If you are like most people near or in retirement, your biggest fear in terms of financing, the quality and much deserved retirement of your dreams is unreimbursed medical expenses. We say that we have a nest egg for that rainy day. Let's face it at a certain age, the rainy day is always medical. I receive no more questions with more anxiety than those about Medicaid.
We take a deeper dive into Medicaid in this episode. I walk a BoomX Academy student through Medicaid strategies, basic Medicaid rules, how Medicaid works and proven strategies to use Medicaid to your advantage, lawfully and ethically. We have a lot to cover today. Let's get started.
Welcome, BoomXers. Let's throw out the old playbook. It's time to tear down the traditional way of looking at your life and money. And leverage the laws of money to our advantage. That's right. There are laws of money and those who learn and leverage the laws of money win. And sometimes win big. Stay tuned as asset protection attorney Darol Tuttle, educator, and leader of the BoomX Nation shows us how beginner investors, entrepreneurs, fellow attorney.
Are you ready? Are you ready? Let's arm this bomb. Now, here's the BoomX Show the laws of money.
I tell you that one thing I hear in my practice over and over and over again, and from listeners of the podcast, is this a concern about retirement and in particular financing retirement. It's a simple question, really. Will I have enough money? Will I run out of money? And I've seen people in fact most people can overdo it. Save too much. That's a product of, in part fear. Fear of that worst case scenario, and that is becoming impoverished during retirement so that you are not living the life that you want to live and you deserve to live.
You've worked your entire life. You save, you did the best you could. And you know, it's not fun to see clients anyone really whether they're my clients or not get that wrong.
In most cases, everyone has unexpected expenses. The tree in the front yard dies. Your spouse, suddenly needs a root canal, but that is, is not compared to unexpected long-term care costs, which are monthly.
And the law firm record for the most paid for long-term care is $30,000 per month. Second place for most paid for long-term care is $18,000. And that simply devastating to retirement. And it's not just devastating to the person who becomes sick, but it's devastating to the family that spouse who might be well, who might be younger in particular.
Yeah. Even $5,000 more per month is flying out the window to pay for care for one spouse. And the other spouse is perfectly fine. She cannot help but wonder, oh my goodness. Is there going to be enough leftover for my own retirement? That's why making financially responsible decisions in retirement is so important and understanding the funding sources available to you is important to include long-term care insurance to include income producing properties, maybe rental income to include Medicaid, Medicaid benefits, waiver program benefits such as copes, veterans benefits.
Today, I answer a question about Medicaid that occurred in the BoomX Academy as a reminder, the podcast is fine, but the academy is awesome.
For a modest fee of $1 per month to test drive it. And $40 a month thereafter, you will be automatically rolled in the nest egg course. The nest egg course teaches you a proven legal strategy to protect your asset when the time comes, when it's necessary to do so against unreimbursed medical expenses.
There's a series of lessons, tutorials that I have produced that goes over this in greater detail. And you will be able to draft a legal document necessary to do it and compare that to the cost of that information, the cost of the legal document. If you were to hire an attorney, I charged, for example, not to be uncouth, but just to give you an idea of the value proposition, that exact same legal document that I draft for my clients if you were to hire me. The fee for that is $1,800, but yet by enrolling in the BoomX Academy, go to the course and you can receive the same exact work product. And if you have questions, remember that membership $1 test drive for the first month, $40 a month thereafter. Actually the price is going up to 44, 2022.
Inflation, what can I say? We live in inflationary times. There's no denying that. So the price is $44 per month. And that will not break the bank in the value proposition of the knowledge and increasing your legal literacy and teaching you how to protect your assets against unreimbursed medical expenses. It far exceeds that pittance of an expense.
So I hope to see you there because as a member, $44 a month, you can attend office hours, which are live Q and a sessions with me each and every Thursday at three o'clock Atlantic time, which is currently 11:00 AM Pacific time. And it's 2:00 PM Eastern time and all the other times don't, and you'll have to figure it out yourself. But living in Puerto Rico, I'm at Atlantic time and I didn't even know there was an Atlantic time.
