Who Should You Trust

Video Transcript: Who Should You Trust

I sat across from them over charity hotdogs and salad, enjoying the summer evening weather and the fact that the speeches were over. Unfortunately, the couple knew I worked in the Care Assistance field and wanted to chat about how great their life insurance person was.

“Oh, he was fantastic,” he said. “Our insurance agent managed to get my mother a whole bunch more in income every month, funded a life insurance policy, and actually got a great deal on a mortgage for the house.”

“A mortgage for the house?” I asked. “It was your father, a veteran, who went into the assisted living center, right? Why did your mother need a mortgage if she had a lot of income coming in and the house was paid up?”

“Well, you know,” she said as if it were the most obvious thing in the world. “To get more money out of the house to get a bigger life insurance policy. When my mother-in-law passes on, it will leave the family with a lot more money.”

“What about your mother-in-law?” I asked. “How much did she get to keep in investments?”

“Well, not much,” he said. “She has to keep her checking account below $2,000, right?”

“You mean, your father and mother have to keep their accounts below $40,000 to $80,000,” I said.

“Wasn’t that made clear when applying to the VA for the Aid and Attendance Pension?”

“Oh, no,” he said, looking at his wife. “We didn’t need to do the Aid and Attendance Pension Benefit once the reverse mortgage kicked in. That provided the money mom needed. Besides, they earned too much income even before the reverse mortgage started anyway.”

Now I saw what was going on. I knew for a fact that his parents didn’t earn “too much income” once you factored in the assisted living expenses. Insurance is only one part of an overall plan, but there are some insurance salesmen who only think of their commissions. This one maxed out his commission by having the clients needlessly sell off everything to pay the premium on an annuity, and then went back for more by having the mother pull all of the money out of the house to buy an insurance policy.

“Here,” he said, pulling out the insurance agent’s card. “You might want to work with him.”

“Thanks,” I said, taking the card with a smile, thinking I’ll now know who to stay far, far away from.

There are many different ways to screen planners to help with the Aid and Attendance Pension Benefit, and there are always personal questions people want to ask relevant to their own situation. One of the most important choices a family can make is to choose a planner who will lead the team of professionals helping them and their loved ones. While questions about your personal situation are always important and should be asked, there are also all of the usual questions about experience and education people ask as if they were interviewing someone for a job.

First, before even getting to the questions to ask a professional, the first qualification you should look at is whether or not the professional is accredited by the Department of Veterans Affairs. I am a V.A. Accredited Attorney, and I frequently work with a V.A. Accredited Claim Agent. For example, I work on a lot of cases with The Senior Veterans Council based in the Triangle area of North Carolina, but we both work with veterans across the country, sometimes using a local attorney to assist with documents. I am smart enough to know that I can be the point person on the legal end of planning, but the claims agents at The Senior Veterans Council understand the fine points of planning, preparing, and filing the applications for the Aid and Attendance Pension Benefit. I handle overseeing the legal and financial parts of the overall plan. Together, we can make sure the client gets everything they need.

As for the three questions, I was once pressed by a colleague to come up with three and only three questions that will show whether or not a professional knows what they are talking about when it comes to Care Assistance Planning in general. After all, the insurance agent in the above story probably helped hundreds of clients and their families. He may have even gone to some top schools. But clearly the only thing he knew about Care Assistance Planning in general and the Aid and Attendance Pension Benefit in particular was how to make money off insurance. He didn’t know or care about maximizing benefit, flexibility, and quality of life for the family. Until a Planner knows more about your specific situation, some preliminary questions can help test their general ability.

Here are the three questions (along with the frustrating, but correct, answers) to ask when screening a Care Assistance Planner:

Question One: Can you use a revocable living trust to qualify for the Veterans Aid and Attendance Benefit or Medicaid?

The Horrible Answer: “Yes, anything you put into a revocable living trust is exempt from a spend down.” This is about as wrong as you can get. In the estate planning arena, a revocable living trust is a wonderful tool for avoiding probate, but it does nothing to avoid the assets in the trust from being looked at for Medicaid or other benefit programs. The reason is because the grantor setting up the trust maintains control over the assets. There are also other kinds of trusts that may be very useful in qualifying for Care Assistance programs while retaining assets in them, but those are typically irrevocable trusts where you have to give up control and usually do so five years in advance for the Medicaid part of qualification.

