July 2020
Lawyers With Purpose Insights

In This Issue

Medicaid Planning Spend Down Strategies

Getting the Most Out of Private Workshops

Introducing LWP Member of the Quarter, Ben Humphries

Businessman meeting with clients while using a laptop

Medicaid Planning Spend Down Strategies

By Amanda Smith, Esq.

In order to get your client qualified for Medicaid benefits, you must determine how you will spend down the remaining Excess Assets prior to submitting the Medicaid application. There are two types of spend downs: compensated or uncompensated transfers. An uncompensated transfer is typically easy to recognize and often accomplished with a gift to an individual or, in LWP's preferred planning strategy, a gift to an iPug® Trust. These uncompensated transfers incur penalty periods, which we are accustomed to planning for using our LWP Medicaid Qualification Software. A compensated transfer, on the other hand, is any transfer or spending of the income or assets that results in receiving something of equal value in return. With compensated transfers, there is no penalty assessed. Some examples of common compensated transfers include Medicaid compliant annuities, promissory notes, special needs and pooled trusts, personal service contracts, prepaid funerals, household repairs, and payment of existing liabilities. Certain requirements must be met for these transfers to meet Medicaid's requirements to be deemed a compensated transfer. Let's explore them in a bit more detail.

In order for an annuity to be Medicaid compliant, and therefore treated as a compensated spend down, it must have a payout commensurate with the annuitant's life expectancy, be irrevocable and non-assignable, contain no cash value, have regular level payments of income, and name the state as the irrevocable beneficiary. If there is a spouse or minor child, the state must be named the irrevocable contingent beneficiary. According to 42 U.S.C. §1396p(c)(1)(G)(i), the state does not have to be the irrevocable beneficiary for annuitized IRAs.

Similar to annuities, in order for a promissory note to be deemed a compensated spend down, the payout must begin immediately and be paid out over the life expectancy with equal payments and no cancellation. If there is any ability for the holder of the note to assign it, the note will have a value and be deemed an available resource.

First-party special needs trusts (SNTs) and pooled trusts are also options for certain individuals. The first-party SNT is often referred to as a "D4a" trust, which is straight from the federal code citation 42 U.S.C. §1396p(D)(4)(a) where it is codified. These D4a SNTs are created with the funds of a disabled individual by the individual – if he or she has capacity – or by a parent, grandparent, guardian, or court. The individual must be under sixty-five years old, and the properly drafted D4a trust must have a payback provision whereby assets left in the D4a trust upon the beneficiary's death are repaid to the state Medicaid program up to the amount of benefits provided. Similar to a D4a SNT is a pooled trust. The pooled trust can be found in 42 U.S.C. §1396p(D)(4)(c). The pooled trust is managed by a charity and combines, or pools, the income or assets of multiple disabled individuals with similar payout provisions as an SNT. At the individual's death, the balance of the contribution is either left to others in the pool or a certain charity. In the past, these pooled trusts were the options sought after by many individuals over sixty-five years of age since the D4a SNT is not available due to the age restrictions. However, there is a trend where states are starting to treat transfers to a pooled trust by an individual over sixty-five as an uncompensated transfer. This is something, as a cautious practitioner, you will want to seek out guidance from your state Medicaid office prior to the establishment of a pooled trust for a client over sixty-five years old.

A personal services contract (PSC) is a compensated spend down so long as it meets your state's requirements. For example, some states require PSCs to be contracted into prior to nursing home admission as opposed to being created as part of the Medicaid planning eligibility spend down strategy. LWP's Medicaid Qualification Software has the most comprehensive PSC in the industry. It will calculate the optimum terms for spend down based on your client's fact pattern and state's requirements.

42 U.S.C. §1382b(a)(2)(B) allows an applicant to exempt from his or her countable resources the value of any burial space or agreement representing the purchase of a burial space for the individual, his or her spouse, or any other member of the immediate family. This means, your client can purchase prepaid funeral policies for several family members as long as it is within your state's definition of "immediate family."

