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MEDICAID AND ESTATE PLANNING: HOW TO DEVELOP A PEACE OF MIND P. Haans Mulder, JD, MST, CFP® Cunningham Dalman, P.C. 321 Settlers Road Holland, MI 49423 (616) 392-1821 [email protected] What’s Next? Workshop

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Page 1: Whats Next Workshop

MEDICAID AND ESTATE PLANNING: HOW TO DEVELOP A PEACE OF MIND

P. Haans Mulder, JD, MST, CFP®Cunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) [email protected]

What’s Next? Workshop

Page 2: Whats Next Workshop

Background• Partner at Cunningham Dalman, P.C.• Masters in Tax, CFP®, and specialize in

estates/elder law and business planning• Cunningham Dalman, P.C. has been serving

the greater Holland/Zeeland since 1900

Serving the Holland area since 1900

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Overview• Medicaid process and eligibility rules• Example of how Medicaid planning works• Parts of an estate plan and process• Most common types of estate plans

Serving the Holland area since 1900

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Did you know?• 40% of people 65 years and older will

stay in a nursing home• Average cost to stay in a local nursing

home is $6-7,000/month

 

Serving the Holland area since 1900

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What is Medicaid?• State and federal program that pays

for medical treatment (including nursing home care)

• Oftentimes confused with Medicare

 

Serving the Holland area since 1900

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When does Medicaid apply?• Must be in a nursing home• Applies to people who are 65 years or

older, blind, or disabled• Must pass the income and asset tests

Serving the Holland area since 1900

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Who does Medicaid apply to?

• You cannot have enough income to pay the monthly cost of staying in a nursing home ($6-7,000 in this area)

Serving the Holland area since 1900

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Who does Medicaid apply to?

• A single person cannot have more than $2,000 in countable assets

• Can keep your home (it’s not in your trust) and a vehicle

• All other assets are countable

Serving the Holland area since 1900

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Who does Medicaid apply to?

• Asset test allows a married couple to keep their home (again, if it’s not in a trust), a vehicle, and one-half of their other assets

Serving the Holland area since 1900

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Example• Clients were husband and wife• Wife had to go to a nursing home• Didn’t stay in a hospital for three days

so Medicare didn’t cover stay• Had house, vehicle, and investments

Serving the Holland area since 1900

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Example• Could keep the house (because it was

properly owned) and their vehicle• Without any Medicaid planning, they

would have had to spend down one-half of their investments

Serving the Holland area since 1900

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Example• Drafted a trust that allowed them to

protect all of their investments (as opposed to just half)

• This provided peace of mind to the husband

Serving the Holland area since 1900

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Did you know?• You could save approximately $5,000

by having an estate plan prepared for $850

 

Serving the Holland area since 1900

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What is estate planning?• Process of planning for the future

management and distribution of your assets and your future medical care

• Includes documents such as wills, trusts, and powers of attorney

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Why is it important?• Reduces the cost of administration• Minimizes stress for family and friends• Determines who will receive your assets• Authorizes who will make your medical

decisions

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What is probate?• Probate is a court process to administer

a deceased person’s financial affairs• Required when someone passes away

with assets in his or her own name or fails to name a beneficiary

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Why avoid probate?• It is a public process • Can exacerbate family situations• Can be to administer (between 3-8%)• Takes time to complete (6-9 months)

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What are the most common estate plans?

• Basic plan includes wills (potentially with a trust) and powers of attorney

• For clients who do not have a house or are not concerned with avoiding probate

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What are the most common estate plans?

• Other plan includes a living trust, pour-over wills, and powers of attorney

• Plan is designed for clients with grown children and who desire to avoid probate

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What does the estate planning process look like?• Complete estate planning questionnaire• Attend a meeting that we discuss your

goals and the types of estate plans

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What does the estate planning process look like?

• Review draft of documents• Attend a signing conference• Change beneficiaries or/and fund your

trust

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Questions……

Serving the Holland area since 1900

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Thank YouP. Haans MulderCunningham Dalman, P.C.321 Settlers RoadHolland, MI 49423(616) [email protected]

Serving the Holland area since 1900