and good evening.

Thank you so much for watching.

LIFE Ahead here on PBS Fort Wayne.

Of course this is our weekly program providing vital information to adults of all ages.

So we invite you to stay with us here in our LIFE Ahead Living Room.

We have a very special guest tonight and we'll be talking about planning for long term care and we'll talk about the process for planning your assets involved maybe involved in the role of Medicaid, which is always a very interesting subject and irrevocable trust among many other things.

So please give us a call.

The number is on your screen.

You can talk to us live on the air.

We can transcribe your question and of course if you're new to Fort Wayne we have a new system where you can ask questions is by texting and text number is on your screen as well.

And when you text please let us know at least your first name and the city you're calling from.

>> We'd like to give you a shout out and thank you so much for watching.

So our special guests and he's no stranger to the program.

It's Brian Nugent and he is a elder attorney, also a financial planner and it's great to have you back on LIFE Ahead.

>> So I'm not a financial planner.

Oh, no.

Oh, I thought you were a financial planner now elder law attorney and financial planner.

OK, for some reason I thought you're a financial planner as well because we're going to give it to somebody else.

OK, well very good.

I'm glad you took care of that, Mr.

Attorney and we got that ironed out but all right.

But we are going to be talking about perhaps some financial planning for long term care.

So I guess that's where I got that idea.

And first of all, Brian, according to the US Department of Health and Human Services, about 70 percent of older adults will need long term care at some point in their lives.

We're talking seven out of 10 of us.

That's right.

And so let's go ahead and figure out from your standpoint what defines a long term care patient and why would somebody need this type of care?

Sure.

When we think of long term care ,we think of someone that may be staying in a nursing home, someone that may be in a nursing home for rehabilitation so rehabilitation can take place in a nursing home facility or as part of that nursing home facility.

So long term care can be that rehab stay for an extended period of time.

It can also be a stay beyond rehab or somebody's health is failing and they go to a skilled facility, a nursing home facility.

So we think of long term care.

We think of outside of the home in a facility that's providing care for you.

>> Well, why should I consider long term care planning?

Because what my health insurance pay for this?

>> So that's a great question, a common misconception is that your health insurance Medicare will pay for your stay at a long term care facility and I think that that happens as we were just talking about is someone may go into to have a rehabilitation after a knee replacement hip replacement maybe they've had a fall something like that and they're going into rehab and the rehab happens to be the rehab facility happens to be adjacent to the nursing home.

And so folks have the impression I was there for rehab, my insurance, my Medicare paid for that stay.

>> So if I were to go to the nursing home at some point in the future that my health insurance will pay for it.

But no, your health insurance does not pay for a long term care stay different things may pay for your stay.

We were talking just before we went on the air about long term care insurance that could pay for your stay.

If you have that privately you could privately pay for your stay so out of your savings if you were taking funds from your savings selling your real estate to pay for your care could also be through the Veterans Administration or it could be through Medicaid.

>> OK, so we have two different things.

>> I think a lot of people get these confused Medicare and Medicaid right.

Can you define the differences?

>> Sure.

Medicare you can think of that as your health insurance.

OK, right.

So your Medicare is your health insurance.

>> We all get Medicare so at a certain age or if you have certain health conditions but we don't all get Medicaid.

Medicaid is a program that provides payment for ones care in relationship to this discussion tonight that pays for one's care.

Should we need help in the home as we age or should we need a long term care stay a stay at the nursing home memory care unit et cetera.

Medicaid would pay for that stay.

So there really distinct Medicare is like your health insurance.

Medicaid is a supplemental program.

It's needs based typically meaning your assets and your income or such that you don't have the resources, you don't have the the income to pay for your care.

So we would be relying on Medicaid to do that.

So is Medicaid actually a type of long term care insurance?

No, it's a governmental program OK?

Yeah, it's a governmental program that has very strict regulations that are tied to it.

Long term care insurance is a product that you would buy personally using an insurance agent that sells long term care insurance unrelated to Medicaid.

>> OK, apples and oranges.

Well and as you touched on, a lot of people believe Medicare will cover long term nursing home stays.

But yeah, it's the Medicaid side that actually that's correct.

What does it take to qualify for Medicaid?

So Medicaid generally looks at a few things.

Number one, what's your what's your health like?

What level of care is it that you need to be able to sustain yourself either at home or assistance with with your care you need at home or in a facility?

They call that a level of care assessment.

So there's an assessment done to determine how much care you require.

Are you appropriate for this type of care that Medicaid would be paying for ?

So that's one thing that Medicaid looks at.

Medicaid also looks at your income.

So is your income such that it's below a threshold that's set by the state every year is your income below that threshold so that you would need some additional assistance to provide payment for your care?

And then they also look at assets.

They look at how much money you have in the bank, how much you have invested the value of your home, those types of things they're looking at all of those things before they're determining whether or not you should be eligible to receive Medicaid benefits.