As for household repairs, so long as the payment for the service is commensurate with the fair market value received, the spend down will be deemed compensated just like any other expenditure where you can show your client transferred assets and received equal value in return. Be careful of paying off debts though. Your client can pay his or her own liabilities, but paying off debts for another person would be uncompensated and subject to a penalty if completed with the five-year look back period.

Hopefully, this brief analysis of common Medicaid spend down items will help you navigate your next Medicaid case and provide more options to discuss with your clients. If you have any questions on these strategies, feel free to reach out to your LWP legal team by visiting the LWP Help Desk.

To your success,
Amanda L. Smith, ESQ
LWP Director of Education

Getting the Most Out of Private Workshops

By Phil Miner, LWP Practice Coach & Implementation Specialist

Business woman holding a pen and looking over paperwork

As part of the LWP marketing strategy, we develop relationships with allied professionals. This is known as the LWP RMS™ (Relationship Management System). One of the key strategies in working with other professionals is to provide private workshops for the clients or to work together to co-promote a workshop. There are a number of members that have excelled at this strategy and sometimes have at least two private workshops per month. These workshops provide you an opportunity to have several prospects in front of you for a small financial investment, as the real investment is in the relationship.

This article details the five keys to having successful private workshops.

Understand goals and set expectations.

Many people get so excited upon learning that the professional relationship wants to have a private workshop that they jump right into scheduling a date and time. Unfortunately, proceeding this way often equates to jumping the gun and is one reason why private workshops could fail.

Before moving forward, be sure to get clear on both, your professional relationship's goals and objectives for the private workshop as well as your own, because if you don't, you won't be able to tell if the event was a success. This also follows LWP's primary communication model of Power-In-Partnership™, which is getting behind the other person's need first, and then enrolling that person into your need.

The first step should be to understand why the professional relationship would like to have the private workshop. What's in it for them? You can determine the answer simply by asking the professional relationship what his/her goals are. Think about the book "Start with Why" by Simon Sinek, and remember that when it comes to KOLBE and communicating properly through it, it is important to agree upon the goals before you work on how to achieve them. Then, ask the professional relationship if s/he would like you to share anything with the audience as part of the workshop either to enhance credibility or to offer something of perceived value. Lastly, be sure to share your own goals with your professional relationship, which should include assurance that together you are marketing to an audience that has a need or desire to have estate planning or asset protection planning; workshop attendance; and the percentage of attendees you're hoping will schedule a Vision Meeting for which you've waived your fee.

Commit to proper planning of the workshop, including its timing.

Poor timing is another reason that private workshops fail to produce desired results. If you haven't left enough time for proper planning, things may become rushed, with marketing going out late. Don't put yourself into a situation where timing causes a workshop to be less productive than it should have been. You're investing a lot of time and effort, and you do not want to waste either one.

For the best chance of success, be sure you are aware of workshop times that are likely to work well for the audience you are trying to reach, as well as any potential scheduling conflicts that could affect attendance at your event.

You will also need to identify the timing needed for the approval process, including what the professional will need to submit for approval and any potential compliance issues.

Establish your processes.

Don't over-complicate it, but be sure to establish what your registration process is, as well as who will be handling registration and how the information will be shared. Doing so will help attendees see that you have a successful process in place.

Be sure you have cancellation, confirmation, and follow up processes in place, too. You'll want to clarify how attendees can indicate their request for a Vision Meeting; will it be by completing the evaluation, or will they have the opportunity to schedule right at the workshop? Some members provide links that allow attendees to schedule a Vision Meeting, while others make follow-up calls after the workshop, similar to your firm's existing process.

Other questions to consider are whether you will have a cancellation process, in which an attendee may be offered the option to attend one of your firm workshops in the future. What is the process for confirmation to help ensure attendance? Is there anything attendees would like to see as part of the process? Asking these questions helps clarify the process in the planning stage, and it should also help eliminate confusion as well as any obstacles to following up with attendees effectively.

Review the marketing plan, even if your professional relationship indicates that s/he will do the marketing.

