because of insufficient coverage. As with other medical expenses, the inflation rate in nursing home fees is currently quite high. In 10 years, the cost of the nursing homes, at the current rate of inflation, will be about twice what it is today.

How Much Coverage Do You Need?
On average, someone age 65 today will need long-term care services for three years. Women need care for longer (on average 3.7 years) than do men (on average 2.2 years). Although twenty percent of today’s 65-year-olds will need care for more than five years, I don’t recommend anyone purchasing more than five years of long-term care insurance, because after moving to a nursing home, your family can commence the process of Medicaid Asset Protection so long as you have a good Long-Term Care Plan in place.

Purchasing Long-Term Care Insurance
Lifecare Financial Services, LLC is a Virginia insurance brokerage co-owned by Evan Farr and specializing in Medicaid-Friendly Long-Term Care Insurance (i.e., Partnership Qualified) and Medicaid-Friendly Annuities. Lifecare Financial is dedicated to assisting and supporting not just consumers, but also Elder Law and Trust & Estate attorneys with clients in Virginia who face the challenges of assisting their clients as they plan for long-term care.

Lifecare Financial offers a unique value proposition to referring attorneys and other professionals because it only works with the top financially rated companies for long-term care insurance and annuities. Referring professionals can be confident in knowing that the insurance products recommended by Lifecare Financial have been thoroughly vetted for financial strength, stability, and measurable experience in their relevant product line. For further information about Lifecare Financial, call 703-691-1888.

How Do I Know The LTC Insurance Company Won’t Go Bankrupt?
You don’t, and that’s why it’s important to deal only with top-rated companies. For your protection, it is the policy of Lifecare Financial Services, LLC to work only with insurance companies that have a Comdex Rating (a rating that combines the ratings from all of the top rating agencies) of at least 95%.

Conclusion
A good Long-Term Care Plan may or may not include long-term care insurance. As you make your decision, it is prudent to seek the advice of a Certified Elder Law Attorney. The Farr Law Firm can help guide you through the considerations of whether or not long-term care insurance makes sense for your Long-Term Care Plan.

If you are a veteran or spouse of a veteran and you need assistance in your home, or are living in or considering moving into an Assisted Living Facility or Continuing Care Retirement Community, you should contact a qualified elder law attorney to see if you qualify for the Veterans Aid & Attendance Special Pension Benefit or the Veterans Housebound Special Pension Benefit. The Farr Law Firm helps our clients who are Veterans, and their spouses, obtain this financial assistance when they are entitled.

What Is the Aid & Attendance Benefit Amount?

In 2008, a Veterans Aid & Attendance Pension can provide up to $1,554 per month to a qualified veteran; $1,842 per month if the veteran is married; and $998 per month for a surviving spouse of a qualified veteran.

Who Is Eligible for the Aid & Attendance Pension Benefit?

To receive the Aid & Attendance Special Pension Benefit or Housebound Special Pension Benefit, a veteran must have served on active duty, at least 90 days during a period of war.

Periods of War:

- World War II: December 7, 1941 – December 31, 1946
- Korean Conflict: June 27, 1950 – January 31, 1955
- Vietnam Era: August 5, 1964 – May 7, 1975; for veterans who served “in country” before August 5, 1964: February 28, 1961 – May 7, 1975
- Gulf War: August 2, 1990 through a date to be set by law or Presidential Proclamation

The veteran must have been honorably discharged. Single surviving spouses of such veterans are also eligible.

If younger than 65, the veteran must be totally disabled. If age 65 and older, there is no requirement to prove disability. However the veteran or spouse must be in need of regular aid and attendance due to: inability of claimant to dress or undress himself/herself, or to keep himself/herself ordinarily clean and presentable; frequent need to adjust special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which a normal person would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to feed himself/herself through loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.

Determination of need does not require that all of the disabling conditions in the list above exist, nor that there is a need for care 24/7. It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else.

Determination of need for the aid and attendance or housebound benefit is based on medical reports and findings by private physicians or that from hospital facilities. Authorization for aid and attendance or housebound benefits is automatic if evidence establishes that the claimant is a patient in a nursing home, or that the claimant is blind, nearly blind, or has severe visual problems.

Is Aid & Attendance Only For Low Income Veterans?