OK, I want to get more into that for a second, but we have a text question coming through and we'll get that and I don't see where they're calling from but it says can I get Medicaid while living at home?

>> You sure can.

>> So in Indiana we have a program called Pathways and Pathways is a Medicaid program used to be called waiver.

We now call it Pathways but that's a program that will provide payment for care in the home.

But we shouldn't be confused that if you are approved for the Pathways program that you'll be receiving around the clock care 24 hours a day that is definitely not the case.

You shouldn't expect to receive that if anything the care that's being provided for and paid for at home right now is being reduced.

But yes, if you qualify physically to require care in the home and your income as such that's appropriate for you to be receiving Medicaid benefits and your assets are such that it's appropriate for you to be receiving Medicaid benefits.

Yes, it is possible for Medicaid to provide payment for care in the home.

>> The program typically is done through an agency that's contracted with to receive those Medicaid dollars and the agency a licensed agency would be in the home and provide care for you.

So it is possible but we shouldn't look to that to provide care.

24 hours a day if you if you're at that point in your health care journey it sounds like wise words to me.

>> I'm sure there are a lot of rules when it comes to assets.

>> Can you talk about that so I was just mentioning about income and assets.

>> So Medicaid when they're looking to approve you for Medicaid they're looking at assets.

How much as a single person how much you have in your name.

So if we're looking at thresholds no more than two thousand dollars you can't have more than two thousand dollars in your name before you're eligible for Medicaid.

And we should talk about how you get to that point of having two thousand dollars as well.

But if you're a married person it's closer to one hundred and sixty thousand dollars that you could the maximum and that you could keep if you're a married person Medicaid takes a look at what you have as a couple.

If you have a higher amount you have to spend down to a figure.

You divide that in half unhealthy spouse to the spouse that needs the Medicaid.

We spend their money down to two thousand dollars.

>> The other spouse gets to keep around one hundred and sixty thousand dollars.

When you say the spend down, what do people normally usually spend that money on?

>> Well, they can use their money for several things that won't just qualify them for getting Medicaid.

>> So if they needed to make improvements to their home in order to be able to remain in the home, they could spend money on a vehicle.

Medicaid determines that you should be able to have the right for transportation if your health care requires so you'd be able to use the money for some means of transportation.

You can spend the money on anything that benefits you.

>> What you you have to be careful with is making a gift of money to someone else to say Oh I know that my health is changing so I'm going to gift my assets to my children and then I'm going to apply for Medicaid.

So when we gift if we give that away this is a cautionary tale.

If we give that away it creates a period of time during which Medicaid won't pay for your care.

So let's hypothetically say that figure is around seventy eight hundred so if you give away seventy one hundred dollars Medicaid will say we're not going to pay for your care for a period of one month.

So you have to be very cautious about just giving your money away and not getting something in return for the caveat to that gift as if you made the gift a period of 60 months, five years or more prior to needing that applying for Medicaid, needing those Medicaid benefits then in those instances when the money was out of your hands five years or more before applying we don't look at those assets as something the gift of those assets is something that might create a penalty for you denying you access to benefits through Medicaid for a period of time and you're referring to that five year look back period.

>> So there is a look back period, right?

I hear a lot about that.

I the look back period is simply within the period of 60 months prior to applying for Medicaid.

>> What have you given away if anything and whatever you've given away is divided by a no it's a deviser that that's the seventy hundred it changes every year.

That number really is irrelevant.

The point is there's a deviser that the state uses to apply toward how much money you've given away within the last five years.

So let's say the number is seventy eight hundred dollars the divisor that year seventy one hundred dollars.

The answer is one.

So if I've given away seventy eight hundred dollars within the last 60 months and I'm applying for Medicaid within 60 months so the look back was the five years the money I gave away was seventy eight hundred the divisor at that time is seven eight hundred there's something called a penalty period so it's a one month penalty period where Medicaid won't pay for your care.

So if your cost of care is twelve thousand dollars per month that gift that you made of seventy eight hundred dollars cost you not only the gift that you made but a twelve thousand dollars.

Somebody has to come up with that money to pay for your care.

So I would caution folks about gifting as a means of getting their assets down to those figures I was talking about earlier in order to qualify for Medicaid.

>> OK, all right.

We do have another next question coming in from Jerry in Auburn.

Hello folks in Auburn.

Jerry, thank you for your question.

Who is eligible for an irrevocable pardon me irrevocable trusts are irrevocable.

>> I just I just said it earlier and I'm trying to read it.

It comes out differently.

That's all right.

But I was going to actually segway into that subject anyway.

>> So thanks Jerry for asking.

Yeah, absolutely as well.

So irrevocable trust, irrevocable trust in the context of this conversation.

