Legal Question in Elder Law in Michigan

Re: long term care costs

Below is a quick primer on Medicaid laws for a married couple. Numbers have changed Just the concepts.

Trust for the Sole Benefit of the Community Spouse

This method is the best way to shelter non-IRA/retirement assets from having to be spent down. Taking the annuity concept one step further is the Sole Benefit Trust. A Sole Benefit Trust is when assets are titled into a special Irrevocable Trust in the name of the nursing home spouse and the terms of the Trust payout similar to the Medicaid Qualified Annuity discussed above. The best way to explain this is by example:

Wife enters the nursing home and husband is in the community. Together they own countable assets above the husband�s Resource Allowance consisting of a $200,000 stock portfolio. It is not wise to liquidate the stock portfolio as there would be significant capital gains. Accordingly, the stock can be transferred, without taxes into a Sole Benefit Trust in the name of the husband, then the stock can be paid to and for the sole benefit of the spouse, with terms that are actuarially sound, as in the Medicaid Qualified Annuity. This eliminates the need to liquidate the stock and incur the capital gains tax. This method also works well for other assets that are difficult to rent or liquidate.

Frankly, this is the method we will use to shelter any at risk, non-qualified assets.

Now a little about me.

I have been specializing in Elder Law since 1989. I am on the Board of Directors and have been recently elected the Chair person of the Board effective June 08 and I am on Executive Committee of the Michigan Alzheimer�s Association � Greater Michigan Chapter as well as being listed in the Experience Registry of the National Academy Elder Law Attorneys. I have found the public and well as the professional world to be clueless and believe it is hopeless when it comes to the legal and financial considerations. If your dad was to have to go into a nursing home, I can boldly state that we can protect probably all of your parents assets. It is important to address these issues as soon as possible. The quicker we start planning the more we can save. Specifically, you mom can create very special type of trust for her own benefit and shelter all of their assets that are not protected. This is true even though Michigan has changed the Medicaid laws in July.