I've lived my entire life on the west coast of the United States in Pacific Time. The Pacific ocean, but yes, there is an Atlantic ocean and Puerto Rico is a territory of the United States and the timezone is Atlantic and it does not observe daylight savings times. So we are the rock of Gibraltar of time zones.
And we always refer to the references Atlantic time where I'm located, But that's each and every Thursday. And you can attend and ask any questions that you want to, speaking of questions, today's episode is my answer to a question about Medicaid. I will talk about Medicaid strategyies. Some of the detailed rules that you really need to know the difference between eligibility rules and recovery rules.
It's very, very important. I also talk about things that are not legal, just how Medicaid industry works, how assisted living facilities charge money, how you can look up the price for any assisted living facility in America. Now I think that we will start with that exact thing. I'm gonna, let's just kind of travel back in time to office hours that occurred last week in early February, 2022, and one of the BoomX students asked a question that I've heard so many times in my career about Medicaid.
Get you a better place than just the Medicaid contribution would bother you. I think what you're saying is Medicaid will only pay for a like can a third party pay for an upgrade? Basically the answer is yes. But if you do it right, there's no need for that because, well, because like, look at okay.
Average assisted living facility is $5,750 per month. That's a big hit, like not many people can pay that much for like that's rent plus care. And so now you're not living in your home anymore. You're paying rent in an apartment building assisted living facilities are apartment buildings with a cafeteria and with a front desk and a nurse on staff sometimes and care providers, 5,750 bucks per month.
Now most people like it, if you look at the nest egg course, the nest egg strategy is not transferring all of your wealth. Right? It's only transferring that amount that you're not. It's whatever amount you want to transfer into to the irrevocable trust is not that you want to protect. And the thing is if you still have wealth leftover, which I think you will, when you apply for Medicaid, you're not immediately, when you first go into an assisted living facility, you're not immediately eligible for Medicaid.
Now remember the good assisted living facilities are going to require you to private pay one to five years anyway. And when you roll over to Medicaid, like my goal for people is have that nest egg that you've protected.
You're going to be Medicaid eligible that much sooner. You're going to be able to roll over to mitigate that much sooner, and you'll just roll over and Medicaid will now pay for your care and the same care setting like you're in the same place people think, oh, I don't want my mom to be, I don't want to have a Medicaid bed.
There's no such thing as Medicaid beds just no, really look at the nursing home. They're just beds, it's just, who's paying for it for the care. Is it private? Pay it 10,000 a month or is it Medicaid at 2000 a month? That's it. Now there, this idea of Medicaid beds comes from there are some very few, very few assisted living facilities, not nursing homes, but assisted living facilities that accept Medicaid from day one, like the care community you want to be in requires private pay one to five years.
If it's a care community that takes Medicaid from day one, that's a Medicaid mill and they've somehow figured out how to run their business and make a profit. They cut so many corners that they can run their facility and make a profit with basically everybody on Medicaid. And manage that's where this idea of a Medicaid bed came in because those places are horrible.
Okay. So I want to tell my wife, don't send. That's why the irrevocable trust is so important because if you don't preserve some of the assets to have a pot of money available for the family to help you pay for care and you run it, you're going to private pay a lot longer. And if you private pay a lot longer, if your money does not last, as long as your life now, you're screwed.
Because you're still not eligible. You're finally eligible for Medicaid, but you spent everything down. The family has no money to help you. No money for upgrades, no money for copay and no money for anything. And they evict you from the care community that you were in and you ended up in a Medicaid mill.
Whereas if you make the transfer, then you've got all that many preserved. You can roll over at the same place without losing money. And you've met the private pay time period. If the private paid time period is 2000 bucks, let's say I misspoke. Let's say that the private pay time period for your care community is three years.
