MQA’s Hidden Dangers

May 2, 2014

by David Zumpano with No Comment Asset Protection Legal Technical Medicaid VA

Today, many elder law attorneys rely on Medicaid qualifying annuities to get their clients qualified to receive Medicaid benefits. They're also used when clients seek VA pension benefits.

While Medicaid qualifying annuities have become the default solution, they are not without risk. One challenge is that MQA's do not work well for single individuals. Second, even when used in married planning, there is no assurance the amount placed in the Medicaid qualifying annuity will actually be preserved. In fact, it could all be lost with the subsequent disability or death of the community spouse.

These are just some of the issues (not to mention the Veterans Administration's changing position on annuities when applying for veteran pension benefits) that we will be discussing at the Asset Protection, Medicaid and VA Practice With Purpose Program June 9th – 11th in Chicago.

National Asset Protection, Medicaid and VA experts and dozens of attorneys like you will be collaborating to identify the hidden risks in the different Medicaid and veterans' benefits strategies. This program promises to be the hands-on strategic solving many lawyers crave in their practice. Click here to get a full outline and to register for the program.

In these three days here is just some of what we will cover:

ASSET PROTECTION:

Recent updates to asset protection and Medicaid compliant strategies.
The new asset protection strategies dominating the marketplace.
The death of DAPT'S, FLP'S, GRATS, GRUTS, and tax planning, and what's replaced them.
The five essential trusts and key drafting needs to serve 99.7% of clients.
The Power of Powers of Appointment, in the right places.
Four "must have" drafting considerations and three "most forgotten" powers in trust.

MEDICAID:

Four steps to Medicaid eligibility for any client.
How to calculate the "breakeven" to ensure the proper filing date for the shortest penalty period.
Medicaid Qualifying Annuities: Hidden risks and how to properly disclose them to clients or protect from them.
The seven key factors to calculate any Medicaid case in seven minutes (or less!).
IRA's: Exemption versus taxes, how to calculate if IRA's should be liquidated or exempted in Medicaid and VA cases.

VETERANS' BENEFITS:

New fully developed claims process for veterans and widows.
Qualifying assisted living facilities as UME's.
Key language to complete the physician affidavit for more timely approvals.
Update on three year look back for VA benefits.
The key reports no longer required for VA applications.
Dangers of annuities in VA benefits planning.
The effects of the Supreme Court decision on DOMA related to veterans' benefits.

HERE'S WHAT YOUR PEERS HAD TO SAY ABOUT THE PROGRAM:

"It will change your practice and your life!" — John Koenig
"Great way to grow into a real firm and help one's community." — Antoinette Middleton
"Go to the training session and consider and evaluate upgrading your delivery of services, for me it's modernizing what I can offer." — Wally Kelleman

Are you going to miss or attend the most important event of the year? Click here now to join some of your most successful colleagues in Chicago and to be confident in the strategies you provide every day.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Medicaid Planning: The Ins & Outs of MMMNA #6 – Snap Shot Dates

April 30, 2014

by David Zumpano with No Comment Asset Protection Legal Technical Medicaid

This will be the sixth and final installment in our Medicaid planning series on MMMNA, or the minimum monthly maintenance needs allowance, which is the minimum income allowance for the community (or well) spouse in a Medicaid claim. If you didn't see the first five posts, click on the links to find numbers One, Two, Three, Four and Five.

The one thing most people don’t understand when calculating MMMNA is determining the snap shot date, which is the date used to calculate the community spouse resource allowance (CSRA). On the snap shot date the Medicaid authorities will take a snap shot of all of the client’s assets, and that’s how they determine how many assets the applicant has to be divided by two.

Medicaid law says the snap shot date is the first day of the month that the Medicaid applicant is admitted to a healthcare facility for at least 30 continuous days. So what happens if the applicant is not admitted for 30 continuous days? That breaks the required continuity and you won’t have a snap shot date. What if the applicant went in on the 15^th of the month? If that was the first of 30 continuous days, the first day of that month would be the date that you calculate the CSRA. Not the 15^th of the month, but if the client went in on April 15 and stayed at least 30 days, then we have our continuous stay on the 15^th of April and the first day of that month would be April 1. That would be the date to use our community spouse resource allowance.

