Frank Samson: Welcome to Boomers Today. I'm your host, Frank Samson. Of course, each week on our show we bring you important, useful information on issues facing baby boomers, their parents, and other loved ones.
Today we have with us, Greg McIntyre, who is based in North Carolina, and became a lawyer to fight courtroom battles, which he did for years, however after working in an environment where the focus was always on the next billable hour, he started McIntyre Elder Law Practice because he was interested in being more than just a lawyer. Greg was interested in making a difference in his client's lives.
Greg is a veteran of the United States Navy and a member of the North Carolina State Bar Association. He's also a member of Elder Council, a national network focused specifically on estate planning and wealth preservation, and we might ask Greg a little bit more about that organization.
Thank you for joining us on Boomers Today. I really appreciate it.
Greg McIntyre: Thank you sir. I appreciate the opportunity to be here and talk about something I'm passionate about.
Frank: Oh, that's great. I'm going to start us off with a basic question. There's a lot of different types of attorneys out there and everybody has their specialization. Elder law is also an area of specialization, but within elder there's kind of, for lack of a better term, sub-specialization. So can you give us a brief introduction to elder law and the specific area you specialize in?
Greg: Absolutely. I would say it's a subset of estate planning, but I think it's a pretty deep rabbit hole to go down because it has its own unique set of circumstances. Planning for a couple in their 30s with two children or early 40s with two children is much different than planning for a senior. And we always want to keep our eye on the fact that long term care could be an issue.
We’re very aware of the fact that around 70% of people over the age of 65 are going to need some type of long term care in their lives, in home assisted living or nursing home care. We want to make sure that, "Hey, is the will the right place to pass the assets? Should we look at other ways to protect the property? Do they have longterm care insurance that maybe their insurance specialists could put in place to help protect? Should we use trust?"
Those are all questions that we want to answer. Sometimes in elder law, you might get people who failed to plan. We've gotten in a situation where the family all of a sudden realizes, "Hey, we've got to pay for care and it's going to cost a lot of money. We're going to spend When we get clients who arein that situation, we help them navigate that situation and activate much needed benefits to pay for care.
So while elder law involves many different aspects of a person’s life, our main focus is on the senior and making sure they can stay in control of assets, protect those assets while maximizing their ability to pay for things like long term care.
Frank: Right. So you mentioned an interesting statistic that I use quite often and I think it goes something like, once you turn about 65 years old or there about, you've probably got about a 70% chance that you're going to need some sort of long term care. Firstly, can you take a stab at what percentage of your clients are really planning and what percentage are in ‘panic mode’?
Greg: Yeah. I'd say it's about half and half. Well, actually. Less than half have planned ahead.
Frank: That doesn't surprise me. So, what would you emphasize to people in order to get them to plan ahead. I'm sure you've heard that before, but how do we get people out there, our listeners to share with their friends and family to plan ahead? What do we need to do?
Greg: Absolutely. I'll tell you the story of my grandfather, Papa Mack, my dad's dad. My dad is one of six children as well and loves his grandmother and gramps. I'm sorry, his mom and dad. I love my grandmother and grandfather. My grandfather was a tenant farmer in North Carolina and also a furniture maker. Very talented. And as a tenant farmer, he farmed other people's land. The first year he farmed this guy's land when he was a young man. The guy didn't pay him. He stiffed him at the end of the year. He's a better man than me because I might've needed a civil attorney, maybe a criminal attorney by the time we were done.
However, he worked hard his entire life. He raised six children with his wife and in the end he lost literally everything, including his small farm house, which he was able to buy and take out a mortgage to buy. He probably paid on that mortgage for 30 years, Frank. He probably paid the bank back three times as much as he actually bought the house for over the 30 year period, including interest. And then in the end he ends up losing everything. I mean everything. He spent 14 and a half years in assisted living care and it literally took everything he had and then Medicaid came in and paid for it anyway. Okay?
I never thought that was right. I never thought that was just. So that is one of my ‘why's’. That and my wife and our six children. That's why I worked so hard, so late and weekends too to try to help people to avoid those types of situations. My grandfather's story is not much different at all than tens if not hundreds of millions of Americans out there who are in the same exact situation.
