Webinar Transcript: “Long Term Care Costs and Options at Varying Degrees of Wealth”

Jonathan Shenkman

January 10, 2024

Webinar Transcript (1/4/2024): “Long Term Care Costs and Options at Varying Degrees of Wealth”

Host: Jonathan I. Shenkman, President & Chief Investment Officer of ParkBridge Wealth Management (Contact: jonathan@parkbridgewealth.com)

Presenter: Elizabeth Forspan, Esq., Partner, Forspan Klear, LLP (Contact: eforspan@forspanklear.com)

00:00:04.700 --> 00:00:24.279

Jonathan Shenkman: Good morning, Happy New Year, and welcome to the Park Bridge Wealth Management, Winter Webinar Series. This program is entitled Long Term, Care, Costs and options at varying degrees of wealth for those who don't know me. My name is Jonathan Shankman. I'm the president and chief invest and officer of Parkbridge wealth management in that role I serve in a fiduciary capacity. Tell my clients achieve their financial objectives.

00:00:24.280 --> 00:00:37.669

Jonathan Shenkman: the goal of my programs to bring professionals together to help them better serve their clients. This is done by educating attendees on the latest topics and wealth planning and by encouraging collaboration between a client's attorney, Cpa. And financial advisor, where appropriate

00:00:37.880 --> 00:01:05.340

Jonathan Shenkman: my practice, focus on working with high net, with families, businesses, and offer profits, I manage individual investment portfolios, trust accounts, corporate retirement plans and endowments, how my clients achieve their financial goals. In addition to the 20 or so events I run every year. I also do a fair amount of writing on the topics of investing and financial planning. You can read my work in a variety of periodicals, including Barry and Cnbc. Forbes, Kiplinger, the Wall Street Journal, the Cpa. Journal, and trust in the States Magazine to name just a few.

00:01:05.340 --> 00:01:20.889

Jonathan Shenkman: You can see all my work on my website at Parkbridge. wealth.com forward slash articles, or by following me on social media at Jonathan, on money. Additionally, you could check out my weekly, podcast which is also called Jonathan on money. And you could listen to that apple spotify or wherever you get your podcast

00:01:21.420 --> 00:01:44.870

Jonathan Shenkman: today, we're privileged to hear from Elizabeth for spend managing attorney at 4 span clear, based on Long Island, New York, Elizabeth practices in the areas of Elder Law Trust in estates and taxation. She regularly says, clients in achieving their Medicaid, planning goals in a tax efficient manner through practical and considerate planning techniques. Elizabeth speaks throughout the United States on various aspects of elder care, planning tax law and estate planning.

00:01:44.870 --> 00:02:07.840

Jonathan Shenkman: She has also been featured in New York magazine market watch, and has been quoted in New York Times prior to co-founding forcepan clear. Elizabeth was the managing attorney of a leading elder law and trust in Estates law firm. She also serves as a tax manager with Bernstein Young today Elizabeth will be speaking on long term care, costs and options at varying degrees of wealth. And with that introduction I'm now turn the program over to Elizabeth

00:02:08.039 --> 00:02:18.430

Elizabeth Forspan - Forspan Klear LLP: Jonathan. Thank you so much. You always have the most wonderful introductions. And II appreciate you having me on this morning. Good morning to all the early risers.

00:02:18.430 --> 00:02:41.470

Elizabeth Forspan - Forspan Klear LLP: I'm not typically one of them, but for you guys and for Jonathan, I'm happy to be this morning. And I apologize in advance. There are no slides today now. Some people will be happy with that, and some people will be unhappy with that. So for those of you who are not happy about no slides. I'm sorry. It's quick, and I don't wanna get bogged down in slides this morning, especially, cause I never usually move off of the first slide

00:02:41.710 --> 00:02:53.870

Elizabeth Forspan - Forspan Klear LLP: if you need my contact information Jonathan could provide it to all of you. Okay. So this morning. We're gonna talk about the different ways and the different options to pay for long term care. Now

00:02:54.470 --> 00:02:59.870

Elizabeth Forspan - Forspan Klear LLP: there are, of course, a number of different ways to pay for long term care.

00:02:59.940 --> 00:03:22.189

Elizabeth Forspan - Forspan Klear LLP: and when we speak about long term care. What am I referring to? I'm talking about nursing home care home care assisted living care. Alright. So this is something that all of us need to think about. Of course, for ourselves, we need to think about it for our loved ones. And of course, we have so many professionals on the line today, we need to think about it for our clients. Alright. So

00:03:22.450 --> 00:03:38.700

Elizabeth Forspan - Forspan Klear LLP: it's very interesting. What we're gonna talk of hopefully interesting, what we're gonna talk about today, that typical programs to pay for long term care that you might have thought about. We're not for higher net worth or moderate net worth people might actually be. So the first item that we're gonna talk about is

00:03:39.030 --> 00:03:45.630

Elizabeth Forspan - Forspan Klear LLP: private pay, all right, paying for care privately meaning you use your own funds to pay for care.

00:03:45.660 --> 00:03:49.310

Elizabeth Forspan - Forspan Klear LLP: Now, just to give a sense of the cost of care.

