Estate Planning For The
21st Century
Presenter’s Name
Event Date
IMPORTANT SLIDE INFORMATION

NAELA Members

The following slides were graciously provided by
NAELA Member Rajiv Nagaich from Washington
state. NAELA members have permission to reuse
these slides for their own firm’s purpose.


Use of the NAELA logo is limited to active NAELA
members only.
The slides were created to provide a foundation for
presenting information on Estate Planning and Long
Term Care Planning and MAY NOT provide accurate
or current information for your specific state

To ensure the accuracy of your presentation, you MUST
review and update the contents of the slides with your
state’s legal requirements
Traditional Notions of Estate Planning
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Who gets what when I die
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Who manages my checkbook and health needs
when I can no longer attend to those needs
myself
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Do I want to be kept alive if I am comatose and
cannot communicate
ASSUMPTIONS
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Go to sleep and not wake up
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My agents will know what to do
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Biggest issues are:
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Providing for quality of life
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Avoiding probate
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Avoiding estate taxes
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Making it easy for beneficiaries
Assumptions do not apply today
We are living longer – but not necessarily living
healthier
 One out of eight Americans over 65 dependent
on others for day-to-day living activities
 One out of every two Americans over 85
dependent on others for day-to-day living
activities

Source: Alzheimer’s Disease Facts and Figures, 2007, Alzheimer’s Association
Issues Created
Financing health care costs, many of which may
not be covered by Medicare or health insurance
 Managing Quality of Life
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Financing Long Term Care
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Medicare / Health Insurance
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Cover acute care needs
Do not cover chronic care needs
Unless . . .
Where Medicare or Health Insurance leave off:
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Private assets (including Long Term Care Insurance)
VA
Medicaid
Limitations
Long Term Care Insurance is NOT widely
embraced
 VA and Medicaid benefits are limited
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VA Benefits

Aid and Attendance – non-service connected
disability is dependent upon your qualification*
up to:

Veteran: $1,645 per month
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Spouse of Veteran: $1,057 per month
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Married Veteran: $1,945 per month
*http://www.canhr.org/factsheets/misc_fs/html/fs_aid
_&_attendance.htm
Medicaid Benefits
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Food, shelter and medicine
Income used as deductible towards care costs;
$55.45 / $60.78 /$90.00 per month personal needs
allowance [state specific, changes annually – please
update with your state’s requirements]
All clients treated the same
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DME
Semiprivate rooms
Limited personal care needs
What is missing?
- Eligibility is Not Automatic
ESTATE PLANNING
VA Eligibility
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Service Requirements
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90 days in active duty with 1 day in war time period
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World War I: April 6, 1917, through November 11, 1918
World War II: December 7, 1941, through December 31, 1946
Korean War: June 27, 1950, through January 31, 1955
Vietnam War: August 5, 1964 (February 28, 1961, for
veterans who served "in country" before August 5, 1964),
through May 7, 1975
Persian Gulf War: August 2, 1990, through a date to be set by
Presidential Proclamation or Law.
24 months if enlisted after September 7, 1980
VA Eligibility
65 years old or permanently disabled
 Income less unreimbursed medical expenses less
than:
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$1,945 for married veteran
$1,645 for single veteran
$1,057 for spouse of veteran
VA Eligibility
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Net Worth:
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Unfortunately, there is no asset limit set by law, and
the determination of eligibility can be made at the
discretion of a VA caseworker.
All personal goods are exempt from the net worth and
include:
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the home in which claimant lives;
a vehicle used for the care of the claimant; and
household goods and personal effects such as clothes, jewelry
and furniture.
Resource Test
[state specific, changed every year – please update with your state’s requirements]
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Married Applicant:
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$2,000
Spouse of Applicant
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House (any value)
One automobile (any value)
Between $74,820 and $109,560
Prepaid funeral plan
(irrevocable and of reasonable
value) – burial plots for family
members
$1,500 cash value in life policy
Personal property (any value)
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Single Applicant:
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$2,000
House (with equity of up to
$500,000 [$750,000 in some
statee])
One automobile (any value)
Prepaid funeral plan
(irrevocable and of reasonable
value) – burial plots for family
members
$1,500 cash value in life policy
Personal property (any value)
BUT- Assets subject to state
Medicaid lien
Who Should Worry?

Middle class Americans

Between $50,000 and $1,500,000 in assets
Estate Planning Solutions
Pre-crisis options
 Crisis planning options

Pre-Crisis Planning
Utilize Special Needs Trusts
 Utilize Income Only Trusts
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Typical Estate Plan (married)
Decedent’s
share
Surviving
Spouse’s share
Surviving
spouse owns
all assets
Entire estate subject to spend down to
access.
Way Around the Problem
Decedent’s
share
Surviving
spouse’s share
To Testamentary
Special Needs
Trust for
surviving spouse
Surviving
spouse owns
only half estate
Special Needs
Trust protected
Surviving
spouse’s share
subject to spend
down
Typical Estate Plan (unmarried)
Decedent’s
estate
Assets owned
by testator
during life
Nearly entire estate must be spent
down to access VA or Medicaid benefits
Way Around the Problem
Gift of some assets to irrevocable
trust or trusted individual
Settlor cannot be a beneficiary of the principal
Trustee can provide funds to beneficiary, who
can use funds as beneficiary sees fit.
Assets in irrevocable trust or Safe Harbor Trust
protected (subject to look back period)
Pre-Crisis Planning
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Update Community Property Agreements (only in community property
states)
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Revocable by one party
Update Powers of Attorney
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Gifting Powers
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Care Management mandate
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No authority to enter into arbitration agreements
Living Wills
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Update Living Wills after Terry Shiavo
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Update Health Care Proxy in states where they are separately required
Pre-Crisis Planning
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Discuss your plan with named fiduciaries
Crisis Planning
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Financing the costs
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Medicare
VA
Medicaid
Develop plan to address quality of life issues
Address Estate Planning issues