A couple of details are important in this calculation. For one, hospital and nursing home stays are considered continuous institutionalization. And that’s what we’d typically call this: the first day of continuous institutionalization, and hospitals and nursing homes piggyback. So, for example, if I have a client that goes into the hospital on November 15, and then goes into a nursing home on December 3, and then into your office on January 3, what’s the snap shot date?

The first question to ask yourself is, have there been 30 days of continuous institutionalization? Your answer is yes. The client went from the hospital to the nursing home, and those two piggyback, so there have been 30 days. The next question is, when did the continuous institutionalization begin? It began on November 15, so the snap shot date is November 1, the first day of the month of continuous institutionalization.

Let's consider a different example. The client went into the hospital on November 15 but was discharged on December 3 because there were no nursing home beds available. Then the client goes into a nursing home on December 5 and comes into your office on January 3. Well, we know that that interruption is OK because, under the Medicare rules, as long as you get admitted to a nursing home within 30 days of your discharge then Medicare will pay the first 20 days of your stay in a nursing home. Medicare will pay the first 20 days of nursing home care as long as you’re admitted to a nursing home within 30 days of being discharged from the hospital and you were in the hospital for at least three days.

But we’re not talking about Medicare – this is Medicaid. We're working on what the snap shot date would be. So the question is, have 30 continuous days occurred? The client went into the hospital on the November 15 and stayed until December 3, which is not 30 days. There was another stay from December 5 to January 3, so there is no continuous institutionalization yet. Assuming that the client stays in for another two days, then you will have had 30 days of continuous institutionalization. And since the first day of the continuous institutionalization was December 5, then the snap shot date will be December 1, and they will take a snap shot of all of the assets of the husband and wife on that date. That's all there is to calculating the snap shot date.

Now that I told you how the law works, be aware that most states do not do it that way. Instead, most states will use the date you apply, which is an advantage to you. You can control the date you apply, but you cannot control the date someone is institutionalized. So again, even though the federal law spells out the rule above to determine the snap shot date, only some states follow that rule. The rest will use the date you’re in the facility and apply for Medicaid.

So that’s how we deal with the snap shot date. And again, the significance of that date is that it is the date they take a snap shot of all assets to determine how many assets the husband has, how many assets the wife has and how much can be exempted under the CSRA.

If your interested in learning more about MMMNA, consider joining us for our Asset Protection, Medicaid Planning & VA Practice With Purpose program June 9-11th in Chicago. Click here to register or learn more.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Medicaid Planning: The Ins & Outs of MMMNA #5 – Asset Tests

April 23, 2014

by David Zumpano with No Comment Asset Protection Estate Planning Drafting Software Legal Technical Medicaid

This post continues our Medicaid planning series with a deep dive into MMMNA, or the minimum monthly maintenance needs allowance, which is the minimum income allowance for the community (or well) spouse in a Medicaid claim. We've already covered some of the basics of determining MMMNA for your clients; If you didn't see the previous posts, click on the links to find numbers One, Two, Three and Four.

So, similar to the rules we covered on the individual income allowances, there’s also the asset test. Unlike the income allowances where you’re allowed $60 a month or $80 a month, under the asset test you’re allowed a certain amount of assets. The minimum is $1,500; by federal law they cannot allow you less than $1,500 of assets per month. About 80% of the states go beyond that, allowing $2,000 per month. And in a few states it's even higher. One day New York sent out a notice saying the state was increasing the individual resource allowance to $14,400, which was a windfall for our clients. There are also some states at $5,000 or other amounts, and about a dozen other states are at the $1,500 minimum.