00:03:49.540 --> 00:04:13.370

Elizabeth Forspan - Forspan Klear LLP: What are we looking at? So in the New York area, typically these days for home care. So if you get, if you hire an Aid, home health attendant through an agency. You're looking about 35 to $40 per hour. Okay? And if we're talking about nursing home care in the downstate New York area, a a and surrounding areas. Of course we're looking at about.

00:04:13.530 --> 00:04:14.930

Elizabeth Forspan - Forspan Klear LLP: I would say.

00:04:15.050 --> 00:04:31.739

Elizabeth Forspan - Forspan Klear LLP: anywhere between, on average, about 8, about $18,000 a month, maybe $17,000 a month depending on the nursing home. Now, of course, none of us want our loved ones to be in the nursing home. No, no, none of us want to be in the nursing home. But unfortunately, unfortunately, the reality is is that

00:04:31.770 --> 00:04:45.669

Elizabeth Forspan - Forspan Klear LLP: many people do end up in nursing homes because the level of care that a person needs sometimes is too great to be provided for at home. So nursing home care $1718,000 a month. Very, very expensive, of course.

00:04:45.910 --> 00:04:59.960

Elizabeth Forspan - Forspan Klear LLP: now assisted. Living is like a whole different ball of wax, so assisted living. There is a huge range assisted, living on the cheapest side. You're looking at about 5,000 or $5,500 a month.

00:05:00.020 --> 00:05:04.950

Elizabeth Forspan - Forspan Klear LLP: but that could go all the way up to in excess of 20,000 a month, depending on the level of care

00:05:05.120 --> 00:05:13.199

Elizabeth Forspan - Forspan Klear LLP: now assisted. Living is not nursing home care and typically assisted. Living facilities are almost all private pay.

00:05:13.280 --> 00:05:18.949

Elizabeth Forspan - Forspan Klear LLP: When I say that, what do I mean? Most assisted living facilities do not accept Medicaid.

00:05:19.240 --> 00:05:39.670

Elizabeth Forspan - Forspan Klear LLP: There are a few they're called outs a Lp. Assisted living program in New York that do except Medicaid. Now, Medicaid will not pay for the entire bill. They'll pay for the health care portion. And then, typically the individual social security and pension, or some of their income will go to pay for the room and board. Okay, so

00:05:40.020 --> 00:05:42.660

Elizabeth Forspan - Forspan Klear LLP: assisted. Living is a huge huge range

00:05:42.850 --> 00:05:53.180

Elizabeth Forspan - Forspan Klear LLP: and depending on. You know, some people need memory care if they if family member or client needs memory care, that's gonna be. And it's private pay. It's gonna be very, very expensive. Alright.

00:05:53.210 --> 00:05:58.730

Elizabeth Forspan - Forspan Klear LLP: so when we talk about private pay, that's where you or your client

00:05:58.830 --> 00:06:01.899

Elizabeth Forspan - Forspan Klear LLP: pays directly either an agency

00:06:01.940 --> 00:06:08.460

Elizabeth Forspan - Forspan Klear LLP: or an individual home healthcare attendant. Let's say, if you're getting home care, or if they pay the nursing home directly.

00:06:08.580 --> 00:06:36.770

Elizabeth Forspan - Forspan Klear LLP: Now we have to be very, very aware of a lot of issues involved in private pay when we talk about private pay. This is typically for our higher net worth clients, because, as we mentioned $35 an hour or $40 an hour. That's a lot of money, so most of our clients are not going to fall in that category, or they will fall in that category for a period of time until they may be able to qualify for other programs.

00:06:37.140 --> 00:06:42.850

Elizabeth Forspan - Forspan Klear LLP: There are some very important issues that we need to to be aware of labor and employment law.

00:06:43.120 --> 00:06:58.440

Elizabeth Forspan - Forspan Klear LLP: So I'm not gonna get into the technical aspects of that today. But we all know many people who have private pay aids, and this applies to people who have private pay nannies for their children or housekeepers, etc.,

00:06:58.700 --> 00:07:04.709

and there are a host of labor and employment law issues that we need to be. That we need to consider

00:07:05.710 --> 00:07:10.590

Elizabeth Forspan - Forspan Klear LLP: when we're paying someone to take care of us, or to take care of our loved ones?

00:07:10.900 --> 00:07:19.030

Elizabeth Forspan - Forspan Klear LLP: Are we withholding for social security and medicare? Right, Fico. We all know what that is. Are we withholding for them? That's that's something that we need to do.

00:07:19.220 --> 00:07:25.150

Elizabeth Forspan - Forspan Klear LLP: Are we getting disability insurance? Are we paying into unemployment insurance for them?

00:07:25.170 --> 00:07:42.919

Elizabeth Forspan - Forspan Klear LLP: Are we making sure that they are working the requisite number of hours if they, working in excess of the allowable hours? Are we paying them overtime? Are we paying them time and a half? Are we satisfying the minimum wage requirements? So we know that minimum wage in New York is actually

00:07:42.920 --> 00:07:56.099

Elizabeth Forspan - Forspan Klear LLP: pretty high in relation to the rest of rest of the country. So these are issues that people don't typically think about. But they are real. And unfortunately, I have seen many situations where it doesn't really end that. Well.

