Elder Law Considerations
by
Herbert D. Hinkle, Esq. and S. Paul Prior, Esq.
Hinkle & Fingles, Attorneys at Law
2651 Main Street
Lawrenceville, New Jersey 08648
(609) 896-4200 or (215) 860-2100
As parents of children with disabilities age, a number of factors
must be taken into account. First and foremost, is the question of
whether their assets will be exhausted by nursing home care, leaving
nothing to protect the child with a disability. Here are some
thoughts:
1. Long Term Care Insurance (LTCI). Standard health insurance and
Medicare will not pay for custodial care on an extended basis.
Separate insurance should be considered. Generally, such insurance
cannot be purchased by those in poor health or those over age 80. LTCI
can preserve assets and allow freedom of choice in terms of a
facility.
2. Transfer Rules. Medicaid will pay for long term care, but to
qualify an applicant cannot have more than $2,000 in countable
resources. Space does not permit a lengthy discussion, but assets can
be transferred in order to qualify; however, there are look-back rules
and potential negative tax consequences. There is, however, an
important exception to the transfer rules and penalties: assets can be
transferred to a disabled son or daughter (regardless of age) without
penalty. Tax issues still apply and the transfer must be made by way
of a special needs trust with additional features necessary to comply
with this unique federal law. Without a special needs trust, the
transfer will qualify the parents for Medicaid but disqualify the
child.
3. Durable Power of Attorney. How can a parent transfer assets if
he/she is now incapacitated? A power of attorney that is properly
drafted can enable a transfer to take place even if the parent is
incapacitated.
Visit the authors’ website for more information.
______
Hinkle, Fingles and Prior maintains a statewide law practice with offices in Lawrenceville, Cherry Hill, Paramus and Florham Park, New Jersey, and Bala Cynwyd and Plymouth Meeting, Pennsylvania. They lecture and write frequently on topics of law, aging, disability and estate planning and are available to speak to groups in New Jersey and Pennsylvania at no charge.
Comments and suggestions
for future articles should be mailed to: Hinkle & Fingles, 2651 Main Street, Suite A, Lawrenceville, New Jersey 08648-1012.
Copyright 2005
Herbert D. Hinkle. All rights reserved.