When you see a state that has a $1,500 resource allowance, then you know it's a 239B state. What does that mean? Back in the '70s there was a code section 239B that raised the allowance from $1,500 to $2,000 federally. But some states complained, so under 239B of the statute they allowed the states to opt out of the increase. Remember, federal Medicaid laws allow the states to be less restrictive but not more restrictive. So you would think if a state allows a $1,500 resource allowance when the federal minimum is $2,000, such a state would run afoul of that standard. And you would be correct, unless that state filed an election under section 239B to maintain the $1,500 minimum resource allowance. So if your state’s minimum resource allowance is $1,500, you are a 239B state. It's a term worth knowing because you might hear it at CLEs and events of that nature.

So what about the community spouse? We know the individual can only have $1,500 to $14,400, depending on which state you’re in. The federal government addressed the community spouse question with the 1988 Medicare Catastrophic Coverage Act. The MCCA, attempting to avoid impoverishing community spouses, set a new federal minimum amount that a community spouse has to be allowed to keep. And what is that amount? Much like the federal government did with income limits, it set a minimum maximum and a maximum maximum. And for some reason, the minimum changes every July and the maximum changes every January. Last July the minimum was raised to $23,184, so the states cannot allow a community spouse less than that. If you’re in a max state, then your state will now allow the community spouse $115,920.

And again, similar to the income exercise, if the community spouse’s assets are more than the minimum but less than the maximum, then the community spouse resource allowance (CSRA) will be the amount of the community spouse’s assets. So, for example, if I were to say that a husband had $200,000 of assets and a wife had $10,000 of assets, we would first determine who went into the nursing home. If the husband went into the nursing home, the wife only has $10,000, so she would be able to take $13,184 of the husband’s excess assets and then the rest would have to be used toward his cost of care. If the wife went into the nursing home with her $10,000 of assets and the husband had $200,000, the most that the community spouse could have is $115,920, so the difference between the $115,920 and $200,000 would have to go toward the cost of care.

There are exceptions. We can keep some assets by utilizing some special exemptions. But generally speaking, the rule is very simple. The institutionalized spouse is allowed to have $1,500 to $14,400; the community spouse is allowed a minimum of $23,184 or a maximum of $115,920 if you’re in a range state, and if you’re in a max state the allowance is $115,920.

So now that you've seen how to calculate the CSRA, let's try a few examples. If a couple has $130,000 of total countable assets between the husband and wife at the snap shot date, then how much would the CSRA be? The couple lives in Connecticut, which is a range state. In a range state, how much would the community spouse be allowed to keep? Well, we know that half of $130,000 is $65,000. And according to range state rules, if x is greater than the max, then the CSRA equals the max. If x is less than the minimum, then the CSRA equals the minimum or the assets. If x is greater than the minimum but less than the max, then the CSRA equals x. So in this case, that’s what we would have. Connecticut’s a range state. And because $65,000 is below the maximum of $115,920 but above the minimum of $23,000, then the CSRA in Connecticut would be $65,000.

Now try another example: We’re in Florida, which is a max state. So even though half of the countable assets are $65,000, the CSRA cannot be less than $115,920 in a max state, so that is what the CSRA would be in this example.

How about a case in Kansas where one half of the countable assets come to $8,500? If you're asking yourself whether Kansas is a max state or a range state, well, it really doesn’t matter for this example, does it? The CSRA minimum is $23,184, so the CSRA cannot be more than the amount of assets they have. So in Kansas, which is a range state, the whole $17,000 would be exempt, but the additional $6,184 would also be exempt if that client came into additional assets.

And finally, if I’m in Arizona, which is a max state, I can never have more than the $115,920. So if the couple has $250,000, then half of that still exceeds the max. I can never have less than the minimum or greater than the max. If you’re in the middle, you get the range amount, and in this case you can keep $115,920, because there’s a total of $130,000 assets.

Hopefully these examples help you understand how this works. We will wrap up our MMMNA series with a post on snap shot dates, so check back soon.

