EFFECTIVELY UTILIZING LONG TERM CARE
INSURANCE AS PART OF AN ELDER LAW AND ESTATE PLAN
By: Anthony J. Enea, Esq.*
The most often heard response from my clients when recommending the purchase of Long Term Care Insurance (ALTCI@) to them is something to the effect that AI don=t want to have to pay the premiums for the rest of my life.@ For many 55 to 70 year olds a potentially lengthy premium payment period is a psychological obstacle they are unable to overcome in making the decision to purchase LTCI.
Interestingly, since the enactment of the Deficit Reduction Act of 2005 (ADRA@), which became effective on February 8, 2006, my clients have become significantly more receptive to the purchase of LTCI when made part of a comprehensive elder law plan. As a result of the DRA, Medicaid asset protection strategies, such as a non exempt transfer of assets outright or to an Irrevocable Medicaid Qualifying Trust, will trigger a five year look back period. In addition, a non-exempt transfer will impose an onerous period of ineligibility for Medicaid nursing home, if an applicant for Medicaid nursing home applies for Medicaid within the five (5) year look back period. Thus, the implementation of the most common Medicaid asset protection strategies will surely trigger the creation of a five (5) year look back and an effective five (5) year period of Medicaid nursing home ineligibility. Once the client has created the look back period by transferring a significant portion of his or her assets for Medicaid planning purposes, an ideal opportunity has arisen for the client to purchase LTCI to protect him or herself from the cost of a nursing home during the five (5) year look back period. It would be most prudent for the client to purchase LTCI at the same time as effectuating Medicaid planning to provide coverage in the event he or she needs nursing home care during the look back period. Once the five (5) year look back period has expired, and the client has now protected his or her home and/or other assets, he or she can then decide whether he or she wants to keep the policy.
Utilizing LTCI as an integral part of an elder law plan rather than a stand alone long term care option in my experience allows the client the comfort of knowing that there is a light at the end of the tunnel as to the payment of policy premiums, rather than being placed in the difficult position of choosing to purchase a policy that he or she may never utilize the benefits of, with the possibility that premiums will have to be paid for a potentially lengthy period of time.
Clearly, this approach requires a coordinated effort between the elder law attorney and the client=s financial advisor or insurance agent to explain to the client the benefits of utilizing LTCI as part of an elder law plan, and as a buffer against the cost of nursing home care during the period of Medicaid nursing home ineligibility.
*Anthony J. Enea, Esq. is a member of the firm of Enea, Scanlan & Sirignano, LLP of White Plains, New York (914-948-1500). His office is centrally located in White Plains and he has a home office in Somers, New York.
Mr. Enea is the Treasurer of the Elder Law Section of the New York State Bar Association and is the Editor-in-Chief of the Elder Law Attorney, a quarterly publication of the Elder Law Section of the New York State Bar Association.
Mr. Enea concentrates his practice in Elder Law, Asset Preservation Planning, Guardianships, Trust and Estate Planning, Estate Administration and Trusts and Estates Litigation. In his practice he has represented numerous families that have loved ones suffering with disabilities and the special planning needs attendant thereto. Mr. Enea is also fluent in Italian.