The Bad Answer: “No, there is no way to use a revocable living trust in the Aid and Attendance Pension Benefit or Medicaid process.” While this is not as bad of an answer as the one above, it does show that the professional does not truly understand all of the tools and rules involved in overall Care Assistance Planning. A revocable living trust can, in fact, be an important tool in Medicaid Planning if not for the Aid and Attendance Pension Benefit, but it is not a cure all, nor is it a forbidden entity. Which leads us to…

The Good Answer: “It depends.” The reason this is the best answer is that a revocable living trust can be used in conjunction with some of the Medicaid qualification rules to save money for a spouse not going into the nursing home (often called the “community spouse”). Since all assets in a revocable living trust are considered countable assets, the trust can be used to first raise the countable assets as high as they can be for the community spouse before shifting, spending and gifting strategies can get to qualification. Recently we helped a client who worked with another Care Assistance Planner, and using a revocable living trust allowed us to plan out an additional $80,000 in savings beyond the other professional’s plan for the husband whose wife needed skilled nursing care. However, while the revocable living trust is an important tool not to be overlooked in the Medicaid Planning Process, it is not going to help qualify for the Aid and Attendance Benefit.

Question Two: Shouldn’t I just gift assets right away to qualify for the Veterans Aid and Attendance Benefit or Medicaid?

The Horrible Answer: “Yes, absolutely. If you gift everything away today, then tomorrow you can apply for Medicaid and qualify.” As you probably know, this can be one of the worst things you can do resulting in sometimes even more than five years of ineligibility for Medicaid. While simply giving assets away is a tool that can be used to qualify for the Aid and Attendance Pension Benefit, it is like using a smart phone to hammer in a nail. In the end, it will cause a lot more problems for you than it needs to.

The Bad Answer: “Absolutely not! Unless you have five years, you should never make any gifts.” While not as bad as the horrible answer, it cuts off what can be an important tool in the overall Care Assistance Planning process when it comes to Medicaid and the VA Pension Benefit. Simply throwing out that tool altogether is also not a good idea.

The Good Answer: “It depends.” If there are five years… or even less but still a good amount of time… gifting can be a good part of an overall, coordinated VA Pension Benefit AND Medicaid Planning strategy. And in the context of proper planning for the Aid and Attendance Pension Benefit, the act of gifting is actually done to the proper trusts… not directly to family members.

Question Three: Shouldn’t I just buy long term care insurance instead of trying for the Aid and Attendance Benefit?

The Horrible Answer: “No, Long Term Care insurance is just an expensive scam. It’s like throwing money down a hole.” Long term care insurance… more specifically, the right long term care insurance for the right period of time… can be an extremely beneficial tool as part of an overall Care Assistance Plan if you can get it inexpensively enough. However, with the Aid and Attendance Pension Benefit, we are talking about money that can be used right away to help pay for care. Plus, the usual first step in helping senior veterans who need help is classified more as assisted living care, not nursing home care, and long term care insurance is often highly focused just on the nursing level of care.

A Second Horrible Answer: “Yes, absolutely. Get the best, longest-lasting and highest payout long term care policy you can.” Again, Long term care insurance… more specifically, the right long term care insurance for the right period of time… can be an extremely beneficial tool as part of an overall Care Assistance Plan for the nursing level of care. Yes, that was pretty much the same sentiment I just mentioned, because it is just as true that never looking at Long Term Care Insurance is just as bad an answer as always having a massive long term care insurance policy.

The Good Answer: “It depends.” Again, the non-definitive answer is the best. Buying long term care insurance may be good decision depending on the situation overall, and from there finding the right policy paying the right amount over the optimal period of time for your situation is critical. Even more, as time goes on, the policy may be amended and even decreased to fit changing needs. But in most cases, buying long term care insurance will often not help effectively if there are current or upcoming needs for a senior veteran, whereas the Aid and Attendance Pension Benefit can help those who qualify very quickly if the planning is done correctly.

As maddening as it is to some of my clients and their families, the best answer to all of these questions is “it depends.” It actually is the most accurate when the planner you are looking for is still in the interviewing phase. Until they have all of the information in front of them and have the ability to discuss things with the clients in more detail, there is no way to give an absolute yes or no answer to any of these questions. If a professional at this stage is giving simplistic answers, you know you probably need to keep looking.

Another factor to look at is the experience and accreditations of the professionals you are working with. While State Bars may accredit certain attorneys as “Elder Care Attorneys,” that is actually a pretty wide field covering not just Medicaid qualification but general estate planning, social security issues, lawsuits against nursing homes involved in elder abuse, and many other items. It might be a good place to start, but be sure to look further, and other credentials may be more important for your situation.

Now, if planning for the Aid and Attendance Pension Benefit in conjunction with possible eventual Medicaid qualification is what you are looking for, then there are actually Certified Medicaid Planners™ who are granted that accreditation by the CMP Governing Board based on experience, testing, and good moral character, but this designation is actually open to attorneys, social workers, financial and insurance professionals, and accountants as well. More importantly, it is a more focused designation than being involved in “Elder Law,” which may even mean the attorney with a large practice suing nursing homes doesn’t even handle Medicaid planning at all. So if you can find a V.A. Accredited Claim Agent or V.A. Accredited Attorney who is ALSO a Certified Medicaid Planner™, then you are starting in the right place. For more information on Certified Medicaid Planners™, please visit the CMP Governing Board website at www.cmpboard.org.

