Long Term Care Planning


Let us help you build the foundation to enable you to achieve your asset protection and estate planning goals

At Levandowski & Darpino, LLC, we have a perspective on writing wills, powers of attorney, and health care directives that many attorneys do not have. We know the actions that a client's family will need to take as the client ages, especially if the client eventually requires long term care. We include provisions in our estate planning documents that will maximize the opportunity for the family to preserve the client's home and life savings while, at the same time, getting the best possible care for the client and insuring that the client’s wishes regarding their health care are understood and honored.

"Enhanced" Financial Power of Attorney

Few people realize how critically important the financial power of attorney is and the fact that they are not all the same. The person who signs a power of attorney is called the "principal." The person appointed to handle their financial affairs is called their "agent." The agent only has the authority to do what is permitted by the power of attorney document. Most power of attorney documents do not permit the agent to take the actions necessary to preserve the principal's assets in the event the principal needs long-term care. Of course, the first priority when we serve a couple is to preserve their home and life savings for one spouse if the other needs long-term care but we have seen many power of attorney documents from other law offices that do not permit the agent to take the actions necessary to accomplish that very important goal. If the power of attorney is not sufficient, or if one has never been executed, the family has to go to court to get a guardianship, after which all financial actions have to be approved by the court. The court does not supervise your agent under a power of attorney so no court action is required when the provisions of the power of attorney document are sufficient to accomplish the family's goals.

At Levandowski & Darpino, LLC, we offer an "enhanced" financial power of attorney that has specific language regarding gifting and trusts and other issues critical for asset protection purposes. Under Pennsylvania law, your agent is not presumed to have these powers without express language in the document.

The gifting and trust powers contained in the powers of attorney that we will prepare for you will give your agent all of the legal authority necessary to take actions to protect you and your assets in the future, if you are not able to do so because of a disability. Since no one knows what the future holds, in terms of your circumstances, government programs that deal with long-term care, or laws governing long-term care, the only way to adequately protect yourselves is to appoint a person that you trust to act for you if you are not able to act on your own. This is what the "enhanced" power of attorney does for you.

Medicaid Protection Wills

As far as your Wills are concerned, here is a possible scenario that you should protect against: one of you is in a nursing home and getting Medicaid benefits and the spouse living at home dies first. If this should happen, your estate could be lost because Medicaid would force the spouse in the nursing home to spend down the estate. You might think that this situation can be avoided by both of you executing Wills saying that, if the surviving spouse is in a nursing home, the estate goes to other heirs, such as your children. However, it is a little more complicated than that. Under Pennsylvania law, one spouse cannot completely disinherit the other; a surviving spouse always has a right to one-third of a deceased spouse's estate no matter what the Will says. Because of this law, Medicaid would force the surviving spouse to take "against the Will" which creates a complication for your executor. There will be language in the Wills that we prepare for you which simplifies estate administration for your executor because the surviving spouse will be "bypassed" with respect to two-thirds of the deceased spouse's estate. Medicaid wants the surviving spouse's one-third share to be spent on the nursing home. In addition, there will be provisions which attempt to protect the surviving spouse's inheritance from being spent on the nursing home.

Health Care Power of Attorney, Living Will (also called Advance Directive)

If someday you are in a health crisis and are unable to understand and communicate your health care decisions, your doctor will turn to your loved ones for direction. At Levandowski & Darpino, LLC, we believe it is very important for each client to designate who will make their health care decisions if they cannot, and to rank the decision makers in the order in which the client would want them to serve. This is done in the health care power of attorney. The purpose of the ranking is to avoid the scenario where two people with equal decision-making authority disagree, in which case the family would be forced to go to court to have a decision-maker appointed by a judge. Of course, we hope your family members would all be in agreement but we have seen unfortunate situations where that was not the case.

We encourage our clients to discuss their wishes with their families. If the client feels they would not want "extraordinary measures" if they were close to death, we can provided a living will in conjunction with the health care power of attorney. We like to tell our clients that they are giving their loved ones a gift by putting their wishes in writing.

Medicaid Asset Protection Trust

For our clients who are in good enough health that they don't expect to need nursing home care in the next five years, it is very wise to consider an asset protection trust. The purpose of such a trust is protect the client's home and, possibly, other real estate and/or some financial assets from Medicaid, including Medicaid estate recovery. Putting the home in trust does not adversely impact the client at all because the client retains a right to live there for as long as they choose and retains all the tax benefits of home ownership.

Nobody wants to think that they might someday have to go to a nursing home but, with life expectancy increasing all the time, none of us knows what the future holds. If someone does need nursing home care, why not utilize Medicaid which is accepted in just about every nursing home in our area. This is especially important for a married couple because each spouse is concerned about the other spouse’s financial well-being for the duration of the latter's life.

It is best to establish and fund your trust sooner, instead of later, because Medicaid has a five year look-back. Five years and one day after the trust is established, the assets in it are safe and the client can get Medicaid benefits. If the client unexpectedly needs nursing home care before the five years have passed, the plan can be modified, provided, however, that the client can still manage their own affairs (which is usually not the case if they are in a nursing home) or the power of attorney document includes the necessary "enhanced" trust powers.

VA Aid & Attendance Benefit

We also do trust planning for those clients who now qualify for VA Aid & Attendance, the benefit that helps wartime veterans or their surviving spouses pay for care at home, in an assisted living or personal care home, or in a nursing home. The type of trust we use for this purpose will protect the client's assets for Medicaid purposes too, after the five year look-back period, but it also satisfies additional requirements necessary so it will "work" for VA purposes. Today there is no look-back for VA purposes so we can transfer assets to trust and the client can immediately thereafter qualify for the VA benefit. However, VA is expected to implement a three year look-back period very soon. For wartime veterans or their surviving spouses who are still healthy and independent, it is wise to establish a VA trust now; hopefully, the three years will have passed by the time they need the benefit. As in the case of the Medicaid trust, the plan can always be changed if the client’s circumstances change, provided the right power of attorney is in place.