Converting Resources to Income Using DRA
Annuities
Written By: Jeffrey A. Marshall, CELA*
Annuities have become an
increasingly powerful planning tool for clients seeking to
protect excess resources from the costs of long-term care. The
DRA permits the use of annuities to gain immediate eligibility
for Medicaid if the transfer and remainder interest provisions
of the law are met. State
policy raises the income/resource treatment of a DRA compliant
annuity as an additional issue.
Immediate annuities have long been utilized to protect the financial
security of retirees. A
commercial immediate annuity is purchased from an insurance
company. The investor pays a sum of money to the insurance
company. In return,
the insurance company agrees to provide payments to the investor
over a stated period of time.
There are many variations of annuity investments. With an immediate
annuity the insurance company begins to make the contracted
payments immediately. An
immediate annuity can provide a retiree with the security of a
guaranteed income for a term of years or for life.
Immediate annuities can have an extra benefit for the community spouse
of an individual who needs long-term care.
In determining eligibility for Medicaid/LTC, a married
couple's countable resources are pooled and excess resources are
at risk. However, a
community spouse can retain his or her income without affecting
the Medicaid eligibility of the institutionalized spouse.
An immediate annuity converts a cash sum into a guaranteed stream of
payments. Such
payments have traditionally been treated as income under
Medicaid law. As a
result, the purchase of an immediate annuity can convert an
otherwise countable excess resource (cash) into a non-countable
stream of payments for a community spouse.
In order to expedite Medicaid eligibility for the institutionalized
spouse, the purchase of the annuity must avoid treatment as a
penalized transfer of assets.
This means that the community spouse must receive
something of equal value in exchange for the purchase, and the
annuity must meet the special requirements of the DRA.
In addition, the annuity must be structured so that it
will be treated solely as a source of income rather than as a
resource. Annuities
that meet these requirements are referred to as DRA compliant
annuities.
For married couples, DRA compliant annuities will convert excess
resources into income that will enhance the long-term financial
security of the community spouse.
The purchase of the annuity spends down a couple’s
excess resources to the level required for the institutional
spouse to become financially eligible for Medicaid/LTC benefits.
The cash that is converted to income is recouped over time as
annuity payments are made to the community spouse.
If you are married and your husband or wife is in need of long-term
care, contact Marshall, Parker & Associates for more
information about how an annuity can increase your income and
protect your family’s resources.
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Promoting Conversation About End-of-Life
Philosophy
Written By: Attorney
Brenda D. Colbert, Marshall, Parker & Associates
OK – so you have finally signed
that Health Care Power of Attorney with end-of-life directives
that you have been meaning to have for so long.
Congratulations, you now have one of the most
important estate planning documents and you probably deposited
it right into your safe deposit box at your bank or your fire
proof strong box at home with all of your other important
documents for safe-keeping.
Well, signing the document and putting it away somewhere
is not enough to ensure that your wishes will be honored – you
must have a conversation about your philosophies concerning
end-of-life medical treatment with your Health Care Agent and
family and loved ones. I
know that end-of-life medical treatment is not exactly the
easiest topic to bring up over Family Dinner.
You may have tried to communicate your feelings in the
past only to be told that you are being morbid or that your
loved one does not want to think about such thoughts.
As hard as that conversation may be, your end-of-life
directive really may not mean anything until you have discussed
your feelings with your family.
So, how can you make that conversation happen?
Marshall, Parker & Associates has made available on
its website the “Health Care Decision IQ Test for Family or
Physician” to promote better conversation and understanding
regarding end-of-life medical treatments.
Does that sound a little overwhelming?
Think of it this way – everyone enjoys those couple’s
tests that are printed in magazines with titles like “How Well
Do You Know Your Man” or “How to Tell if She’s Paying
Attention to You”. They
are fun ways to spend a few minutes together and may be even
learn a little something unexpected about each other.
The Health Care Decision IQ Test works in much the same
way.
Step 1 of the Test requires you to complete the Personal Medical
Preferences section, which consists of 10 questions designed to
elicit your personal preferences concerning end-of-life medical
treatment. Step 2
requires your Health Care Agent, or family member, friend, or
physician, anyone that you want to talk to about your
philosophies, to complete the Agent’s Understanding of Your
Personal Medical Preferences” section, which mirrors the
section that was completed by you.
In Step 3, you and your Agent compare your respective
answers and score the results.
If you answer 10 out of 10 questions the same, then you
are communicating well, 8-9 questions correct means that you
have good communication, but still need to talk, 5-7 means that
you definitely need to talk more, and 5 or less questions
answered the same indicates that you and your Agent have a lot
of talking to do. Actually,
the score is not the important factor.