00:07:56.640 --> 00:08:03.589

so right? So I'll give you an example. Someone works as an aide, for, for you know, a grandparent or a parent

00:08:03.640 --> 00:08:18.110

Elizabeth Forspan - Forspan Klear LLP: and you know the relationship ends for whatever reason, and then the 8 and the 8 is paid off the books, and then the 8 goes and files for unemployment. Right now they go to file for unemployment, and then they look it up and

00:08:18.160 --> 00:08:25.240

Elizabeth Forspan - Forspan Klear LLP: they're like, wait! You never paid into the system. Nobody ever paid in for you, and then it becomes a whole, a whole issue.

00:08:25.330 --> 00:08:40.099

Elizabeth Forspan - Forspan Klear LLP: of course, if God forbid! You have a home health attendant or an aid, and they fall or they get hurt on your property. Right? Is there? Disability, insurance? What's what's the story over there? So these are, these are real issues that we need to consider. Now, of course.

00:08:40.580 --> 00:09:08.390

Elizabeth Forspan - Forspan Klear LLP: when you pay an agency, a private agency where they're the employer and you're not the employer. These issues kind of fall aside. But the problem on that end is that's where the money that's where it gets really expensive. Right? That's where you see the 35 $40 an hour, whereas if you had a private pay aide where you were the employer. Maybe you'd be looking at $2225 an hour. Okay, so these are important issues. The other thing that we want to consider is the deductibility

00:09:08.390 --> 00:09:11.630

Elizabeth Forspan - Forspan Klear LLP: of the of what you're paying for your care.

00:09:11.810 --> 00:09:29.050

Elizabeth Forspan - Forspan Klear LLP: Right? So we all know about the medical expense deduction. And this is a real issue for our higher net worth clients. Right? How are they paying for their care? They're using typically their income right? Or they're taking

00:09:29.290 --> 00:09:48.530

Elizabeth Forspan - Forspan Klear LLP: excess distributions from their Irs. Typically, we'll see with our higher net worth clients. They're taking money out of their huge Iras. And of course, if it's not a rough Ira, there's going to be a tax associated with anything that they withdraw from their Ira. They're taking in excess of the minimum required distributions because

00:09:48.850 --> 00:09:56.409

Elizabeth Forspan - Forspan Klear LLP: the minimum required distributions may not even come close to covering what the cost of care is. So they're taking that out.

00:09:56.680 --> 00:10:11.089

Elizabeth Forspan - Forspan Klear LLP: And if they're paying an aid, let's say off the books. Okay. I know that's a very a very loose term. But I think we all know what that means. They're paying their aid off the books. Are they gonna be able to deduct that expense? No.

00:10:11.090 --> 00:10:26.950

Elizabeth Forspan - Forspan Klear LLP: okay. So if they're paying an agency for their care, or if they're doing this the right way, then it would be considered a qualified medical expense that they would be able to deduct against their adjusted gross Inc. Income. Of course, subject to the 7.5% floor. So the deductibility

00:10:27.100 --> 00:10:31.469

Elizabeth Forspan - Forspan Klear LLP: of the of what they are paying for their care

00:10:31.700 --> 00:10:36.359

Elizabeth Forspan - Forspan Klear LLP: is very, very important for our higher net worth clients. Okay.

00:10:36.720 --> 00:10:42.809

Elizabeth Forspan - Forspan Klear LLP: The other thing that we wanna consider for our our higher net worth clients is, if there's, you know, 2 spouses.

00:10:43.250 --> 00:10:54.650

Elizabeth Forspan - Forspan Klear LLP: and they're paying privately, which means they're using their funds to cover the cost of their care, and they're paying for one spouse who's ill. Call it the unhealthy spouse, and they use up

00:10:54.750 --> 00:11:15.759

Elizabeth Forspan - Forspan Klear LLP: a lot of their funds, and now they might not be so high net worth anymore, and they may not have so much left over for the other spouse when the other spouse will need care. So that's something. That we should all we should all consider because these are this, you know, someone needs round the clock care. This could be hundreds of thousands of dollars a year just for home care.

00:11:15.760 --> 00:11:25.900

Elizabeth Forspan - Forspan Klear LLP: Okay? And of course, we talked about nursing home care which could be in excess of 200,000. 250,000. And the reality is that in a nursing home, if you have a client in a nursing home.

00:11:25.900 --> 00:11:42.200

Elizabeth Forspan - Forspan Klear LLP: and you're paying. The client is paying privately. They're paying privately for the nursing home that $20,000 a month is for the nursing home. But you're or they're also gonna wanna have a private aide to come in, at least to give them breakfast in the morning to get them dressed, maybe to put them into pajamas at night. And so that's an additional expense.

00:11:42.300 --> 00:11:58.850

Elizabeth Forspan - Forspan Klear LLP: So just something to think about. Now, what is what? What is the next option for paying for care, of course. Long term care insurance, and many of you have heard me say this before. I'm a very big proponent of long term care insurance. I think it works really well. I myself have a long term care insurance policy.