That's a good, nice community in Seattle. Got a private pay for three years right. Now, if you've transferred money in you're eligible after three years then you can roll over to Medicaid. Everything left in the trust is available to help you. But if you didn't make the transfer, you're not eligible for Medicaid until you've spent at all down to $2,000.
And yeah, what's accepted like a home or a car or they there's remember there's two sets of rules. There's I'm going to stop sharing this. There's two sets of rules. There's the set of rules for eligibility. And then there's a set of rules for recovery. And this is important distinction guys I'm going to pick on, I always got to make a snide comment, but when you listen to guys like Dave Ramsey, they seem to be completely unaware that there's recovery rules too.
And so the way it works is if you apply for Medicaid you can have no more than 2000. The Medicaid applicant can have no more than 2000 bucks, a personal residence up to a certain amount that varies by state. It does not count as an asset. So you can have the $2,000 in it in assets, but we're not going to count your house, your home.
And we're not going to count one vehicle use to transport you have unlimited value. We don't care. We're not going to count life insurance policies, a 1500 bucks is gonna help bury you when you die. Now, so if you're single and have a condo, you have to spend your wealth down to $2,000 and you, they won't count your condo.
However, once you're eligible and Medicaid starts paying for your care, they're going to keep track of every penny they spent. And when you die, they're going to recover. But they spent against your assets, which would be the personal residence. That's what a Medicaid lien is. Now, if you're married, it's strange because for Medicaid purposes the financial assets that the couple has, it doesn't matter if it's husband or wife. But for recovery purposes, Bob recovery purposes, it does matter.
And so only the assets of the Medicaid recipient can be liened and foreclosed, which means that we can transfer title to the personal residence, to the well spouse, and then Medicaid cover against that asset.
And that's why, I mentioned golden child. That's why golden child's important because if it's a single person we're looking at a Medicaid lien, right? There's no spouse we can transfer it to. That's it. Transfer free, transfer penalty free transaction, but if we have a golden child, then now we're cooking with gas because we can transfer to the child that they provided care for two years before mom went in and avoid that lien completely in your state and probably most states, if not all. Siblings, for some reason, if siblings live provide care for two years in their siblings' house I have to live for one year and you can make a transfer.
So Karen could live in her sister's house, provide care to her sister for one year. They could transfer the home to Karen penalty-free. I think Karen gets turned around and transfer it back. Now there's no reason to do that in Karen's case because her sister is married. They can make a transfer to the spouse.
And avoid that lien completely.
Isn't it fascinating? Like the rules have requirements that must be met. If they're not met, there is a certainty of the result. That's the thing that I struggle with candidly is, I'm a human being, so I may not seem like it, but it's frustrating to me when people, they have a lot of it's natural to art.
Like, have you ever driven down the road, listen to a Ford commercial? Inside your mind, you're going, yeah. You would say that this, just because, Chevrolet, it's you're trying to sell me a Ford and of course you're like, you just can't help it. I argue in your mind with the radio about the Ford commercial, it's human nature, that when you feel like you're being sold, you're going to put up objections.
And sometimes even after I've been retained, it gets hard enough. I had to listen to like here's one of my favorites. I'm going to it. This isn't gonna apply to me because I'll just I gotta I'll just end it. Like they say that like, I'll just kill myself. I'd rather do that than being in a nursing home.
And I'm like, okay. When I first heard it as a young attorney, I'm like Oh, okay. Well then I guess you don't want to will. And now I'm like, yeah, the cold 45 plan in my entire career, only one client has executed the Colt 45 plan one. And it was bad, but it was probably because of PTSD from Vietnam more than anything.
So the reason why the Colt 45 plan is not going to work just because Dementia happens a little bit every day. But by the time you realize your demented, you immediately forget and you're not going to commit suicide. And really what you're doing is you're just putting up a funny objection to contemplating your own mortality.
So what's your goal? Bob, how can we move you forward from like, you haven't even done your thing yet? You're not even to the Wills. Are you the sort of guy, can I be blunt? Are you the sort of guy that's got to understand it thoroughly, like engineers are hard to work with because they're so. I'm an engineer. Are you?