Medicaid Planning: The Ins & Outs of MMMNA #4 – Income Cap States

April 17, 2014

by David Zumpano with No Comment Estate Planning Drafting Software Legal Technical Medicaid Systems & Processes

Thanks for coming back for more about MMMNA, or the minimum monthly maintenance needs allowance, which is the minimum income allowance for the community (or well) spouse in a Medicaid claim. We've already covered some of the basics of determining MMMNA for your clients; If you didn't see the previous posts, click on the links to find numbers One, Two and Three.

One question you might have to deal with in MMMNA calculations is the income cap, if you're in a state that has one. Income cap states are a little bit of a different animal, and they raise a question: Does the insurance allowance include the Medigap premium? Yes it does. So Medicaid will allow you to deduct any cost of insurance and Medicare will be a primary insurer, which means they’re going to allow you any insurance costs related to the Medigap because that benefits Medicaid. In other words, Medicare would be the primary payer, and Medicaid would become the secondary.

Another issue along these lines is income limits. The income limit applies to the institutional spouse only in an income cap state.To review, in our previous posts we talked about the MMMNA individual allowance and the personal needs allowance, and we went over the MMMNA for a person who is married. The income cap is a different provision. In income cap states, it doesn’t matter if you’re married or single. It doesn’t matter what your income allowances are. It’s just a simple test: If a Medicaid applicant’s income exceeds $2,130, then the applicant doesn’t qualify for Medicaid. According to income cap states, that person has too much money.

It doesn’t matter how much the spouse’s income is. This is an income limit on the applicant only. So in the case we had before where the husband made $3,000, he would be over the income cap and therefore would not qualify. It might sounds ridiculous and you might feel bad for people who are in an income cap state, but that's the bottom line.

So our usual approach in such states is to do a Miller trust, which is a qualified income trust, or QIT. In a Miller trust, the husband assigns his income to the trust and then the trust pays the cost of care. It’s kind of silly to have to take that step, but those of you who are in income cap states are probably pretty familiar with the Miller trust, so it's not a big issue. If you’re not in an income cap state, you won't have to worry about it.

That's about all we can cover in today's post. Check back back soon for a discussion on MMMNA asset tests.

To learn more about Medicaid join us at our Practice With Purpose event in June. You'll experiece 2.5 days of all that you need training about Asset Protection, Medicaid and VA.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

A Look at the Pros and Cons of Business Planning with iPug™ Trusts and LLCs

April 16, 2014

by David Zumpano with No Comment Asset Protection Estate Planning Drafting Software Legal Technical

An event not to be missed! On this free webinar we will carefully distinguish the pros and cons of the use of trusts to replace high net worth planning and planning in general for successful business owners and business succession planning using iPugs instead of LLCs.

Here's a sneak peek at what we'll be covering:

Planning for Business Owners
Planning for Efficient Gifting and Federal Estate Tax Planning
Planning for reasons such as…
- Maintaining Control
- Promoting Family Unity
- Protecting Family
- Wealth from Failed Marriages
- Managing Family Assets Efficiently
- Protecting Family Wealth from Creditors

Registration for this live event is FREE … Click here now to reserve your space!

To your success,

Dave Zumpano,

Co-Founder, Lawyers with Purpose
Practicing Attorney…Just Like You!

Medicaid Planning: The Ins & Outs of MMMNA – Part 3

April 8, 2014

by David Zumpano with No Comment Asset Protection Legal Technical Medicaid

Income Allowance:

Thanks for coming back for another session of MMMNA school. There's a lot to this issue, and it can get a bit complex, but it's an important component in Medicaid planning.

This post is part three of our series on determining MMMNA, the minimum monthly maintenance needs allowance, which is the minimum income allowance for the community (or well) spouse in a Medicaid claim. If you didn't see the first post, you can find that here, and part two is here.