What will happen is that remember gifting I was just talking about Jerry what will happen is if you create an irrevocable trust and you create that trust five years or more before you need those Medicaid benefits, you put assets into that trust or that trust, then those assets would be preserved within that trust and that irrevocable trust in the context of this conversation we use them for other reasons.

But if it's a if the money is away from you for six months or more then you would be able to apply for those Medicaid benefits.

>> Your question was who who can do that or who is that open to?

It's open to anyone.

Anybody can do an irrevocable trust.

What I would encourage you to do is to speak with an elder law attorney, your counsel to make sure that it's appropriate for you.

Sometimes those trusts are appropriate, sometimes they aren't.

So it's difficult in the context of this conversation to say if it's appropriate for you or not but many times it is appropriate.

It's a it's something to explore.

It's a part of one's estate planning.

Part of one's trying to protect some assets and shelter assets if their care requires or if they're if they require care in the future.

>> Normally those trusts are created a time where you don't anticipate receiving care but you may require that in the future.

>> So give us one example if you don't mind.

I don't know how it would be inappropriate.

>> Well, it's inappropriate if you're giving if you're putting money into an irrevocable trust within five years of needing the care, OK, because that is recognized as a gift when it is appropriate.

Let's say I'm a farmer and I have farm ground and I know that I want to make sure that that farm ground goes to the next generation.

I have a lake house and I want to make sure that lake house goes to the next generation and I never want to sell that.

I don't want to have to be forced to sell that should my care should my health require care in the future.

Oftentimes we use irrevocable trusts to make sure that those assets, those precious assets are protected.

I see that very often the use very often with real estate, with investments I see money put in there as well.

So I'm not the financial adviser but we work with financial advisors to make those things happen.

>> OK, things that you couldn't put into a trust like that would be qualified money.

So a traditional IRA, an inherited IRA those assets could not go into the trust.

>> OK, all right.

Thank you for irony.

I'm sure we have another tax coming in from Huntingtown Karen.

Yes.

She's asking can I give away my money to my kids?

I heard that I can give away fifteen thousand dollars without it affecting me.

>> Great question.

Thank you so much, Karen.

So what you're really asking about is gift tax.

So right now if you you have actually nineteen thousand dollars per year in the year twenty twenty six that you could give away per year with no gift tax consequence so that's per year per person.

So if you have three children you could give each child nineteen thousand dollars per year with no gift tax consequences if you give to a person more than nineteen thousand dollars in the year twenty twenty six then you are to file something called a gift tax return.

So you as the person that made that gift are supposed to be filing a gift tax return with the IRS saying hey I gave away twenty thousand dollars instead of nineteen the good news is I suppose that you have as an individual around fifteen million dollars worth of credits that you can use for those gifts.

So for gift an estate tax.

>> So if you were to give to a child twenty thousand dollars in the year instead of nineteen the first nineteen we ignore the next one thousand dollars technically is subject to gift tax.

However you have credits up to 19 million rather 15 million before you would have to pay any tax on that.

So yes, you can make gifts to your children at fifteen thousand dollars sixteen thousand dollars nineteen thousand dollars with no gift tax consequence but that is really separate and apart from the conversation about protecting assets should your health require some type of care in the future?

That's what I was referring to earlier.

Karen, if you give that money away as a means of protecting your assets then applying for that Medicaid to pay for your care within five years you're going to create a penalty.

So I'm always very cautious about folks looking at doing their estate planning or protecting assets by gifting if you gift to a child it's great today but we don't know in the future what may happen with the child.

The child may have some type of a disability right that may develop in the future if the child passes and you're asking a child to hold the money for me but we can't do that with a gift.

I often hear people saying I'm going to have the child hold the money for me the issue is if that child has a divorce or they have debt issues, the money is gone.

So we have to be very careful about gifting why we're doing it and how it may affect you negatively at some point in the future.

That having been said, if you care to give to your children by all means do it understand that the gift means you have no control over it.

It's not your money anymore.

It's theirs to enjoy by all means.

Karen, go for it.

But yeah you can get fifteen thousand dollars a year you can give nineteen thousand dollars a year without having to worry about filing a gift a gift tax return.

>> OK another tax coming in from Doree of Fort Wayne and she is asking is it oh my goodness I can't believe my irrevocable Yeah.

>> Revokable irrevocable sounds like a great tool.

Why doesn't everyone use it and why isn't it more common?

>> That's a good question.

I I will say in my world I see being very common because I work with clients that are doing those regularly.

I think other elder law attorneys are working with folks that do that regularly.

>> I don't know why it isn't more common.

My guess is it may simply be because people aren't familiar with it.

>> They don't realize that you can protect assets that you have the ability to protect assets in advance of needing the care and maybe they haven't been exposed to that.

They haven't spoken with someone.

They haven't sought that advice to find out that this is a real opportunity for you to be able to protect assets.

