Planning Trends and Incorporating Medicaid Planning into Your Practice

Amy: Hi, I’m Amy Beacham, Communications Director at Krause Financial Services. I would like to welcome everyone to today’s episode of our newest series, Industry Insights. In this series, we discuss changes that occur in the elder law space and explore topics that are relevant to you as an elder law attorney. Working with elder law and estate planning attorneys across the country and consulting on hundreds of crisis planning cases a month, we see trends that affect the elder care space, and we want to share some of those insights with you today. I have a very special guest on the show. Many of you know him from industry events and have been working with him for an entire decade… Mr. Aaron Kempen. Aaron has worked closely with many of our attorneys throughout the years and now helps new attorneys adopt Medicaid planning into their practice. Welcome, Aaron.

Aaron: Thanks, Amy. It’s a pleasure to be here.

Amy: So, you’ve been working with our office for quite some time now. Can you describe a little bit of your experience and your background in the Medicaid planning area?

Aaron: Yeah, absolutely. I’ve been with Krause Financial Services for about eight and a half years now. I’ve worked with hundreds of attorneys across the country to help protect their clients’ assets and crisis Medicaid planning. I’ve sold probably over four to five thousand annuities in my tenure at Krause. So, I’ve definitely seen my fair share of things here.

Amy: Okay, great. So, you have recently transitioned into a new role at Krause Financial Services as our Director of Business Development. Can you tell us a little bit about that and what you do?

Aaron: Yeah, absolutely. So, in my current role, I’m more focused now on educating new attorneys on how to use our products appropriately to help protect their clients’ assets. So, I do a lot of webinars; I travel to a lot of live events; I do speaking engagements across the country. Really, again, the goal is to help new attorneys understand our products and how to use them effectively.

Amy: So, a lot of travel around the country lately, a lot of speaking with attorneys all over the place… so you must be pretty in tune with what’s going on in the Medicaid climate. Can you tell us a little bit about any planning trends you’ve noticed this year?

Aaron: Yeah, I’ve definitely seen a good amount of trends. The first one that comes to mind is how promissory notes seem to be under siege in various states–for example, Michigan and Wisconsin. They’re having issues with, really, with the promissory note being the Medicaid annuity’s main competitor. It’s favorable for us, and we like it. But, really, it’s probably best for the client as well just because it’s so much easier than a promissory note. With a promissory note, you have to make sure that whoever that trusted individual is–they’re making those payments on time, they’re responsible. And even if they are the best individual for that, there are outside circumstances that they just can’t control. So, if they are at-fault in a car accident, for example. Or there are lawsuits, bankruptcies, divorces, things of that nature–those will all affect those funds that trusted individual receives. Whereas, if you just purchase the annuity, you’re buying it from an insurance company, you know that the insurance company is going to make those monthly payments each and every month for the same amount on the specified payment date. So, it’s really just one less thing that the family has to worry about.

Amy: Okay. So, it sounds like in those states where maybe promissory notes are coming under question or they’ve passed recent laws banning promissory notes, really, the MCA is a great alternative for people.

Aaron: Absolutely. And, again, not just saying this because we work at Krause Financial, but, really, it is a superior product than trusting a loved one to–everything that’s going on in their life, that’s just one less thing they have to worry about.

Amy: Sure, take the burden off the family member.

Aaron: Exactly.

Amy: Great. Okay. Any other planning trends?

Aaron: Yeah, another trend I’ve seen a lot is states are implementing hard income caps for the institutionalized individual. So, aside from just the Miller Trust, if you’re in a Miller Trust state, some states are implementing hard income caps, where the income has to be less than a specified amount as opposed to the private-pay rate, which is typically what we’ve seen. I’ve seen more and more states using a hard income cap. And that’s really going to affect, most of the time, the Gift and Annuity plan because you want to make sure that your income would be less than any hard income cap to make sure the client is otherwise eligible so the penalty period commences.

Amy: Okay. Just a quick note for our audience–as more and more states are implementing those hard income caps, just make sure that you are logging in to your Attorney Access account and accessing your state figures, and downloading your state desk references. If your state has one, that information will be on there. Any other planning trends?

Aaron: Yeah, another planning trend I’ve seen, and it’s not so much using an annuity, but Long-Term Care Insurance for the healthy community spouse. So, kind of the trend I’ve been seeing is you would do the crisis Medicaid planning for the institutionalized spouse, qualify them for Medicaid. And then, as those annuity payments are getting paid back to the community spouse, assuming the community spouse is healthy, I’ve been seeing Long-Term Care Insurance policies being purchased on behalf of the community spouse to protect the assets as they get them back. Generally speaking, if the community spouse is relatively healthy and under the age, I believe, of 80 years old, we can typically get them qualified for Long-Term Care Insurance policies.

Amy: Okay, great. So, with all this information that we’ve talked about today, why is it important that attorneys stay on top of trends like these?

Aaron: Yeah, it’s important to stay on top of the trends so you know what planning techniques work or do not work in your state because obviously, the underlying goal is to qualify your clients for Medicaid. So, it’s extremely important to stay on top of these trends. For example, with the hard income cap, if you were not aware of if your state had that or not and you had the income exceed that hard income cap, they’re not going to be considered otherwise eligible and that penalty period would not start. So, it’s going to create a lot of problems if you don’t stay up to date on trends.

Amy: Sure. What are some of the other ways that Krause Financial Services helps attorneys stay on top of the industry?

Aaron: One of the best things you can do is sign up for a free Attorney Access account at medicaidannuity.com. As your state’s figures update, you’ll receive email notifications about that. If there’s a pertinent court decision in your state or just other industry trends that we see, you’ll receive notification of that update. So, it’s a very easy way to stay on top of the planning figures and various trends in your state.

Amy: Okay, great. So, for any of those new attorneys that are looking to incorporate Medicaid planning into their practice, what are the first steps that they should take?

Aaron: A great step would be to go to our website, medicaidannuity.com. There’s literally a wealth of information on there, whether it be our pre-recorded webinars, shows like this, or other videos as well as case studies, state-specific figures, and also, as a new feature we’ve added, you can click to schedule a demo with myself so we can go over planning case studies, if you just have general questions about how to work with us, I can answer those. And if you have a case you think may be a good fit, you can contact us. We’ll discuss the case facts with you. If it turns out an annuity is a good fit, great. If not, we’ll be the first ones to let you know it’s not a good fit and there are other planning strategies you should be looking at.

Amy: Okay, great. Well, that was really helpful. Thank you, Aaron, for your insight. And remember, adding Medicaid planning to your practice is only a click away at Krause. If you have any questions about how Krause Financial Services can help you in your practice, just give us a call at 855-552-5893. Thanks for watching.

Aaron: Thank you.