Our last post got into a few scenarios involving MMMNA, but there are some additional income allowances that we need to cover. The institutionalized spouse is allowed a personal needs allowance, which as we said, ranges from $30 to $106.50, depending on the state. The applicant is also given allowance to help pay for health insurance. So Medicaid basically says, we don’t want to get stuck being the primary insurance payer, so in addition to your personal needs allowance, we’re going to allow you enough money to pay your health insurance premium so your insurance company can be the insurance of first resort and Medicaid can be your backup.

To be clear, Medicaid only exempts the cost of health insurance for the institutionalized spouse, not the community spouse. So, only the institutionalized spouse gets the personal needs allowance and the health insurance allowance. The community spouse gets the MMMNA, which we’ve already talked about. In addition, about 25% of the states also have a housing and shelter allowance, and another 25% of the states have a heating and utility allowance. These allowances are a state specific issue. The federal law does permit it, but not all the states do it. And again, it's for the community spouses only, with the intent being to make sure that community spouses have sufficient income to stay in their homes.

So again, institutionalized spouses gets their personal needs allowance of somewhere between $30 and $106.50 and they get to keep the cost of their health insurance so they can continue to pay that. Medicaid will let them do that. And the community spouse gets the MMMNA that we reviewed previously. Also, the community spouse could get a housing and shelter allowance or a heat and utility allowance if the state permits it. That's it, period. If you’ve got that down, that’s all you’ve got to know; it’s never going to change. If you're confused, it's because you’re trying to make it do something else, but it's really that simple. You just have to apply the rule.

So, no matter what fact pattern is that you are looking at, the first thing you need to determine is whether you are looking at a max state or a range state, then follow the methodology we shared in the previous two posts. Next look at the income of the husband, then look at the income of the wife. Figure out which spouse is in the nursing home, and which spouse is in the community. Then you can calculate the MMMNA. And in addition to the MMMNA, you will possibly have the housing and shelter allowance and the heating utility allowance, depending on the state. Of course, if the applicant is not married, you don’t even have to worry about that MMMNA calculation. All of the income that a single applicant gets to keep is the personal needs allowance and the health insurance premium amount.

You are probably thinking, OK, that's not so tough. And you're right, but you're not through it yet. Our next post will cover the income cap rules that factor in, so check back soon for that.

Medicaid Planning: The Ins & Outs of MMMNA – Part Two

April 2, 2014

by David Zumpano with No Comment Asset Protection Legal Technical Medicaid

This post is part two of our series on determining MMMNA in your Medicaid planning. If you didn't see the first post, you can find that here.

Our last post delved into how you determine the minimum monthly maintenance needs allowance, or MMMNA, which is the minimum income allowance for the community (or well) spouse in a Medicaid claim. If you read that post, you should be able to figure out the MMMNA for a few basic cases. So let's go through what the minimum and maximum would be, and what the MMMNA would be, in each of four scenarios.

Starting with scenario one and scenario two, the fact pattern is this:

The husband has $3,000 a month of income.
The wife has $1,000 a month of income.
The MMMNA minimum is $1,939; the maximum is $2,931.

In scenario one, the husband is in a nursing home, so we know that the wife is the community spouse, and she has $1,000 in income. Plus, we are in a max state, which means that the community spouse is entitled to the maximum income – $2,931.

What does that mean? That means of the total income of $4,000 between the husband and wife, $1,069 will be contributed toward the cost of care each month. So essentially the husband goes into the nursing home, the wife gets her $1,000 of income– or she gets to keep her $1,000, plus she gets to keep $1,931 of the husband’s monthly income. The balance of $1,069 ($4000 – $1000 – $1931)would go toward the cost of his care. (We are setting aside the discussion of his personal needs allowance, but whatever it is in this state, the amount contributed to the cost of care would be reduced by the personal needs allowance.)

What if the wife went into a nursing home? What’s the MMMNA in that case? It’s still $2,931, but now the husband is the community spouse, so he would be able to keep $2,931 and he would have to contribute 25% of the amount over $2,931. So his $3,000 minus $2,931 comes out to $69, and 25% of that would be $17.25. But remember, New York is the only state that currently requires spousal contribution for incomes above the MMMNA. In all the other states the husband as community spouse would get to keep his total $3,000 in monthly income, and the cost of care would be $1,000, the wife’s income, less whatever the personal needs allowance is for the state.

