Legal Tools for Caregivers
If you are caring for a loved one, there are certain legal strategies and tools that you need to utilize to ensure that your loved one gets the best quality of care possible and has the highest quality of life. The tools and strategies come in two forms, the basics that everybody needs and then more advanced planning strategies.
There are certain basics that every caregiver needs to have in place for their loved one. Those basics include things like financial powers of attorney, medical powers of attorney, and personal care plans it is important to work with a certified elder law attorney to ensure that you have these documents in place, because these are the key tools that will allow you to provide and care for your loved one.
The first of the basic tools is a financial power of attorney. The financial power of attorney is a document that allows you to make financial decisions for your loved ones. For example, the financial power of attorney would allow you to pay the bills, work with the bank, move money around to protect against long-term care costs. The financial power of attorney is probably the most important document when it comes to caring for a loved one. It is not a document to be treated lightly or to skip over.
Not all financial powers of attorney are created equal. Many financial powers of attorney put limitations on what you can and cannot do as a POA. In fact, many of the financial powers of attorney actually put handcuffs on the agent, in fact not allowing them to do the things they may need to do when caring for a loved one. For example, many financial powers of attorney do not allow you to create an asset protection trust for a loved one. That is why it is important to work with a certified elder law attorney (CELA) when crafting a financial power of attorney.
the next key tool when caring for a loved one is a medical power of attorney. These may go by different names including patient advocate designation, advanced directive, or living will. What this document does is gives the ability to the person you've named to be able to make medical decisions for you, including the ability to remove you from life support. The defaulted in many states is that if you are in a vegetative state you are to remain that way unless there is some clear, written, evidence to the contrary. That is why having a medical power of attorney that includes the ability to be removed from life support is important. Typically, this is the document that doctors and hospitals will ask for.
Now one of the basic documents the many people do not have is a personal care plan. A personal care plan is a document that gives instructions to the financial and medical power of attorney on how best to care for you. The provides guidelines on what type of care do you want to receive, for example do on receive care at home or would you prefer to be in an assisted living. Another example would be what type of food do enjoy or what type of television programming would you want to watch. Now this document is not set things in stone, but it does provide a good guideline for your caregivers, whether those caregivers or family or professional caregivers.
Now that the basic documents are in place, now we need to talk about some advanced planning tools such as personal care contracts and asset protection trusts. But, before those are discussed, it is important to understand some governmental programs that are available to help pay for long-term care costs. There are two very important governmental programs. The first is Medicaid, which in many states can help pay for nursing home costs. However, Medicaid has a $2000 asset limit for single individual as well as a five-year look back period. The second governmental program is the VA benefit which can help pay for home care as well as assisted living. The VA benefit also has an asset test where, typically, if you have more than $30-$60,000 of countable assets you are not going to qualify. So, with these two governmental programs the next tools that will be discussed help us qualify for those governmental programs. They are not always necessary, but they can be helpful in qualification.
An asset protection trust is a great way to protect assets from the devastating cost of long-term care so the governmental benefits such as the VA benefit or Medicaid can help pay the cost of care and then the assets in the trust can be used to pay for additional services. Asset protection trusts will differ depending on the governmental program that they are set up to qualify for. For example, an asset protection trust set up to qualify for the VA benefit will have different rules and regulations around it then and asset protection trust set up specifically to qualify for Medicaid. That said typically a VA asset protection trust will also start the five-year look back. For Medicaid. So, a VA trust also will help you get qualified for Medicaid.
in addition to having an asset protection trust, it also may be important to have a personal care contract if you are providing care for a loved one because by you providing care to your loved one may be entitled to the VA benefit if they were veteran or surviving spouse. One of the qualifications for the VA benefit is long-term care costs. By setting up a personal care contract and having the veteran or surviving spouse pay a family member under the personal care contract, that could constitute long-term care costs for purposes of the VA benefit. In other words, if daughter was providing care for mom was a surviving spouse, mom could pay daughter under a personal care contract and now qualified for the VA benefit, which could pay mom an additional $1153 per month. Another important piece of the personal care contract is it if it's set up properly the money that mom moves to daughter would not be a divestment under Medicaid's five-year look back period.
Caring for a loved one can be confusing and frightening. It is important to use the right legal tools to make the process as easy as possible. Those legal tools include things like personal care plans, powers of attorney, asset protection trusts, and personal care contracts. It is important to work with a certified elder law attorney (CELA) to set up these documents and to make sure that you receive as much assistance from the governmental programs such as Medicaid and the VA benefit as possible.