This week I met with two families (adult children) who were extremely concerned about their parents running out of money to pay for the care (this does not count the third call that I received).
These were not children who were concerned about their inheritance. Coincidentally, the parents involved in both families were entitled to the Veteran’s Aid and Attendance benefit which exists to offset the cost of care with a monthly stipend.
Both families were told by a certain organization that did at seminar at a local assisted living facility to put their money into an annuity to hide their assets. In both cases, it was only one spouse who needed care.
This idea of having your money put into a VA qualifying annuity really bothers me. It is irresponsible and a huge money maker for the insurance salesman who lands such a deal.
Why is it irresponsible?
It is irresponsible because anything that an individual does with their money can impact their ability to get Medi-Cal should that type of long term care be necessary. These salesmen do not have any understanding of a person’s physical or cognitive functioning, their life’s goals, what environment would better suit the person whose money they are locking up, etc.
Additionally, a VA qualifying annuity will not pass muster for overcoming the look back period for Medi-Cal. That application specifically asks if the applicant has transferred assets during the last thirty months to qualify for Medi-Cal.
Placing funds in a VA qualifying annuity will be considered a non-qualifying transfer for purposes of getting Medi-Cal benefits. There are Medi-Cal annuities, but they are very difficult to come by.
Moreover, what if the well spouse needs money? The cost of taking that money out of such an annuity will be prohibitively expensive. Suffice it to say, I have helped countless families obtain these benefits (last week I won a Medi-Cal Appeal and got an award for a client retroactive to January), without sacrificing the at home spouse or my ethics.
The VA allows a veteran (or the widowed spouse) to do almost anything he or chooses to avail themselves of this benefit. And why not? Our Veterans –you, your father, your brother, your uncle, risked their lives for us.
On the same note of buyer beware is the “estate planning workshop.” These are trust mills. I see this ad in my local newspaper all the time. Living Trusts for an unbelievably low price… like $400.
Should you choose to go in this direction, you will get a living trust. This document without all of the bells and whistles such as a certification of trust, pour-over will, durable power of attorney, advance health care directive, deed transfer, review of your assets, binder, notarization of all documents is like having a dental hygienist clean your teeth by having you gargle and spit.
If you do not believe me, click onto some of the links below and read some of these articles on the topic!
Also, check out what the State of California Department of Justice has to say about trust mills. http://ag.ca.gov/consumers/general/living_trust_mills.php