The important aspect of this Test is that it will open up
a dialogue between you and your Agent allowing you to discuss
these difficult topics.
My husband, Mark, and I provide an excellent example of how useful this
tool can be for promoting end-of-life discussions.
I am always talking to Mark about what I would and would
not want in the way of medical intervention if I were terminally
ill or permanently unconscious.
Mark, on the other hand, hates to talk about such issues.
He did, however, agree to take the Health Care Decision
IQ Test with me one morning over breakfast.
We scored only a 5 when we took the test with Mark as my
Agent and an 8 when I was Mark’s Agent.
The scores were certainly eye-opening, but most
importantly, we actually sat for over an hour talking about our
philosophies concerning end-of-life medical treatments.
This was truly amazing, because prior to this, I could
not get my husband to listen to me about my feelings concerning
end-of-life issues for more than 5 minutes and he never
expressed his feelings about the issue.
I feel confident now that I fully understand Mark’s
desires and that, if I am ever in the situation where I have to
make end-of-life decisions on Mark’s behalf, that I will be
able to truly honor his wishes.
I feel that Mark will now be able to do the same for me.
The Health Care Decision IQ Test made the conversation
that we know we had to have, but always avoided, much easier.
My husband even suggested that we take the Test again in
the future to make sure that our feelings have not changed.
I encourage all of you to sign a Health Care Directive that contains
your end-of-life philosophy and to talk to your Agent and loved
ones about your wishes. The
Health Care Decision IQ Test can help you to get that
conversation started. In
the end, your Agent will be relieved that he/she fully
understands your desires concerning end-of-life medical
intervention, especially if called upon to make end-of-life
decisions on your behalf. Instead
of the guilt and indecision often associated with end-of-life
decision making on behalf of another person, the conversation
that you have will provide your Agent with the peace of mind
that comes from knowing that he/she was able to truly be your
voice and ensure that your wishes were upheld.
Click
here to download your copy of the IQ Test
Attorney
Colbert can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Estate
Planning in Pennsylvania,
Revised Edition Now Available
Written
By: Melissa Bottorf, Director of Marketing & Public
Education
PBI Press has published a revised
edition of Estate Planning in
Pennsylvania. The book is an 858 page compendium of
practical, proven–effective solutions to the estate planning
problems presented by a broad range of typical clients. This
book takes the estate planning professional from the initial
stage of interviewing the client through terminating
representation and offers expert discussion of a myriad of
estate planning issues.
For the book, 15 recognized authorities on Pennsylvania estate planning
law were each asked to write or update a chapter.
The result is a work of wide-ranging applicability which
is intended primarily for lawyers, but should also be of
interest to trust officers, financial planners and others
involved with providing estate planning services to consumers.
Marshall, Parker & Associates' Managing Attorney Jeffrey
Marshall wrote the book's chapter on "Medicaid Payment
for Long-Term Care."
Chapters include: Interviewing the Client | Ethical Issues | Mapping the
Plan | Drafting the Will | Drafting the Trust | Tax Planning |
Estate Planning for Closely Held Businesses | Estate Planning
for Nontraditional Couples | Estate Planning Using Charitable
Gifts | Powers of Attorney and Advance Directives for Health
Care Declarations (Living Wills) | Medicaid Payment for
Long-term Care | Choosing Fiduciaries | Transferring Assets
Outside of Probate | Execution and Safekeeping of Documents |
Terminating the Representation | Index of Cases |.
For
more information or to purchase the book, contact PBI Press at info@pbi.org
or 1-800-247-4724. The
cost is $199.00.
Melissa
can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
Attorney Marshall Named a Pennsylvania Super Lawyer
Written
By: Melissa Bottorf, Director of Marketing & Public
Education
We are pleased to announce that
our managing attorney, Jeff
Marshall, has been named a 2007
Pennsylvania Super Lawyer by Super
Lawyers. Publication
of the award was made in this month’s issue of Philadelphia
Magazine. Super Lawyers
names Pennsylvania's top lawyers as chosen by their peers
through independent research conducted by Law & Politics.
The 2007 Pennsylvania Super Lawyers awards are based on a survey
of approximately 35,000 lawyers across the state. Pennsylvania
attorneys were asked to vote for the best lawyers they had
personally observed in action. No more than the top 5 percent of
the total lawyers in the state are selected for inclusion in Super
Lawyers.
This marks the 4th consecutive year that Attorney Marshall
has received the Super Lawyer honor.
Melissa
can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
What is POLST?