Why? Because every other state allows the community spouse to keep whichever is greater, the MMMNA or the community spouse’s actual income. As discussed in the previous post, we make that distinction because the federal Medicaid law does not require it; the law does not even allow it. The states allow it. Remember, the federal government sets the laws on Medicaid, and the states can be less restrictive, but they cannot be more restrictive. So in most states if the husband, who is the community spouse in this scenario, has $3,000 a month of income, they will allow him to keep 100% of his income. That’s why we have shown it here as $3,000, and all you would lose is the institutionalized spouse’s income of $1,000.

So how would this be different in a range state? With the husband going into the nursing home, the wife is now the community spouse, so the range state would essentially say, she can keep the bottom of the range. She has $1,000 of income, but the MMMNA says the minimum is $1,939, so she gets to keep her income, plus $939 of his income. So in that scenario she would get $1,939, and the remaining $2,061 of his income would be contributed toward the cost of his care (again less the personal needs allowance amount, which he would get to keep).

So that's the difference between a range state versus a max state. Now again, this is because the husband went in the nursing home and he is the higher income earner. In the range state, because the wife is the lower income earner, it would be the same scenario. The husband would be the community spouse. In the range state, again the top of the range is $2,931. But again, most states don’t have any chargeback. So the answer for a range state in this particular fact pattern would be the same as for a max state.

Don't feel alone if you find this confusing. Our intent was not to confuse you, but to show you that there is a science to Medicaid and how this works. Stick with us in our upcoming MMMNA posts and we'll continue to bring clarity to this fairly complex issue.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Playing “The Price Is Right!”

March 24, 2014

by Lawyers With Purpose with No Comment Legal Marketing Legal Technical

Our tri-annual retreat sparked a lot of discussion and creative thinking about the issues faced by many law firms, and one area that clearly causes a lot of heartburn is, simply, "How much?" What do you charge for your services, and which approach to pricing lends fair value to the firm and the customer alike?

Obviously, you first must make sure your fees are ethical. Whatever that means in your jurisdiction; you want to make sure that you can justify your fees ethically. Yet this is a very broad guideline, and not a particularly helpful way to set your prices. Here are a few of the common methods, along with some of the pros and cons.

Finger in the wind method – This is basing your pricing on what other people are doing in your area. It is not a bad idea to do that research, just so you can see what other people are doing and know that your prices are not way out of line. And if you are charging what everybody else is, if you are going with the herd, you’re going to be comfortable with the pricing. The downside is that, in your clients' minds, it is basic commodity pricing. In other words, they could go to you or the attorney down the street and the client will pretty much get the same thing. It is important to know what everybody else charges, but it is not a good idea to follow their lead.

Flat fee – This is a great way to charge clients, but if you base your fee on how much time you will take, then you could still run into problems. For example, let’s say you have a job that will take you three hours, and if you multiple your billing rate of, say, $250.00/hour by three hours, you decide you’re going to charge $750.00 for your service. Now, that will make you comfortable with the price because it’s based on an hourly rate and the amount of time that you estimate. The downside is, if you underestimate how much time the job will take, you will be underpaying yourself. And if you overestimate too many times, that can also be a problem, because you'll feel like you're overcharging your client, and that will eventually cost you clients. Another issue is that there are only so many hours in the day, and by using this approach you are not taking full advantage of flat fee billing and limiting your revenue based on the number of hours you work a case. One way to correct this is to estimate what it normally takes you to do a job, then build in a buffer to cover the times it might take longer. For example, you would start out estimating that a job will take you three hours, but you know what sometimes it takes you four or five, so you might average the time that it would take thus what the cost will be.