Yeah. Engineers have a hard time with the law. I've had, I can remember he was an engineer. We had so many meetings and he just wasn't getting it. And I realized that what he was struggling with is he was a linear thinker and he was thinking about systems and it was boom, boom, boom, boom.
The law is not linear. If you think about it okay. Here's an example. Some things are guaranteed in the statute like the RC revised code of Washington or the code of your state. It says right there, but other things do not exist in the statute. They exist in common law, case law. For example, the concepts of property interest comes from 1066.
And so as an attorney, I'm like, oh my God, we're reaching out and we're going to grab this body of law from over here. And you're like wait a minute. I thought we were, boom, boom, boom. We're sat in the code. It's not in the code. And some of it's just understanding how the financial markets work and some of it's, and some people have to understand it from beginning to end thoroughly before they feel comfortable moving forward with the plan.
And I need to know is what am I going to put into a trust that I want to get transferred into a trust? And what was the other thing? Oh, and who my trustee would be, because it's not really my children. It's going to do some third party. So I need to determine that before. Okay. Before I do the power of attorney.
Yeah, the nest egg course and the limited power of attorney. That's what it's about. It's like I'm 65. I'm not going to make the transfer. So when you go through the drafting app, the drafting app asks you like, okay, I understand you're not making the transfer now stipulate. Right. But yeah, I mean like vertical stuff.
How about this? Let's say I gave you 48 hours to come up with a plan. After 48 hours, I was going to conduct the Lobotomy on you. And you were going to be completely incapacitated for the rest of your life. And you were going to live 15 years or 20. Now that's an unpleasant proposition, but the engineer in you is going to go, okay, look, I'm overthinking this.
I got 48 hours to come up with something. Now 48 hours of course, immediately I'm gonna make the transfer right now. Right. Like 48 hours, I got to make the transfer now because it's five-year lookback period. And so I've just blown it for that five years. There's going to be high expenses for five years, but at least whatever's left over 15 years is available in a Medicaid eligible.
And at least I saved some and with the urgency of time, like if I reduced your timeframe. You would make a decision. What you're having a hard time with is okay. Look, it's just a little, I'm uncomfortable with the vagueness of a trigger event that may or may not ever occur. Like you could say, make the transfer when I forget my middle name or I'm actually diagnosed with Dementia or I fall and end up on the floor for a day.
I just watch an episode of Frasier. Remember that show and Frasier is based in Seattle, right? And the very first episode he's moved into his beautiful apartment in Seattle but his father had fallen in his house and had spent the entire day on the bathroom floor. And so season one episode one is Frazier bringing his father into his home and he's like, man, I thought it was going to have this really cool just got divorced. And here we are. And he had spent that was it. And that's example of a family member taking care of dad, but it's also a guy who didn't plan ahead and waited until the fall. It got shut down.
The storyline has got shot in the hip. He was, he just retired from the police force from Seattle. And he got shot in the hip. He went into, he wasn't even like he's retired. He goes into a convenience store. There's a robbery. And he ends up getting shot. Ideally you would make the transfer five years before you got shot, but at least make the transfer when you get shot and it shot in the hip because you don't, he didn't even wait.
And he waited until he was on the bathroom floor, even then you probably didn't do any Frasier crane had a radio show talking about mental health, but here his own father is.
Yeah. Thanks for listening to another episode of the BoomX show laws of money podcast, where asset protection attorney Darol Tuttle breaks down the complicated rules of a estate, retirement and even long-term care planning. You can listen to past episodes of the BoomX show by going to boomxshow.com or subscribing right from your smart phones podcast player.
To take a deeper dive, join as a free member in the BoomX Academy. And you'll be automatically enrolled in the show's companion courses, where you can find enhanced content and many of the shows important to episodes enroll now by visiting boomxacademy.com. That's boomxacademy.com.