Written By: Jeffrey A. Marshall, CELA*
Pennsylvania’s new law on
advance health care directives took effect on January 29, 2007.
Act 169 of 2006 sets out a comprehensive set of laws
governing health care decision making for incompetent persons.
Among the provisions of the new law is a requirement that the Department
of Health determine the advisability of using a standardized
form containing physician orders detailing the scope of
life-sustaining medical treatment to be provided to patients.
These orders are commonly referred to as POLST -
Physician-Order-For-Life-Sustaining Treatment.
The POLST represents an attempt to more effectively implement patient
decisions regarding end-of-life
care. Numerous
medical and social science studies suggest that even when living
wills and other forms of advance directives are in place, they
often fail to appropriately direct care because: (1) the
directives don't provide much guidance; (2) the principal didn't
understand the form he/she signed; (3) the agent doesn't
understand the principal's wishes; (4) health care providers
don't know about or fail to consult or misinterpret the
document.
“[T]he wishes expressed by an advance directive may in some cases not
be honored due to the unavailability of completed forms or a
health care professional’s inability to quickly translate the
language of the document into orders for treatment of specific
medical conditions. Health care professionals caring for persons
in various settings may in good faith initiate or withhold
treatments that are medically not indicated or contrary to the
desires of the person. The Physician Orders for Life-Sustaining
Treatment (POLST) and similar forms are designed to help health
care professionals honor the treatment wishes of their
patients.”1
“POLST orders provide for continuity of DNR and other life-sustaining
treatment orders from one setting to another, such as when a
patient is transferred from a nursing facility to a hospital or
vice versa.”2
The physician’s POLST order is transferred with the patient
when the patient moves to a new health care delivery setting
which helps assure that the patient’s end-of-life decisions
are honored in the new setting. Because the POLST is in a
standardized and unique format and is already signed by a
physician, it is capable of being implemented at once by any
clinician who encounters it.
As a result, the POLST form of instruction directive has
shown high rates of compliance and effectiveness.3
“The POLST is a concise form containing specific medical instructions
that can be acted on immediately by nurses, doctors, or
emergency personnel; it may include "do not
resuscitate" and "comfort measures only" orders,
and it may indicate whether to administer CPR (cardio-pulmonary
resuscitation), antibiotics, intravenous fluids, feeding tubes,
artificial respiration, and other medical interventions. Unlike
the living will, the POLST governs medical issues that are
considered very likely to arise in the near term. According to
its developers, it is really only suitable for those expecting
to die within the year.”4
Even without the encouragement of Act 169, the POLST movement has been
spreading in Pennsylvania and throughout the nation.5 Health care
providers, patients near the end of life, and family decision
makers should be receptive to this effective form of combined
physician order and advance directive.
For more information about POLST see http://www.polst.org.
Attorney
Marshall can be contacted at webmail@paelderlaw.com
or at 1-800-401-4552
1
www.polst.org.
2
The Pennsylvania
Medical Society Advance
Health Care Directives and Health Care Decision-making for
incompetent patients, a guide to Act 169 of 2006 for physicians
and other health care providers, (2006), page 1. http://www.pamedsoc.org/.
3
Taking
Care: Ethical Caregiving in Our Aging Society,
The President’s Council on Bioethics, (2005), Chapter 2 - The
Limited Wisdom of Advance Directives.
4
Taking
Care: Ethical Caregiving in Our Aging Society,
The President’s Council on Bioethics, (2005), Chapter 2 - The
Limited Wisdom of Advance Directives.
5
"Advocates
Praise PA. End-of-Life Law, But Want More Protections",
Pittsburgh Post-Gazette (12/04/06). “First developed a
decade ago in Oregon and now in use in fifteen other states as
well, a POLST document (unlike a standard living will) takes the
form of a signed doctor's order; it is not completed by the
patient, but by a doctor or nurse-practitioner after consulting
with the patient or his surrogate. The POLST is a concise form
containing specific medical instructions that can be acted on
immediately by nurses, doctors, or emergency personnel; it may
include "do not resuscitate" and "comfort
measures only" orders, and it may indicate whether to
administer CPR (cardio-pulmonary resuscitation), antibiotics,
intravenous fluids, feeding tubes, artificial respiration, and
other medical interventions. Unlike the living will, the POLST
governs medical issues that are considered very likely to arise
in the near term. According to its developers, it is really only
suitable for those expecting to die within the year.” Taking
Care: Ethical Caregiving in Our Aging Society, The
President’s Council on Bioethics, (2005), Chapter 2 - The
Limited Wisdom of Advance Directives.