Value-base billing – What is the value of what you’re doing for the client? Let’s say you are saving a client $650,000 of their assets. Are you really only going to charge what everybody else is charging when they may not be able to get even close to the same result? If the attorney down the street is doing $2,000 for a trust, but you can do a trust a little bit differently and save $650,000, you are doing a huge service for the client, a service that the client could not get elsewhere, but doing a huge disservice to self by not charging enough. The great advantage of value-base billing is that you are giving a higher value to the clients; therefore, you can charge higher prices But if you are uncomfortable with the process and the different options available, then it will show. And your clients will not be willing to pay higher prices because your client is not not going to trust you.

Fee schedule – Whichever pricing model you choose, a fee schedule is important because it helps you avoid emotion-based pricing. Sometimes when we are talking with people, we hear a sad story or we see that the client doesn’t have a lot of assets, and we start to feel like social workers. We want to help as many people as possible, but the fee schedule will help you stick to the pricing. If you’ve done your fee schedule right and you're confident in your fees, it will help you reduce the feeling of needing to cut your fees, because you have built your fee schedule in such a way that you know the price is fair. You know that the price is worth what you’re doing. And also remember that, even though the client has a sob story or you feel sorry for them for one reason or another, you still have to do the work, and the work won't be any less because you feel sorry for the client.

On the LWP members web site, you can find our founder's estate planning fee schedule. You can use that as a guide, not necessarily for the amount that you might charge, but it’ll let you know the various services that his firm provides. That can help you decide whether or not you want to offer those or other services, and it’ll get you thinking about what you might be able to charge in your area.

Finally, you don’t want to miss our retreats. At our last retreat, we had a discussion about what happens if the client has a negative reaction to the fee – maybe doesn't want to pay that price or even tries to negotiate with you. After a great discussion, the consensus among our members was, bottom line, the price is the price. If you are confident in your price but the client resists, then you probably have a marketing problem. Bring in more people who are better able to see the value of what you are offering them. Adjust your marketing and bring in better prospects.

Aaron Miller, Legal Technical Trainer, Lawyers With Purupose

Can Veterans or Widows Receiving Service-Connected Disability Get Aid & Attendance?

March 20, 2014

by Lawyers With Purpose with No Comment Legal Technical VA

There are two different veterans benefits programs that provide tax-free income to veterans or their widow(er)s. Each of those programs can include a supplemental payment called Aid and Attendance. The question is, which one is your client eligible for and why does it matter?

When veterans have been injured while serving on active duty or have a resulting injury or disease because of their service (i.e. exposure to agent orange, post-traumatic stress disorder), they may be paid “compensation” for their loss. This is similar to payments in the private sector under Worker’s Compensation. The payment is determined based on the rating the veteran is awarded, which will be from 0% to 100% in increments of 10. The higher the rating, the more money the veteran receives. If the veteran has a rating of 100% or has been determined to be unemployable due to the service-connected injury, the veteran may receive additional income from the VA if the veteran is in need of regular assistance with activities of daily living (dressing, bathing, toileting, transferring, and eating). The additional money is called Special Monthly Compensation for Aid and Attendance. This is available to widows of veterans who are receiving, or could be eligible to receive, Death Indemnity Compensation (DIC).

Veterans who do not have service-connected disabilities may also receive tax-free income from the VA if they meet certain military, disability, and financial criteria. If the veteran served at least 90 days on active duty, one day of which came during a wartime period, and received a discharge greater than dishonorable, then the veteran is considered a “veteran” for the Improved Pension Program. In addition to the military requirements, the veteran must be disabled to receive Improved Pension, but the disability is due to factors not related to military service (i.e. a car accident, stroke, Alzheimer’s Disease, age). The VA defines “disabled” as being age 65 or above. Lastly, the veteran’s income and assets (to exclude a home, vehicles and personal property) must be under certain limits. Assuming the veteran qualifies under all standards, the VA will grant the veteran a monthly amount to bring the veteran’s income up to the VA’s definition of the poverty level (i.e. $12,652 per year for a single veteran or $16,569 for a veteran with one dependent, like a spouse). If the veteran needs the regular assistance of another person to help with activities of daily living, then the veteran can receive the Special Monthly Pension with Aid and Attendance, to increase the monthly amount paid by the VA (i.e. $21,107 per year for a single veteran and $25,022 for a veteran with one dependent). This benefit is available to widows of veterans as well, but the annual amounts payable are less.