00:11:58.990 --> 00:12:10.770

Elizabeth Forspan - Forspan Klear LLP: that's where you purchase a an insurance policy that would pay for care in the future if you needed it. Right? The type type of custodial, long term type care that we're talking about now.

00:12:10.770 --> 00:12:34.199

Elizabeth Forspan - Forspan Klear LLP: There's there's a lot changing in the long term care insurance world which I am not qualified to talk about. Jonathan is much more qualified to talk about that. He's helped a number of our clients with these issues. And they've all been exceedingly happy. So thank you, Jonathan. So there's the traditional long term care insurance, which is like, kind of like a user or lose a policy like it's almost like

00:12:34.390 --> 00:12:51.060

Elizabeth Forspan - Forspan Klear LLP: car insurance, right? You pay in. You pay the premiums, pay the pay premiums, pay the premiums for all these years. and then, if you need it right, if you are not able to do your 2 out of 5 or now 3 out of 5 activities of daily living. And you put in a claim.

00:12:51.060 --> 00:13:14.880

Elizabeth Forspan - Forspan Klear LLP: Then the insurance company will hopefully pay. That's kind of what I would refer to as the user or lose it. Traditional long term care insurance policy. And if you don't use it, or if your client doesn't use it, let's say they die prematurely, or let's say they live to a nice, ripe old age, and they're healthy, and then they just go to sleep one night, and they don't wake up, which is like kind of the way that most people want to go and then they never use their long term care insurance. Well, what happens to it? Well.

00:13:14.880 --> 00:13:32.200

Elizabeth Forspan - Forspan Klear LLP: well, it's gone right. That's the traditional policy. It's gone. A lot of people now are purchasing hybrid type policies where there's a life insurance policy with a long term care writer, or you know, there's some com, you know, some 2 components combined, where, if you don't.

00:13:32.550 --> 00:13:56.929

Elizabeth Forspan - Forspan Klear LLP: if you don't use a long term care insurance and there there's life insurance left over when you dive in your family can benefit from the life insurance. And I think that's really has gained a popularity these days. And there's, of course, issues with deductibility. We're not going to get into the duct deductibility of a long term care insurance premiums, just because there's not enough time today that could be a course in and unto itself. And I'm sure there have been many about it. Not sure if I've done it. Probably

00:13:56.930 --> 00:14:08.810

Elizabeth Forspan - Forspan Klear LLP: but so we're not gonna talk about deductibility. But there are certain deductibility issues of the premiums. If it's with a life insurance policy, etc. Now, I think that these are gaining popularity because most of the

00:14:08.810 --> 00:14:24.330

Elizabeth Forspan - Forspan Klear LLP: most of the insurance companies who were previously selling these long term care insurance policies. Those use it or lose it. Policies are not doing so anymore, particularly in this region. Because they didn't plan well, they didn't plan for people to be living this long

00:14:24.330 --> 00:14:41.939

Elizabeth Forspan - Forspan Klear LLP: and many people are living with dementia, and they live very long lives, and they need care for a a long, a long number of years. And so those long-term care insurance policies are really not popular anymore, and not that much available.

00:14:42.390 --> 00:15:03.609

Elizabeth Forspan - Forspan Klear LLP: a A and the other thing to note. And I'm sure many of you know this for yourselves, and also for your clients who call you up in a panic. Is that baked into those policies, into the to the contracts, and those use it or lose it. Traditional long-term care insurance policies that the insurance company reserved the right to raise premiums and boy, have they raised premiums? I had a client come to me this week

00:15:03.890 --> 00:15:07.049

Elizabeth Forspan - Forspan Klear LLP: that her policy was quadrupling.

00:15:07.520 --> 00:15:14.419

Elizabeth Forspan - Forspan Klear LLP: It was becoming so so expensive and they, of course, gave her different options to lower it. Now

00:15:14.910 --> 00:15:43.389

Elizabeth Forspan - Forspan Klear LLP: the long term care insurance is wonderful. But the problem that we see there's a couple of problems we see with long term care. Insurance is that oftentimes it just doesn't pay enough for the care. Okay, so people purchase a policy. Listen. There are some policies like those old John Hancock or Jen worth policies that people have from back in the day where it's gonna pay $600 a day, and it's an unlimited lifetime. There's no maximum, and there's a 5 inflation rider.

00:15:43.560 --> 00:15:55.670

Elizabeth Forspan - Forspan Klear LLP: Those are wonderful. They don't really exist that much. I mean, sometimes we see it, and I'm so excited and I jump out of my skin. I'm so happy for my clients. But those are few and far between.

00:15:55.700 --> 00:16:04.260

Elizabeth Forspan - Forspan Klear LLP: Typically, what we see is that the clients will come in with policies that will pay $200 a day, or a hundred $50 a day.

