Elder Law & Guardianship Law for Illinois Seniors

Hynds, Rooks, Yohnka & Bzdill is highly experienced in providing planning and advice to clients dealing with issues relating to aging and disability. If you need help with Medicaid, a guardianship for a person who is no longer able to manage their own affairs, or any other age-related issue, please just contact us for an appointment.

Medicaid Planning?

One of the most difficult situations seniors and their families face is long-term nursing care. One way to plan for it is to have long-term care insurance, but this is a relatively new product and many of today’s seniors cannot afford such coverage. Most people who face long-term nursing care are forced to spend their own savings until they qualify for assistance from Medicaid.

Unlike Medicare, which is available to all eligible seniors, Medicaid is a need-based program that only becomes available after certain “impoverishment” criteria are met. However, it is not sufficient to simply transfer your assets to your spouse or children. The qualification for Medicaid benefits for long-term health care is subject to significant government regulation. The policy of the federal government is that individuals cannot deliberately impoverish themselves and still receive Medicaid.

As part of the Deficit Reduction Act of 2005 (“DRA”), Congress recently passed changes to the Medicaid eligibility rules. The states are now required to pass enabling legislation and regulations interpreting the new rules. Until these new regulations are enacted, attorneys will have a limited ability to give clients clear guidance on Medicaid planning. Keeping this in mind, the key rules (which may change with legislation and court interpretation), are:

Under the rules, in 2009 and 2010, if a spouse requires nursing home care, the spouse at home is allowed to retain in his or her name the family residence and assets having a fair market value of $109,560.00. In addition, the spouse at home is allowed to shelter $2,739.00 per month of income, or $32,868.00 annually. These dollar amounts are adjusted annually. All other assets and income must be applied towards long-term nursing home care or medical expense before Medicaid is available. For the surviving spouse or a single person, these exemptions are not available and all assets must be used until the estate is reduced to $2,000.00 before Medicaid is available. In addition to the $2,000.00, a person is allowed to prepay funeral expenses subject to certain limitations.

At the time application is made for Medicaid benefits, the Department of Public Aid applies one of two “look-back” periods in determining eligibility. The Department reviews all transfers in trust made without fair payment during the five prior years and all outright transfers made without fair payment during the three prior years. If there are any applicable transfers in trust during the past five years or outright transfers during the past three years, no Medicaid benefits are available during what is termed the “penalty” period. If the transfers - whether in trust or outright - occurred before the applicable look-back period, they have no effect on the availability of Medicaid benefits. The changes made by Congress in the DRA include changing the look-back period to 5 years regardless of whether the transfer was outright or in trust. Currently, the State of Illinois has not passed enabling legislation and regulations consistent with the DRA. Estate planning clients should consult with their HRYB attorney concerning any new developments in the law.

If there is an applicable transfer during the look-back period, Medicaid benefits are unavailable for the “penalty” period, being a number of months equal to the fair market value of the transfer divided by the average cost of nursing home care in the area. It is therefore important for each individual to retain sufficient assets to cover the cost of long-term health care during the penalty period. The typical Medicaid planning strategy involves the transfer of assets into an irrevocable trust (retaining only the right to the income from the trust) with the retention of sufficient other assets to safely provide for all potential long-term health care during the applicable penalty period.

Another change made with the DRA is to revise the penalty period so that it starts running on the date of the transfer or the date that the applicant would have qualified for Medicaid but for the penalty period, whichever is later. This change will require that the applicant be in the nursing facility and have spent down their own resources to the eligibility level before the penalty period starts to run.

Special Needs Trusts

A specialized form of Medicaid planning, Special Needs Trusts are set up to benefit a Medicaid recipient to provide benefits not otherwise covered by Medicaid. These Trusts are usually set up by family members to benefit younger Medicaid recipients such as children with severe disabilities. Please contact us for more information.

Guardianships

A guardianship proceeding allows a court to give someone the authority to make decisions and manage the affairs of a person who, because of a disability, cannot manage his or her own affairs. The best advance planning is to avoid guardianship issues by having in place durable powers of attorney for property and health care that will give someone the authority to make decisions for a disabled person without having to petition a court. If there are no powers of attorney in place, an interested person can apply to the court for a guardian to be appointed. Guardianship proceedings may also be necessary to handle the affairs of minors.

Hynds, Rooks, Yohnka & Bzdill has extensive experience in dealing with guardianship issues. In fact, since 1986, Diane Yohnka Jorstad has been appointed by successive Illinois governors as Public Guardian for Grundy County, the person Grundy County authorities turn to to provide guardianship representation. If you need an attorney to help you with a guardianship, please just contact us for an appointment.