Not only are we protecting assets, should you need that care but if there's litigation involved right.

The assets in that trust couldn't be pursued.

So we use those irrevocable trust for many reasons.

But in this instance typically those trusts are used to protect one's assets should you need to care in the future why people aren't using them?

I don't know.

I would encourage folks to do it if it's appropriate for them.

Yeah, if it's appropriate for them and that's why I'm saying they should speak with someone that practices in this area and don't make assumptions if it's right for you or not right for you seek counsel right.

>> Irrevocable trust seems like it could be a complicated subject.

So that's something definitely that you'd want to talk to someone like an attorney to make sure you iron all that out.

All right.

Let's get into questions regarding your primary residence.

I stayed in my house.

Give me a scenario.

Fifty some odd years is my house protected?

>> Depends if you're single or if you're married.

Oh, so if you're a single person and you need to leave your home, it's not protected.

>> No.

In that instance that would be a viable asset for Meicaid to look at if you're a married person and one spouse needs to leave the home and one spouse remains in the home then the spouse that's living in the home it's protected for them so it could be protected in that instance there are limitations on the value of the home if your home has an exceedingly high value although the value the prices of homes are going up left and right right now.

>> So but generally yes, if you're married your home is protected.

If one spouse is remaining in the home and the other spouse needs to leave the home and go to long term care if you're a single individual and you leave the home it becomes an available asset for Medicaid to take a look at.

That's why when we were talking about these those irrevocable trusts earlier, we may consider putting the house in it five years or more before we need that care so the home could be protected.

>> So it depends if you're single, if you're married, if the home could or could not be protected, should you need care .

OK, that's that's great to know.

How does someone actually begin planning for the potential long term care?

>> Where should they start?

Well, or should they start?

I think their age look at their age, look at their health .

>> So if you in your 50s and 60s people aren't necessarily thinking about long term care yet I see people when they're getting into their early seventies, mid 70s they're seeing friends health fail.

They're seeing maybe some friends or family members have passed.

They start to think about my gosh, I recognize that we spent a lot of money on dad's care or a lot of money on my sister's care as they aged and they needed that.

So I think typically I see people in their early 70s starting to think about long term care and the financial burden that goes with that.

That's number one.

Number two health.

So perhaps you have a history of dementia in your family.

Perhaps you have early onset dementia.

So in those instances maybe before the seventies we're starting to look at it.

So what's your health that we take a look at at your age that we take a look at and then frankly your assets as well?

Are there assets that justify setting up that irrevocable trust and there isn't a specific dollar amount that that is appropriate for you to set up a trust or not set up a trust is different for everyone.

Is there something that you want to protect?

If there is that discussion about an irrevocable trust is appropriate and I encourage everybody, educate yourself, ask the questions, gather the information and then make the decision if it is or isn't appropriate for you.

Those trusts require you to give up some level of control.

You can't have control over the assets in the trust and then say but I'm going to the nursing home nursing home.

I don't want you to use any of that money for my care or I'm going to go into memory care unit and I have control over the money in that trust and I don't want to pay for my stay at the memory care unit.

You give up some level of control when you're using those irrevocable trusts so they're a great tool but you have to have to have the right people around you to help setting those up.

You have to have the right people in place to access the money, invest the money inside that trust so they may be appropriate for you.

>> They may not be appropriate for you.

>> OK, looks like we have another call or actually a text from Karen and her town as she's asking do you recommend long term care insurance?

>> We actually talked about that earlier.

Yeah.

So long term care insurance is a great product.

It's a it can be a wonderful product.

It can pay for care in your home.

It can pay for care at a nursing home, a long term care facility, et cetera.

What I would say about long term care experience insurance rather in my experience fewer and fewer people are purchasing long term care insurance because it's very expensive and people are living a long time so the insurance companies are struggling with them paying out for that care.

So if you're serious about long term care insurance, shop for early shop for when you're very healthy, do not wait and then you have to do a return on investment calculation.

This is how much that cost of that policy is going to be and if I don't need care for thirty years thirty five years how much will I have paid understanding that those premiums will continue to rise because last year the year before I was seeing clients getting letters from their long term carrier saying we're going to see a 20 percent increase 30 percent increase in premiums and and we're not telling you it's done.

>> So I just don't see those policies as much as I used to because of the cost that's associated with them.

But if you can afford it and for the right policy, I think they're a great product.

>> All right.

You've been very informative that time that thirty minutes just flew by.

Great.

So thank you for spending some time with us.

Yes, absolutely.

And we got to have you back again.

>> All right.

All right.

We've hopefully we've provided you with a lot of food for thought and a very important subject as we always try to do on LIFE Ahead and you can watch this other LIFE Ahead programs of course on YouTube and on our website.

So until next time from all of us here at PBS Fort Wayne, we wish you a great and healthy LIFE Ahead.

Thanks for watching