00:16:04.780 --> 00:16:36.559

Elizabeth Forspan - Forspan Klear LLP: Something in that in that area. Well, we already talked about the cost of care. You know, you're looking at potentially 350, or $400 a day for for private pay. Care maybe more than that, if you need a split shift, right? So there's just to take a step back. There's 11, which is a 24, 7 aid right? Where, if someone needs live in care, it means they don't need their aid to be awake and up with them during the night. Alright. And so what that means is very, in a very, very strangely, a 24 h aid

00:16:36.860 --> 00:16:42.550

Elizabeth Forspan - Forspan Klear LLP: can actually just be paid for 13 h under the labor laws. How does that work?

00:16:42.610 --> 00:16:59.400

Elizabeth Forspan - Forspan Klear LLP: I try to explain this to my clients all the time, and they're like, wait, Liz, explain that to me against. I gotta explain it. You can have a 24 h aid or a live in aid, but they're only paid for 13 h because a live in aid is an aid that has 8 h of uninterrupted sleep

00:16:59.830 --> 00:17:04.050

Elizabeth Forspan - Forspan Klear LLP: and 3, 1 h meal times. Okay.

00:17:04.329 --> 00:17:12.170

Elizabeth Forspan - Forspan Klear LLP: So the 8 h of sleep and the 3 h of meal. Time is 1124, minus 11 is 13.

00:17:12.280 --> 00:17:24.389

Elizabeth Forspan - Forspan Klear LLP: So typically, if a client has a live in aid. they will actually be paying for 13 h, and not 24 h. But there are some clients who need a split shift.

00:17:24.450 --> 00:17:44.900

Elizabeth Forspan - Forspan Klear LLP: Right? That means, and we will see this in our life. They that the client or the patient that the person needs an aid to be up during the night, because that, you know, individual gets up during the night. They need to go to the bathroom, or they have dementia, and they might be wandering. And so a split shift is where you have 2 aids each day 12 and 12.

00:17:45.050 --> 00:17:54.700

Elizabeth Forspan - Forspan Klear LLP: Now, if you're paying privately for that, or if you're using your long term, care insurance for that, that's a lot of money 24 times 35 or $40 an hour. That's a lot of money.

00:17:55.000 --> 00:18:00.620

Elizabeth Forspan - Forspan Klear LLP: So a big problem with the long-term care insurance that we see is that people just did not have sufficient coverage

00:18:01.230 --> 00:18:29.649

Elizabeth Forspan - Forspan Klear LLP: the benefits were just were are just not enough. And by the time people realize this it's already too late, because in order to qualify for additional insurance or for long term care insurance, you need to go through medical underwriting. It's like life insurance right. And if you're older and you have some health considerations, let's say the person has diabetes or heart disease, something like that. They may not qualify. They're typically not going to qualify for long term care insurance. And so that's the second big problem that we see. The second big problem is that

00:18:29.720 --> 00:18:36.870

Elizabeth Forspan - Forspan Klear LLP: it's just it's too late. Many people just wait and they wait

00:18:36.930 --> 00:18:43.859

Elizabeth Forspan - Forspan Klear LLP: to get the long term care insurance. And then they turn a specific age, or they have some health consideration, and they can no longer qualify.

00:18:44.290 --> 00:18:58.860

Elizabeth Forspan - Forspan Klear LLP: And another thing that we see is that people just say it's just too expensive right now that we see that the premiums are going up tremendously, just like my clients who whose premiums had quadrupled. They just say, you know, I don't wanna pay these premiums anymore. I just can't afford it with all my other expenses.

00:18:59.240 --> 00:19:16.390

Elizabeth Forspan - Forspan Klear LLP: I I don't remember a time that I had ever told a client to cancel their long term care insurance policy. Because I do think when when we get into the nitty gritty of the planning it, it works to have it for a period of time. Not gonna get into that today. Unfortunately.

00:19:16.460 --> 00:19:23.970

Elizabeth Forspan - Forspan Klear LLP: so long from care. Insurance very important, not always available. Not always enough.

00:19:24.250 --> 00:19:34.500

Elizabeth Forspan - Forspan Klear LLP: Okay, if you're paying $150 a day and the cost of your cares for $100 a day. It was great that you had long term care insurance, and will help to phrase some of the costs. But yes, you still have a huge shortfall.

00:19:34.830 --> 00:19:51.219

Elizabeth Forspan - Forspan Klear LLP: So then we talk about the third option, which is not an option, so I shouldn't even call it the third option, which is Medicare, right? We know that most people at the age of 65 are going to qualify for Medicare. It's a health insurance program for nearly all Americans.

00:19:51.340 --> 00:19:53.130

And

00:19:53.410 --> 00:20:20.759

Elizabeth Forspan - Forspan Klear LLP: I it's wonderful what Medicare is wonderful. But it's health insurance Medicare does not pay for long term care. Medicare may pay for rehabilitation after a hospitalization, right? So we know that if someone goes to a hospital. If someone's let's call it checked into a hospital for at least 3 days, and then they need to go to rehabilitation. They have to go to a rehab facility that Medicare will pay for some of their of their of their rehab, but not long term care.

00:20:21.300 --> 00:20:28.480

Elizabeth Forspan - Forspan Klear LLP: Medicare may pay up to 100 days in a rehabilitation facility, or to receive rehab May

00:20:28.760 --> 00:20:44.929

Elizabeth Forspan - Forspan Klear LLP: May, because not everybody is going to qualify for the 100 Days, if their physical therapist or occupational therapist deem that they have plateaued, and they are no longer getting any better, or they're not improving or making progress. Then Medicare will stop paying.

