June Newsletter



Insuring the Institutionalized Spouse is Protected if the Community Spouses dies first. A new estate plan is necessary when one spouse requires long-term care coverage from Medicaid and the other remains in the community.

What if the non-institutionalized spouse were to die first. The spouse now receiving Medicaid coverage would receive all the resources. That spouse would lose Medicaid and the inherited resources would have to be spent down for long-term care expenses.

How do you prevent such an outcome. One possible solution is to rewrite the Will for the community spouse and disinherit the institutionalized spouse. If the community spouse dies none of the resources would be inherited by the institutionalized spouse. However, because a disinherited spouse always has a right to statutory portion of the deceased spouse’s estate Medicaid considers this a transfer. The disinherited institutionalized spouse would lose Medicaid.

A better solution is for the community spouse to redraft a will containing a testamentary special needs trust for the institutionalized spouse. Two questions what is a testamentary trust and what is a special needs trust. A testamentary trust is a trust that is created directly out of a person’s will. The will itself states upon my death all or a portion of the remaining assets remain in trust for someone. A special needs trust means that if the person is receiving Medicaid long-term care coverage , Medicaid can’t consider the trust assets as available for the surviving spouse. Those trust assets can then be used to supplement the care received. They can be used to hire an advocate who can watch over the nursing facility to insure the surviving spouse receives the care they need. Upon death of the surviving spouse, the remaining trust assets can be distributed as directed by the trust, usually to the surviving children.

This is a crucial step when planning for a couple when one spouse requires long-term care. The community spouse should always redraft their will leaving all remaining resources into a special needs testamentary trust in case the non-institutionalized spouse predeceases the institutionalized spouse.

Individuals and Family Support Program(IFSP) Update

IFSP is designed to assist individuals on the waiting list for the intellectual disability (ID) or developmental disability (DD) Medicaid waivers to access short-term resources, supports, and services that will help them remain in their own community homes.

IFSP funding will now have two funding periods. The first funding period will start September 15, 2014 (P1). Funding for this period will cover funding for supports and services that are required by individuals and families for a one year time period of September 15, 2014 through September 14, 2015. The second funding period will take place March 15, 2015(P2). Funds for the second period will cover services and supports for March 15, 2015 through March 14, 2016. It is requested that those wishing to ask for funding for summer camps wait until the second funding cycle to submit their requests. Funds for the program will be evenly split between the two funding periods. The cap for IFSP funding remains at $3,000, so families may request funding during each cycle if the amounts for each period together do not exceed $3,000. Additional guidance material will be posted on the DBHDS website shortly.

Contact us at (703)379-0442; ed@zetlinlaw.com



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