No, but this assumption is why this benefit is so widely misunderstood. If you speak to Veterans Service Representatives in most regional VA offices and ask them about the Veterans Aid & Attendance benefit, typically they will ask the amount of your household income. They will usually refer to a chart and will tell you that you earn too much income to receive the benefit. While the information they provide may be technically accurate, what they typically don’t explain is that “income” for Veterans Administration purposes is actually your household income minus your unreimbursed medical and long-term care expenses (sometimes called IVAP or “adjusted income”).

To be eligible to receive the Veterans Aid & Attendance monthly benefit, the veteran’s household cannot have adjusted income exceeding the Maximum Allowable Pension Rate — MAPR — for that veteran’s Pension income category. If the adjusted income exceeds MAPR, no benefit can be paid. However, if adjusted income is less than the MAPR, the veteran receives a Pension income equal to the difference between MAPR and the adjusted income.

Medical Costs and Long-Term Care Expenses

A special provision for calculating pension income reduces household income by 12 months worth of future, recurring medical expenses. These allowable, annualized medical expenses include items such as health insurance premiums, home care expenses, the cost of paying a family member or other person to provide care, the cost of adult day care, the cost of an assisted living facility, or the cost of a nursing home.

This special provision is what allows veteran households with income exceeding the annual MAPR to qualify for the Aid & Attendance Benefit. For example, a veteran household with income of $6,000 a month could still qualify for the Aid & Attendance Benefit if the veteran is paying $4,500 to $6,000 a month for nursing home costs. The claimant must submit appropriate medical evidence and evidence of recurring costs in order to qualify for this special provision. VA typically does not tell applicants about this special treatment of medical expenses or how to qualify for it.

This firm will provide its clients, at no charge, with a special Certification Report which will allow our clients to verify actual out-of-pocket and recurring medical expenses and long-term care expenses. We will also provide our clients with a Care Provider Report form to be completed by your care provider (assisted living facility, residential care provider, adult day care facility, home care provider, or similar provider). You will then include both of these reports with your application.

How is the Aid & Attendance Benefit Calculated?

The monthly award is based on VA calculations: 12 months of estimated future income, minus 12 months of estimated future, recurring and predictable medical expenses. Allowable medical expenses are further reduced by a deductible, to produce an adjusted medical expense which in turn is subtracted from the estimated 12 months of future income.

The new income figure derived from subtracting adjusted medical expenses from income is called “countable” income, or IVAP (Income for Veterans Affairs Purposes). This countable income is then subtracted from the Maximum Allowable Pension Rate — MAPR — and that result is divided by 12 to determine the monthly income Pension award.

Filing a Claim

Filing a claim for the Veterans Aid and Attendance Pension Benefit is complex and time-consuming. If you want to do it correctly, it’s important to get qualified assistance. Just knowing which form to fill out and how to complete it requires knowledge and skill. Even if the proper form is completed, failure to check a single box may result in a complete denial of your claim.

The application process includes: obtaining evidence of prospective, recurring medical expenses; and obtaining appointments for VA powers of attorney and fiduciaries. Often, qualification for this benefit involves the reallocation of assets and the shifting of income in order to qualify, and these reallocations may have significant impact on Medicaid eligibility.

Because many veterans who need the Aid and Attendance Benefit will eventually also need Medicaid, this process should not be attempted without the help of a qualified elder law attorney who thoroughly understands both the Veterans Aid and Attendance Benefit and the Medicaid program, as well as the effects each program has on the other.

The Asset Test

Ownership of certain assets or investments, particularly one which easily could be converted into income, might disqualify the claimant. An asset ceiling of $80,000 is often cited in the media as being the test, but this figure reflects VA internal filing requirements and is not an actual asset “ceiling.” In reality, because there is no dollar amount, any level of assets could block the award.

Asset Exemptions:

A primary residence, vehicles, and difficult-to-sell property are generally excluded from the asset test. However, some assets that are considered exempt by Medicaid (e.g., life estates) are considered countable by the Veterans Administration.

Asset Transfers:

VA will allow assets to be transferred or converted to income in order to meet the asset test, and there are no look-back periods or penalties assessed for transferring assets, as there is with Medicaid. However because the veteran or the surviving spouse might need to apply for Medicaid in the future, it is extremely important to consider future Medicaid eligibility when transferring assets or converting assets to income in order to obtain eligibility for Veterans Aid & Attendance.

The Farr Law Firm can help you avoid both Aid and Attendance rejection and Medicaid penalties associated with reallocating assets.