00:20:45.110 --> 00:20:55.209

Elizabeth Forspan - Forspan Klear LLP: And the other thing to note is that even if Medicare does pay the 100 days, there is a copayment, a very large copayment that was $200 that starts at day 21.

00:20:55.220 --> 00:20:59.139

Elizabeth Forspan - Forspan Klear LLP: So $200 a day. That is so.

00:20:59.250 --> 00:21:10.639

Elizabeth Forspan - Forspan Klear LLP: we have to. We have to consider that now. Most of our clients if they're in rehab, and they're in their medicare days, most of them, their Medicare supplemental will cover for day 21 through 100 the copayment.

00:21:10.750 --> 00:21:22.250

Elizabeth Forspan - Forspan Klear LLP: For example, we have Cl. Most of, I would say most of our clients are are older clients have a united healthcare arp as their supplemental. Most of them were in the F plan, F, like Frank.

00:21:22.430 --> 00:21:31.110

which you can't get anymore. I think it turned into the G plan that's going to cover in most cases the day 21 through 100 copayment.

00:21:31.200 --> 00:21:35.520

Elizabeth Forspan - Forspan Klear LLP: But Medicare, after that is not going to be paying. Okay.

00:21:35.650 --> 00:21:45.780

Elizabeth Forspan - Forspan Klear LLP: it's a a common misconception. But after 100 days are up, Medicare is not going to be paying anymore and earlier, if the person has been deemed to not be improving. Okay?

100

00:21:46.060 --> 00:21:53.119

Elizabeth Forspan - Forspan Klear LLP: So then, we're left with the Medicaid program. That's number 4 here, or maybe I should say 3, a.

101

00:21:53.470 --> 00:21:55.269

Elizabeth Forspan - Forspan Klear LLP: the Medicaid program.

102

00:21:55.380 --> 00:21:58.280

Elizabeth Forspan - Forspan Klear LLP: So we typically think of Medicaid

103

00:21:58.380 --> 00:22:12.869

Elizabeth Forspan - Forspan Klear LLP: as a program for poor people. Which is what it was designed to be. It was designed to be a health insurance program for indigent people it has turned into a program for long term care for not so indigent people.

104

00:22:13.590 --> 00:22:22.709

Elizabeth Forspan - Forspan Klear LLP: And the theory is a theory that the Government has is that if you are willing to impoverish yourself, we are willing to pay for your care.

105

00:22:22.920 --> 00:22:26.579

Elizabeth Forspan - Forspan Klear LLP: Now, what we're not gonna get into today is the 5 year. Look back.

106

00:22:26.670 --> 00:22:34.060

Elizabeth Forspan - Forspan Klear LLP: and how you need to do planning in advance. Right? We have to plan with our clients in advance for nursing home care. Of course.

107

00:22:34.180 --> 00:22:49.939

Elizabeth Forspan - Forspan Klear LLP: home care in New York. Still, I'll give you a little bit of an update. Home. Care still has no look back. We know that, or those of you who have seen me. Give a similar presentation, or see me present on the update Medicaid update before. Know that in 2020, in April of 2020

108

00:22:50.090 --> 00:23:03.739

Elizabeth Forspan - Forspan Klear LLP: they change the rules where they were going to impose a 2 and a half year. Look back for home care, meaning they were, gonna go back and look at all transfers that you made in the 2 and a half years prior to applying for Medicaid home care for a home from health, home, health, assistance.

109

00:23:04.100 --> 00:23:04.910

Elizabeth Forspan - Forspan Klear LLP: Now

110

00:23:05.240 --> 00:23:15.710

Elizabeth Forspan - Forspan Klear LLP: that was a huge earthquake, because New York, unlike pretty much every other State, almost every single other State, did not have a look back for home care, meaning you could transfer assets on

111

00:23:15.890 --> 00:23:21.929

Elizabeth Forspan - Forspan Klear LLP: November thirtieth and December first. You'd be eligible for Medicaid. No, look back whatsoever.

112

00:23:22.040 --> 00:23:40.739

Elizabeth Forspan - Forspan Klear LLP: and they change that in April of 2020, but because of Covid it has been pushed back. The implementation has been pushed back, push back, push back where today there is still thankfully. No, look back for home care now. It is set to go into effect. April first, 2024, which is in less than 4,

113

00:23:40.740 --> 00:23:52.879

Elizabeth Forspan - Forspan Klear LLP: 3 months from now. But we anticipate it to be further pushed back. But as of today, that's what it is. So why do I mention this? If you guys have any clients.

114

00:23:53.500 --> 00:24:00.870

Elizabeth Forspan - Forspan Klear LLP: If you have any clients who you think might need home care within the next year, it'll be better to apply before April than after April. Okay?

115

00:24:00.950 --> 00:24:07.179

Elizabeth Forspan - Forspan Klear LLP: So the Medicaid program is for the indigent. But what does that mean? People create trusts.