Elder law does not just affect that one person, that senior, it affects the entire family Frank, because the value of that house could send a grandchild to college. Those things are extremely important and could be fixed by literally just doing some planning ahead of time.
Or if you live in a state like I do that's fortunate enough to allow a lady bird deed, then that is not subject to any lookback period from a benefit program the way that long term care is. You can put it on today and preserve the home for the kids or grandkids and still qualify for that benefit tomorrow with no penalty.
Frank: I don't know if you'd agree with me on this, but the majority of people think that there's going to be some sort of insurance or government program that's going to pay for their care, which is true, but only in specific situations. Could you expound a bit on these options?
Greg: It's a deep question. Let's start with Medicare. A lot of people think that Medicare is going to pay for long term care. Everybody over 65 in the United States of America has Medicare. However, Medicare will not pay for assisted living or nursing home care. Medicare will pay for rehabilitation for a certain period of time, and if you have a supplement, may have it extended out longer to pay for 100% but at some point, usually it's within 100 days, you're going to have to start paying for your own long term care in-home assisted living or nursing home care, at the level prescribed by the doctors who will evaluate you.
And at that point, how are you going to do it? Well, you're going to have to come out of pocket for that care. That means it's going to start depleting your savings. It's going to take your income and you're going to have to pay rent at whatever facility you're in. Facilities have to maintain a staff, proper standards, equipment, and pay the mortgage as well. So you literally have to pay the rent there every month or you can't stay, which presents a problem for a lot of people because they might not have gotten long term care insurance that will kick in at that point to provide much needed supplemental income, additional income to cover those costs.
So that can be a huge issue. If not, you could look to roll to a Medicaid program in your state that pays for assisted living or nursing home care. From a legal standpoint, it’s tricky to qualify someone legally while preserving the assets for say a healthy spouse called the community spouse for instance, or the family.
Frank: All right. Thank you for that. I know that there’s also a long term care benefit through the VA. They don't really promote it heavily. So maybe you could give us a little overview on how that works.
Greg: Yes, there is a little known veterans benefit called Veterans Aid and Attendance Pension Benefits that allows a veteran or a spouse of a deceased veteran to receive benefits if they have some healthcare issues going on at the time, and we can get into that. I'm a certified attorney through the US Department of Veterans Affairs. I'm a veteran myself. I'm a member of the American Legion and I like helping veterans. So Veterans Aid and Attendance Pension Benefits is a benefit that has three prongs: health, wealth and service. You have to have been in service during a wartime period as set forth by VA.
You don't have to be on the frontline dodging bullets. They could have been in Nebraska at an Air Force base during a period of time. Or like my father who was on a sub tender docked in San Diego and doing patrols around that area and fixing subs during Vietnam when he was in the Navy. He would still qualify under the service prong because of the time he spent in during that war time event.
So that's one. Health is the second prong. You have to have some health issues going on. We'll hear insurance people talk about ADLs, activities of daily living. So if you need help eating, preparing meals, bathing, dressing or being ambulatory, you need a walker. A doctor will specify that you need help with two out of, say, six of those things, then you should qualify under the health prong. Or there's some automatic qualifiers, which are legal blindness, Alzheimer's dementia, any evidence of Alzheimer's dementia could help someone qualify on its own. That's under the health problems.
And then there is the wealth prong which I'll divide into two parts, income and assets. Assets, right now, thankfully the VA has actually codified something. Used to, it was kind of a rule of thumb approach as to what they would accept in assets and that was rumored to be around $80,000 or below. However, they've now codified it at $120,000 so you can't have more than a $120,000 in assets, but that can be defined a number of different ways. Your house and two acres of land now are not part of that.
As an elder law attorney, as a certified attorney through the VA, I can help veterans position their assets to better qualify other than just spending them down. There is a three year lookback period now that was implemented last year, I want to say October 18th of 2018, that if you move money into say a veterans asset protection trust or someone else's name, there's a three year lookback on that, but there are still other ways to either get qualified now or to utilize things for planning ahead like veteran's asset protection trust.