I can't tell you how many times I've seen registration for a private workshop fall far below expectations, and upon further inspection, a lack of proper marketing planning or execution was the culprit.

For the best chance of success, you'll need a clear marketing strategy, complete with messaging, deadlines, and your "whos" all defined.

First, be clear on who the target market is and what strategies you'd like to use to promote the event. Your messaging, one of the most important elements of marketing a private workshop, should appeal to your target market, and to execute that well, you'll need to understand why your target market would want to attend the event.

The budget for the event should have started to take shape once your ideal promotional strategies were identified. Once you've quoted those strategies, be sure to include all items on a budget worksheet that you and your professional relationship can review and approve together, preferably before any money is spent.

Then, decide who will be responsible for which marketing "To Do's" and establish firm deadlines. It will most likely be your responsibility to create the messaging for the promotion and for your professional relationship to ensure that it will resonate with their clients or with the market that you're targeting.

I also suggest scheduling at least one or two check in calls with your professional relationship to verify deadlines are being met and to review the registration number. If everything is on target, then you can just have a simple phone call. If anything is off-target, you now can meet and strategize what could be done for corrective action. You can't afford to wait until the day before the private workshop or even 48 hours before-hand to check in, or you risk discovering a critical error: an important deadline that might have been missed, or a promotional email that was not sent, and as a result there are only three registrations.

Have a follow up process for the event.

Lastly, don't neglect to schedule a follow-up meeting after the event to review the results! I've seen many people skip this step, and often it's because they didn't set goals and objectives in the beginning. If you are going to have an effective working relationship or plan future events together, you and your professional relationship need to ensure the event met each other's goals. If it didn't meet your goals, try to understand what didn't work and decide if it is worth trying again. If it was a success, discuss what's next for the relationship, and how you will be working together to service the clients who requested appointments.

With private workshops, the more you do in the planning stages, the less you have to figure out and assume; those are ingredients for failure. Following these five key steps will ensure that you have done everything possible to maximize the time and effort that goes into having a private workshop and ensures the best experience for you, the professional relationship, and for the attendees.

Also, remember why you have private workshops. It is not for the money or profit; those are the positive results, but not the reason. Why do you have private workshops? Knowing and understanding the reason why you have private workshops will make it much easier to enroll professional relationships into this valuable strategy. Following the five key steps will make this a process from which all will benefit.

Introducing LWP Member of the Quarter,
Ben Humphries

Ben Humphries

Known by his LWP coaches not only for his steadfast determination in working to achieve his goals but also for continually striving to help others, attorney Ben Humphries of the Kentucky Estate Planning Law Center in Elizabethtown, KY, has made a number of notable achievements since joining LWP in May of 2019.

In fact, within just a few months of joining LWP, he had been retained for five trust plans within one week, and now just a little more than one year after joining, he has experienced his highest grossing year, effectively doubling his revenue while making it more consistent. Even COVID-19 didn't stall his progress; before the end of March 2020, his firm had already adapted to the new challenges posed by the pandemic and had changed its processes to conducting workshops via Zoom and recorded them for future use.

LWP sat down with Ben to talk about his many successes.

What brought you to the practice of law?
Growing up, my parents were my heroes, but in addition to them, my Uncle Jimmy was also a hero to me. He was a judge who had opened his own law firm. I looked up to him when I was growing up, and I respected the practice of law because of how he did it. He was held in high regard professionally, and it was my dream to practice in his firm. When I graduated law school, he had become a judge, and I was hired to work in that law firm.

What brought you to estate planning?
It was a time in my practice when I was looking for change. I was growing in my faith and changing my mindset, and I wanted to practice law without being involved in cases involving lawsuits or wrongdoing.

I also had been partners with another attorney, and while he was looking toward retirement, I was looking to change my practice to something that I could do on my own once he retired. At that point, I had done some estate planning, but not exclusively, and the field, itself, was changing. Folks were either “all in” or not doing estate planning at all. Those who were doing it were going beyond what was typical of a general practitioner's knowledge and skill set.