When a client contacts you seeking the Aid and Attendance program, always ask if the client is receiving VA benefits for a service-connected disability. If so, and if the rating is 100%, unemployable, or the need for aid and attendance is related to the service-connected injury, then the veteran should seek aid and attendance under the service-connected compensation program. The payment will be higher than that of the Improved Pension program. Moreover, there are no income or asset limitations under the service-connected compensation program, which is usually the limiting factor of non-service-connected wartime veterans from being eligible for the Improved Pension with Aid and Attendance.

The Compensation and Improved Pension Programs are mutually exclusive. The claimant must choose one program or the other, or submit a claim for both and let the VA decide which would be more advantageous for the claimant. As the attorney, you can assist in speeding up the claims process by guiding the client in knowing which program would be best based on type of disability (service-connected or not), level of disability (100% or less), and income and asset levels.

The key to remember is that, whether the veteran or widow is eligible for either compensation or pension, both programs have a supplemental income benefit called Aid and Attendance. The claimant would decide under which program to apply for the supplemental payment.

Attorneys cannot charge to assist with a service-connected claim to increase benefits that would include aid and attendance because there has, presumably, been no adverse action. However, for pension claims, attorneys may assist and charge for fees related to estate planning and asset preservation that, by a result, creates financial eligibility for the Improved Pension Program. The lawyer cannot, however, charge to assist with preparation, presentation or prosecution of the application for benefits.

For more information on the VA Improved Pension Program, visit www.va.gov.

Victoria L. Collier is a Veteran and Certified Elder Law Attorney, Fellow of the National Academy of Elder Law Attorneys, Co-Founder of Lawyers With Purpose LLC, and author of “47 Secret Veterans’ Benefits for Seniors—Benefits You Have Earned … but Don’t Know About.”

The Estate Plan Audit

March 19, 2014

by David Zumpano with One Comment Estate Planning Drafting Software Legal Technical

At Lawyers With Purpose, we put a tremendous amount of time and expertise into developing tools for estate planning attorneys to help them day in and day out, in their practice and with their clients. One tool for example is the "Estate Plan Audit."

The Estate Plan Audit is a checklist of 15 questions to tap into the client’s needs. The goal of the Audit is to find out where they are currently, and where they want to be. And we can do that by asking them just 15 very important questions that address what their estate planning goals are. Then ask them to rate them each, on a scale of 1 to 10, one being not very important and ten being very important. What they’re really doing is showing us what's important in their world.

When you use the Estate Plan Audit, the best part about it is, that it becomes a non-sales process. This completely focuses on the client, without the attorney pushing any particular agenda. We’re not pushing any particular trust or plan on the client. They’re really looking at where they are now, what their needs are and what they might want.

If your an LWP members you can review our 2012 Enhancement Retreat, where members Jeff Bellomo and Susan Hunter discuss in much greater detail the Estate Plan Audit, how to connect it to the workshop and the stories told in The 7 Threats Workshop. All you've got to do is log into the members website and hover over the “LWP Process” tab, choose the “LWP Program Modules Folder,“ then scroll all the way down to a folder titled "2012 Annual Enhancement Retreat." You’re looking for the November 14, 2012, Day 1, Video 4. Start listening right about the 27 minute mark!

We hope you put the Estate Plan Audit to good use. It's a great tool for distilling all of the pieces of an estate plan into what really matters to the client, in a way that won't feel like a sales job. If you aren't a Lawyers With Purpose member, contact Molly Hall at mhall@lawyerswithpurpose.com for more information.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center