And then I'll come to the income prong under that wealth prong, which is a dollar for dollar decrease in benefits based on how much accountable income you have. So let's just say you're owed $2300 in benefits per month, which is not an unusual amount. That would be a common amount for that range under Veterans Aid and Attendance Pension Benefits for a veteran, say a married veteran. And that married veteran had $2300 in household income. Okay. That would mean he would get zero benefits because his income canceled out the benefit, unless he or she was spending their income on in-home care, assisted living, nursing home care, or even independent living care.
Let's say they're paying for in-home care. Perhaps they're paying a family member for in-home care because VA can't say that you have to hire the person down the street or somebody from an agency to come in and give care. They can't confine it to that. Perhaps a sister, a son, a daughter, a grandchild could give just as good care and be paid for that care.
There are many different ways to characterize that. That's just an example under a VA and Medicaid compliant caregiver agreement that would help to dispense that money and bring down that countable income to maximize the availability or eligibility of the Veterans Aid and Attendance Pension Benefits, which is a benefit for life, just like any other pension, once it's activated for a veteran.
Frank: I know we've been putting the emphasis on the veteran, but this benefit, it can provide dollars to a surviving spouse as well. Correct?
Greg: Exactly. The spouse of a deceased veteran can also qualify based on the veterans service. I would go back and listen to those same rules again that I just ran down if you're a spouse of a deceased veteran. You could be eligible for that same benefit, but Veterans Aid and Attendance pays down on a decreasing scale, whether you're the veteran, a veteran with a non-married veteran spouse, two married veterans or a spouse of a deceased veteran, etc., it pays out at different rates.
The payout, I'll just say, is approximately $1300 right now, approximately $1300, for a spouse of a deceased veteran per month. But sometimes that could double someone's income. I have taken veterans and spouses of deceased veterans as clients who were struggling to pay assisted living care. All their income was going to pay for that care, plus their savings every month, they were dipping into, which was running ... Which was being depleted and taking someone in that situation and turn ... Or the family was chipping in the shortfall between the cost of care and the senior's income who needed care and put that senior in a more empowered position where they drastically increased their income with Veterans Aid and Attendance Pension Benefits, and were able to have a surplus in assisted living and be able to actually put that money aside during their stay and pay private pay.
Frank: It could also help them be in a location that would be more preferable than maybe the family's able to afford. With the cost of longterm care, maybe the VA program won't fully pay for it, but it could certainly help a tremendous amount.
Greg: Sure. The VA is only going to pay in full if it's a retired veteran or you're disabled, fully disabled under a service disability.
Frank: Something that you said that I'd like to just reemphasize because I thought it was just so important and that's moving assets around. When we first talked to a family and were having some discussion, you'll hear from the adult daughter, "Yeah. I know we've got to get her approved on Medicaid. I've heard about this VA thing and my father was a veteran, so we’ve got to get her to this level. So we've been moving some money around out of her account, into the kids' accounts." I cringe when I hear that. So if you could just reemphasize why they shouldn't be doing that at all.
Greg: So when we plan for someone under either a state Medicaid program to pay for longterm care or a Veterans Aid and Attendance Pension Benefits or both at the same time, we keep an eye on both those programs to make sure we don't step on that benefit, that we don't block that person because of an erroneous move under the rules from getting that benefit that they really, really need.
Frank: You have a wealth of information, but unfortunately we're kind of out of time. But I want to make sure people know how to get ahold of you if they would like to talk to you.
Greg: Absolutely. To reach our practice, you can dial 7-0-4-7-4-9-9-2-4-4 or check us out online, M-C, elderlaw.com that's mcelderlaw.com. If you call our office and you're in any state, I don't really care if you're in California, wherever you are, Hawaii, call our office, 7-0-4-7-4-9-9-2-4-4, and we will look up and recommend another elder council attorney that practices elder law just like me in a town nearby.And we'd be glad to help be that resource for your listeners.
Frank: Great. Greg, I could talk to you all day, but unfortunately we have to go. I just want to thank you so for joining us on Boomers Today.
Greg: Absolutely. Thank you Frank and thank you for having me. You have a great day out there.
Frank: Great. Thank you. I want to thank everybody for joining us on Boomers Today. Just be safe out there and we'll talk to you all soon.