By Rick Law, Elder Law Attorney and Founding Partner at Law Elder Law in Western Chicagoland. Every senior should have a working understanding of the differences between Medicare and Medicaid.  Unfortunately, many seniors believe the myth that Medicare will cover their long-term care costs. It will not.  Medicare cares about your medical expenses if you are getting better – and only up to 100 days. Medicaid, on the other hand, is a medical assistance program that helps many people who cannot afford medical care. Medicaid cares about your medical expenses only if you are poor.  Medicaid is a needs-based program.  Medicaid is administered by each state in conjunction with the federal government.  It is a combination of both state and federal tax money. Most states have long-term care Medicaid programs that include both community care programs and nursing home Medicaid (long-term Medicaid).  Illinois is unusual in that care in assisted living facilities (those legally termed Supportive Living Facilities, or SLF) may be covered by Medicaid. The community care services program is a Medicaid waiver program that provides community-based social, health, and supportive services as an alternative to institutional placement in a nursing facility. The maximum number of hours available per month is 115 hours, but that usually includes coverage of an elder day program. Another myth that causes problems for seniors is believing that they can qualify for nursing home Medicaid even though they have followed the IRS rules that allow them to give away up to a certain amount per year. Unfortunately, nursing home Medicaid does not usually allow for gifting of any kind. Medicaid rules are not the same as the Internal Revenue Services rules! Medicaid has a “lookback” period of five years. If there is gifting during that period of time, individuals can be penalized for the non-payment of nursing home services. The state wields a big club in this area. Elder law estate planning attorneys can help you with the ins and outs of both Medicare and Medicaid.  When a senior needs nursing home services, it is wise to review the situation with an elder care attorney. If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 630-585-5200 or 800-310-3100. Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now. Sincerely, Rick L. Law, Attorney, Estate Planner for Retirees Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care. 

By Rick Law, Elder Law Attorney and Founding Partner at Law Elder Law in Western Chicagoland. Annuities are among the most misunderstood investments.  Annuities are investment contracts. They are not equity investments like stock. They are not debt investments like bonds. They are contractual agreements between an insurance company and the purchaser. These contracts are written by insurance company lawyers, who often write in a way that’s difficult for the layperson to understand. Too many annuities are sold based on YTB, not ROI. “YTB” is our acronym for “yield to your broker.” “ROI” stands for “return on investment.” ROI is return on investment to you. Annuities are often misinterpreted by the buyer. The annuity salesperson often points out a bonus incentive, called a “bump,” to buy the product. The salesperson tells the buyer that he/she will receive a 5 percent, 7 percent, or more bonus. The buyer mistakenly believes that the bonus is an actual cash value increase of added dollars. But in reality, the bonus is an additional accounting ledger increase for determining the amount to be used for income payouts. It is a real bonus, but it may not as valuable as it’s made out to be. Insurance companies are required to maintain enormous capital reserves, and for that reason they have a historical record of surviving and thriving in both good times and bad. They are far better capitalized than any government, any bank, or almost any other type of company. (Apple or Google may have as high a percentage of reserves.) For investors with a low to moderately low risk tolerance who want to sleep soundly, life insurance company-underwritten annuities may be a safe choice. When money is invested, the insurance company is forced to set aside legally defined reserves to underwrite the company’s contractual obligation to pay you either for an insurance policy risk or for a contractual amount of dollars as defined in the annuity contract. Reserves are specific to the individual insurance company’s financial serves and current surplus. State law governs the amount of reserves that are required to be held. It’s not unusual for state regulators to require insurance companies to maintain a cumulative combination of both a reserve, plus a surplus (cushion) of $1.10 for every dollar received as a premium. Life insurance companies have another advantage over banks and corporations as investments. Insurance companies do not pay taxes on their reserves, which are their invested assets. While they do pay taxes on their operating net income, the accumulations necessary to cover the policy obligations are treated as tax exempt investments. This tax advantage provides the life insurance companies a significant benefit compared to banks, which must pay income tax on their investment-related profits. If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now. Sincerely, Rick L. Law, Attorney, Estate Planner for Retirees. Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law Elder Law, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 630-585-5200 or 800-310-3100 for your free consultation now!