116

00:24:07.370 --> 00:24:12.519

Elizabeth Forspan - Forspan Klear LLP: they create an irrevocable trust, one that has been tested, by whose provisions has been tested by Medicaid.

117

00:24:13.070 --> 00:24:26.899

Elizabeth Forspan - Forspan Klear LLP: they transfer their home into the trust, they transfer their brokerage accounts into the trust, they transfer their non qualified annuities into the trust. That is a possibility. If it's a grant to our trust which pretty much almost a hundred percent of the time these will be Grantor trusts.

118

00:24:27.140 --> 00:24:32.560

and they wait the requisite period of time, and then they're eligible for Medicaid.

119

00:24:32.620 --> 00:24:40.449

Elizabeth Forspan - Forspan Klear LLP: Now it sounds very easy. It is not okay, because when we do this plan, that we have to be very mindful of a number of things.

120

00:24:40.680 --> 00:24:53.139

Elizabeth Forspan - Forspan Klear LLP: The tax considerations which I'll talk about in just a moment. The financial considerations. Are we taking assets and putting them into a trust and taking them off the table for our clients? Those assets might be generating income

121

00:24:53.240 --> 00:25:17.619

Elizabeth Forspan - Forspan Klear LLP: is the trust gonna allow the clients to have income. The grantor? Is it going to give income to the grantor? Is that gonna create a Medicaid problem? Well. So we need to think about not only how it's going to be impacted in the Medicaid sense, but how will the client is going to be impacted in a financial sense, will they have enough to live off of in the next number of years before they need care? Right? People are typically doing this planning when they're still relatively healthy.

122

00:25:17.810 --> 00:25:47.680

Elizabeth Forspan - Forspan Klear LLP: and so they can't necessarily divest themselves of all their assets and all their income and put it in a trust for some possibility that in the future they might need Medicaid. We have to figure it out, and we have to plan in a very thoughtful way to make sure that the client will have enough to to use over the next number of years before they might need Medicaid. And that's why II always say this, and I know I sound like a broken record. But if you are doing Medicaid planning for your clients.

123

00:25:48.010 --> 00:26:02.109

Elizabeth Forspan - Forspan Klear LLP: you must be doing it together with the Financial Advisor. There. There is just no way around it, because, as attorneys, you know, we're qualified for some things. Not much. But we're qualified for some things. But we're not.

124

00:26:02.570 --> 00:26:07.319

We're not financial people, typically right? We're not financial advisors.

125

00:26:07.380 --> 00:26:18.019

Elizabeth Forspan - Forspan Klear LLP: Clients ask me financial questions all the time. And I say, that is a financial consideration. And that's where we need to bring in your advisor. We need to see what this is gonna look like over the years.

126

00:26:18.330 --> 00:26:22.289

Elizabeth Forspan - Forspan Klear LLP: So that's very, very, very important.

127

00:26:22.300 --> 00:26:41.509

Elizabeth Forspan - Forspan Klear LLP: And then, of course, when we do the planning, and we divest our clients of assets, so that at 1 point in the future they may qualify for Medicaid and have the government pay for some or all of their care. We need to make sure we're doing it in a tax efficient manner. Right? If we are transferring assets into a trust, are we maintaining the basis? Step up, which is very important?

128

00:26:41.510 --> 00:27:00.760

Elizabeth Forspan - Forspan Klear LLP: Everybody's going mad and it all crazy over revenue ruling 2023. Dash 2. That should not be an issue. You should still be able to obtain the basis step up so long as there are provisions in that trust that would have the assets included in the in the taxable state of the settler

129

00:27:01.230 --> 00:27:03.340

Elizabeth Forspan - Forspan Klear LLP: a limited power of appointment

130

00:27:03.350 --> 00:27:10.579

Elizabeth Forspan - Forspan Klear LLP: income to the grand tour. So we have to be very mindful of the way that we draft these trusts

131

00:27:10.670 --> 00:27:22.429

Elizabeth Forspan - Forspan Klear LLP: to make sure that if the trust needs to be revoked, even though it's an irrevocable trust that it can be revoked. There's a way to do that in New York. And that we also maintain a basis. Step up

132

00:27:22.900 --> 00:27:26.880

Elizabeth Forspan - Forspan Klear LLP: now, you might say to me, but wait a minute. If we're going for the basis, step up

133

00:27:27.160 --> 00:27:33.990

Elizabeth Forspan - Forspan Klear LLP: by definition, you only get a basis. Step up a step up on assets that are included in your taxable estate, and that's why.

134

00:27:34.230 --> 00:27:44.990

Elizabeth Forspan - Forspan Klear LLP: And that's a great point. But that's why we're talking about people at varying degrees of wealth, right? We talked about the private pay. We talked about the people on long term with long term. Now we're talking about the people who

135

00:27:45.270 --> 00:27:53.929

Elizabeth Forspan - Forspan Klear LLP: we don't care about the estate inclusion, right? We want the estate inclusion for the basis. Step up. But we're not worried about estate taxes

136

00:27:53.930 --> 00:28:16.309

Elizabeth Forspan - Forspan Klear LLP: because they're under the 6.5 million dollars that or whatever whatever it is. In that in in that particular jurisdiction. They're under the 13 million dollars on the Federal level, and they're under the State level in terms of their net worth. So in those cases, we wanna be mindful to put our put our priority

137

00:28:16.360 --> 00:28:21.000

Elizabeth Forspan - Forspan Klear LLP: on the future capital gains tax issues and the income tax issues

138

00:28:21.010 --> 00:28:27.289

and achieve a a basis step up. So we wanna always be doing it in a very, a tax efficient manner.