Summary

The Care Assistance Planning process around the Aid and Attendance Pension Benefit is never as easy as it first seems, and the biggest threat to a family’s finances may be trying to do it yourself or getting involved with the wrong professional. But working with the right professionals early enough can prevent a potential financial catastrophe for the family.

If you do have further questions, you can email them to my office or call me directly. Call my office at 919-518-8237 and ask for Jeff, but please mention you are calling in response to my V.A. Pension Benefit Planning e-mails. Thanks again and enjoy the information. The next section will be on investments within the V.A. Pension Benefit Planning trusts.

Jeffrey G. Marsocci

The Care Assistance Center, LLC

8406 Six Forks Road, Suite 102

Raleigh, NC 27615

919-518-8237

www.CareAssistanceCenter.com

Jeffrey G. Marsocci was born in Fort Worth, Texas but was raised in Lincoln, Rhode Island and graduated from Mount Saint Charles Academy High School. He graduated from Hofstra University with an undergraduate degree in Business, and two years later earned his law degree from the same school. He also earned a Certificate Degree in Non-Profit Management from Duke University in 2004, he was the Alumni of the Month for Hofstra University in June of 2013, and his firm was honored by the City of Raleigh with the 2011 Human Relations Business Award. Mr. Marsocci also became a Certified Medicaid Planner™ in 2014, a certification granted by the CMP™ Governing Board*, and he is an attorney accredited by the Veterans Administration to practice before the V.A. and its applicable administrative and legal tribunals.

In addition to working in his estate planning, estate administration, and Care Assistance Planning practice in Raleigh, NC since 1996, Mr. Marsocci is the author of numerous books including Estate Planning Basics, The Veteran’s Long Term Care Solution and other planning books found on Amazon.com. Mr. Marsocci frequently holds seminars for clients, financial advisors and other attorneys on topics related to the life and estate planning field as well as developing and presenting continuing legal education courses for attorneys and life insurance agents. Mr. Marsocci is a member of the North Carolina Bar Association, the Wake County Bar Association, and the National Italian American Bar Association. He and his wife Kathleen live in Raleigh, North Carolina and work with various charitable and non-profit groups including Kiwanis. Both are recipients of the President’s Call to Service Award through the Points of Light Foundation for completing more than 4,000 hours of service during their lifetimes.

*Certification is granted based upon a qualified candidate demonstrating a mastery of the skills and knowledge of the subject matter. To achieve certification, a CMP™ must meet certain education and/or experience requirements, show proficiency in Medicaid Planning through a thorough examination, and commit to adhere to the highest in professional standards.  A CMP™ also subjects himself or herself to discipline by the CMP™ Governing Board. A Certified Medicaid Planner™ is not necessarily an attorney, so this designation is not governed or regulated by any state bar association.

Professional advice on how to access Medicaid and VA Benefits without giving up the house or assets using a trusted step-by-step process that literally walks you through a complex and bureaucratic system.

Get your free information packet “How a Little Known VA Benefit Can Provide Monthly Financial Support”

David Cole of the Senior Veterans Council and I have put together a useful packet of information along with my book “The Veteran’s Long Term Care Solution: The Truth Behind Long Term Care Planning for Veterans with the Aid and Attendance Pension Benefit” which includes:

  • 20-minute DVD outlines how the benefit can provide financial assistance towards the cost of in-home care, Assisted Living, or possibly independent living facility costs.
  • VA Aid and Attendance Benefit Rate Table
  • How to access immediate funds while applying for government assistance
  • Using a NOVA Professional Advocate to Pre-Plan Your VA Claims
  • Special Industry Report: Medicaid Secrets Reveals: Learn proven strategies to save your home and protect your life savings from devastating nursing home costs
  • The Promise to America by Lyndon B. Johnson
  • National Care Planning Council
  • Book by Jeffrey G. Marsocci – The Veteran’s Long Term Care Solution: The Truth Behind Long Term Care Planning for Veterans with the Aid and Attendance Pension Benefit

Yes, I want a free information packet “How a Little Known VA Benefit Can Provide Monthly Financial Support”

Disclaimer: The information contained in this email is provided “as is” with no warranties or guarantees. This information should not be considered as actual legal, tax or investment advice and you should always contact a certified accountant, tax professional, or attorney before making any financial decisions. While every attempt has been made to provide current and accurate information, neither the author nor the publisher can be held accountable for any errors or omissions. You agree that you are solely liable for any and all reliance, use, or action on this information.