How did you come across LWP?
I had noticed the change taking place in the field, and I'd attended events, but I couldn't figure out how to make the change. I had a hard time taking the leap. I had met someone who was with LWP. She told me her story, and that she'd made an investment in herself and in her life by joining. I then saw her again a year later, while I was in the same position I'd been in the previous year. She re-told me the same story, and that time, she said that I'd have to take a leap of faith. Joining LWP was more about me and my readiness than about the opportunity not being there sooner.

What successes have you had by using LWP's systems and processes?
On my first call with Mandy, I told her that I felt like I was handcuffed to my desk, literally, and that I was not allowed to leave. I had a life with my faith and my family, but it was being neglected. LWP has helped with the consistency of income that's allowed me the time to devote to my faith and my life. You're no longer so fearful because you know what's to come tomorrow, next week, and next month. You can breathe and can create a more balanced life.

How tightly do you follow LWP's systems and processes?
Over the last 3 months, we've followed it exactly, using every single piece.

What are your favorite LWP tools?
I like the workshops with script because it's turnkey. It's ready with some minor adjustments. I needed that, as making the transition was hard. It's like the ready-made cookies that you pull out of the freezer and put into the oven—they're great! Prior to the workshops, I was afraid of being wrong, but by following the script and stories, I knew I wasn't wrong.

What kinds of trends are you seeing in your area?
I have 100,000 people in my county, and that's my market. There are other attorneys out there who are pushing the field of estate planning in my market, so I have to stay current and visible. That's one of the things that LWP does, is to call on you to market your firm because most of us have been trained not to do so.

My market is changing. My market used to be those with whom I went to church or played sports, etc. It used to be who I knew in order to get the business. Now, I'm able to meet clients whom I don't know, and I never would've met them before I joined LWP.

How has COVID-19 affected your firm?
COVID-19 made us re-evaluate everything. When it hit, my main paraprofessional was in her 70s, and she no longer felt comfortable being in the role. We knew that we needed to hire another team member and that we wanted to hire someone who could become like Briana is for Dave Zumpano's firm, so we decided to hire above our current need, and soon Julia joined us.

She's picked up everything very quickly. It was scary, but at the same time, there was a lot of burnout among my other employees, and we needed someone even if training would be difficult in the beginning due to the pandemic. With Mandy and Phil's help, it's been great.

Altogether, having COVID plus a new person on the team required a lot of faith plus a trust in the systems.

Have you attended TAPER, and if so, what was one of your greatest TAPER learnings?
I've been to every TAPER since I joined LWP. The difference between going with your team vs. without them is that you'll grow so much more if you take your whole team, even if it costs a lot. You get a whole lot of momentum coming out of it if you take your whole team, but even if you attend with just your partner, it forces you to address the things you haven't had a chance to address, plus the legal updates are all helpful. It's been fantastic for me.

I've had a few favorite sessions. In Atlanta, I really liked Paula Friedland's session. As a result of what I heard there, she is now one of my coaches. So, you're introduced to high level people and talent. She exposes you to the rest of the world, the country, what's going on and gets you outside of your bubble.

Dave's session on daily, weekly, and monthly planning was awesome, and the VA accreditation session was also really good.

Is there a particular client success story you'd like to share?
I kept having clients come in and want to do this kind of trust or that kind of trust, and I wanted to do it for them, but I didn't know how. So, I told them I was getting trained at Practice With Purpose, and if they didn't mind, to come back after the training. I learned a lot at PWP, and after completing it, I was able to meet my clients' needs, whereas before, I had been worried about not being able to do a good job or about not knowing cutting edge law. Now, I just have a sense of pride in what I'm doing.

What's something that people may not know about you?
My wife and I met on a blind date. Now, we've got 5 kids. I'm also a runner who's run six marathons, and I've been leading a food pantry in my community for two years, and we serve 1200-1500 people each month.

What is your favorite book, and what is the impact that it's had on your life?
I love to read, and I generally have three or four books going at a time. I try to read the Scriptures every day as best I can, but I also enjoy reading about Michael Jordan's trainer and about the 4-minute mile.

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