139

00:28:27.520 --> 00:28:37.539

Elizabeth Forspan - Forspan Klear LLP: And we want to be doing it in a financially efficient and mindful manner. And so that's so, that's that on the on the Medicaid.

140

00:28:37.880 --> 00:28:39.210

Elizabeth Forspan - Forspan Klear LLP: No, that was very brief.

141

00:28:39.290 --> 00:29:07.069

Elizabeth Forspan - Forspan Klear LLP: assisted living, as I mentioned, typically, there are not going to be many assisted living facilities that take Medicaid. And so Medicaid is generally generally, but not always, going to be a private pay situation. There are situations where we have clients that are in an assisted living facility, paying the assisted living facility privately, but they also need an aid, and we have been able to actually get them Medicaid for the aid. Now that is not an available

142

00:29:07.100 --> 00:29:13.050

Elizabeth Forspan - Forspan Klear LLP: option in every assistive living facility. We have to look at the contract and make sure that the services are not duplicative.

143

00:29:13.080 --> 00:29:16.639

but in many assisted living facilities. That is an option.

144

00:29:16.930 --> 00:29:34.300

Elizabeth Forspan - Forspan Klear LLP: The next question that you might have as well if they've divested themselves of their assets so that they can have Medicaid pay for the aid. How are they paying for the long term for the assistant living facility? And of course that is something that we need to be mindful of in the planning. We need to put aside a specific pool of money.

145

00:29:34.640 --> 00:29:45.710

Elizabeth Forspan - Forspan Klear LLP: maybe not to the Trust, because we can't have money from the trust. Go back to the individual if they wanna qualify for Medicaid. But maybe we give a set amount of money to the children. Oh, I said it, I know

146

00:29:46.030 --> 00:30:14.300

Elizabeth Forspan - Forspan Klear LLP: But we have to think about every case differently. Every case has to be thought of differently, because everybody's family situation is different. Everyone's financial situation is different. Their assets are different, and their income is different. We may have clients with a huge amount of assets, but their income is not what you would think it is. It's kind of on the low side, or we may see clients who have low assets, but very high income, because they have these huge pensions. Let's say they were a retired cop

147

00:30:14.300 --> 00:30:44.120

Elizabeth Forspan - Forspan Klear LLP: or a retired teacher, so every situation needs to be thought of differently. So in a half hour, I think I just gave you, I think, the top 4 or 3 and a half ways to pay for long term care it has been a pleasure, as always. If anybody needs anything or has any further questions, I would be happy to answer them. Not now, because II know we don't take questions. But everyone can email me. It's E. 4 span at 4 span clearcom. Jonathan. Thank you so much. It's been a pleasure as always

148

00:30:44.230 --> 00:31:05.229

Jonathan Shenkman: great. Thank you so much, Elizabeth, and if anyone has any specific questions, new business opportunities, or any other issues they'd like to discuss, please feel free to reach out directly to Elizabeth or myself, where appropriate. And I'll be sure to include her. Her contact information in the follow up email of this program. As I mentioned at the onset. The goal of these programs stay up to date on timely wealth management, related topics.

149

00:31:05.230 --> 00:31:30.190

Jonathan Shenkman: and to collaborate where appropriate. And I think we can all agree that the clients were best prepared are the ones who are served by team of knowledgeable advisors. 3 more quick items before I let you go first. My Winter Webinar series continues on January sixteenth, on the topic of use it or lose it, securing the use of 13 million dollar plus Federal estate gift and Gst. Tax exemption before sunset featuring Jay Sharp and John Kiely, both attorneys at Law Firm Mcdermott

150

00:31:30.190 --> 00:31:37.679

Will and Emory Llp. I'll send out invitation to this program in the coming days. In the meantime, if you have a friend, colleague, or client

151

00:31:37.680 --> 00:32:04.509

Jonathan Shenkman: who would like to be notified of my upcoming Webinars, they can email me with the word webinar in the subject line, and I'll add them to my webinar distribution list. My email is Jonathan at Parkbridge wealth.com. Second, you could follow all my work on Twitter and Instagram at Jonathan. I'm money. You could also listen to my weekly podcast called Jonathan on money which is available on apple spotify or wherever you get your podcast and you could watch my new daily financial planning clips by following me on Youtube at Jonathan on money as well.

152

00:32:04.510 --> 00:32:14.850

Jonathan Shenkman: Third, please take 30 s to fill out my survey at the end of this program. It helps me improve my webinars and provide timely and interesting content to attendees, and I thank you in advance for that.

153

00:32:14.920 --> 00:32:19.930

Jonathan Shenkman: And with that this concludes today's session. Please stay safe and healthy and have a wonderful day, everybody.