18 JANUARY 6 - JANUARY 12, 2017 BROOKLYN MEDIA GROUP What everyone needs to know about prostate cancer Prostate cancer is the second most Photo: tumblr.com BY RONALD A. FATOULLAH, ESQ. & JEFFREY P. GORAK, ESQ. Don’t Let Life Insurance Affect Your Medicaid Eligibility A life insurance policy is a contract between an individual (the insured) and an insurance company (the insurer) where the insured pays a premium in exchange for the insurer’s promise to pay a certain sum of money (the death benefit) to the designated beneficiaries on the death of the insured. The two most common types of life insurance policies are 1) term life insurance and 2) whole life insurance. Under both policies, an insured pays a premium (can be annual or monthly) during a term of years (for example, 20 years) and if the insured dies during the term, the insurer pays the death benefit to the insured’s designated beneficiaries. But a whole life insurance policy also has a cash surrender value, meaning that the insured can surrender the policy at any time and receive the cash value of the account, which is largely determined by the amount of premium payments made by the insured. Both types of policies are great estate planning tools. They both pay the death benefit directly to the designated beneficiaries, thereby avoiding probate. Further, such proceeds are not recoverable from the estate by Medicaid because Medicaid can only recover against assets distributed through the probate process. Despite these benefits, whole life insurance in particular can be problematic when it comes to applying for Medicaid. In New York, an applicant may have up to $14,850 (or $21,750 for a couple) in resources in order to qualify for Medicaid. A life insurance policy with no cash surrender value (such as a term policy) poses no problem, as it is not counted as a resource for Medicaid purposes. But a life insurance policy with a cash surrender value will be counted as a resource if the death benefit exceeds $1,500. Its value will be the cash surrender value. Medicaid views these policies as resources because they can be surrendered for cash. An applicant who owns a life insurance policy with a cash surrender value must therefore plan wisely to maintain the policy and still qualify for Medicaid. The planning options available to a Medicaid applicant with a whole life insurance policy largely depend on the cash value of the policy. If the cash value (not the death benefit) is less than $1,500, a Medicaid applicant may purchase a separate burial fund in an amount equal to or less than the $1,500, thereby removing this amount as a countable resource. Planning, however, becomes more problematic when the cash value, in combination with the applicant’s other (non-exempt) resources, exceeds the applicant’s resource allowance ($14,850). When this happens, some applicants surrender the policy and spend down the cash. This is ill-advised in many circumstances because surrendering the policy results in the loss of the death benefit. If an applicant is contemplating Medicaid home care, the applicant may transfer (or gift) the ownership of the policy to a family member, because there are no transfer penalties for home care. If, however, an applicant is contemplating Medicaid nursing home care and he or she cannot transfer the policy to a spouse or disabled child, which are exempt transfers for nursing home care, a better alternative may be to have the applicant’s children purchase the policy from the applicant for the cash surrender value. The cash received can then be spent down or used to purchase an irrevocable funeral agreement, which is not considered a transfer. If the cash value (when combined with the applicant’s other non-exempt resources) is significant, further Medicaid planning will be needed. This may include, for example, a gift/loan strategy where part of the cash value is used for the applicant’s care. The benefit of these latter techniques is that the death benefit of the policy remains in effect, which is often the very reason for purchasing the policy. A life insurance policy is a great estate planning tool. It offers both the advantage of avoiding probate and the protections against a Medicaid recovery. But it can be problematic when planning for Medicaid. It is important to review the various planning techniques with an experienced elder law attorney when planning for Medicaid. Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Jeffrey P. Gorak, Esq. is an elder law attorney with the firm. The law firm can be reached at 718-261-1700, 516-466- 4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also a partner with Advice Period, a wealth management firm, and he can be reached at 424-256-7273. THE ELDER LAW MINUTE TM common cancer among men, with approximately one in seven men diagnosed in his lifetime. It is also the second leading cause of cancer death among men in the United States, with over 180,000 men estimated to be diagnosed with prostate cancer in 2016. With this in mind, Dr. David Silver, chief of urology at Maimonides Medical Center, offers guidance to men concerned with this serious disease. Some prostate cancers can spread quickly, but most grow slowly. In fact, more than 2.9 million men in the United States who have been diagnosed with prostate cancer at some point are still alive today. Fifty percent of men age 70 and older have prostate cancer; the vast majority of men with prostate cancer die with it, rather than from it. "It’s increasingly evident that prostate cancer has been over-treated in the past, and therefore, medical societies are not currently recommending routine screenings," explained Silver. "You should be aware of your personal risk for prostate cancer and discuss with your doctor if you need to be concerned." Silver advises that men at greater risk for developing prostate cancer or men who experience potential symptoms should consult a physician to determine if screening is the best course of action. There are several major risk factors for prostate cancer, including age, family history and race. Symptoms of prostate cancer may include problems passing urine, blood in urine, impotence, pain in the hips, back, chest or other areas, or weakness/numbness in the legs or feet. “Many factors impact the decision to treat prostate cancer,” says Silver. “If the cancer is caught early, before spreading to other parts of the body, there is a better chance of fully recovering.” Some patients opt for active surveillance, which means waiting to see if the cancer progresses before undergoing treatment. Urologists at Maimonides provide the most advanced treatments aimed at facilitating a speedy recovery. “In cancer care today, we’re trying to minimize the side effects of treatment on every patient’s lifestyle and family,” notes Silver. “Treatment plans, devised by urologists, radiation oncologists and medical oncologists, are revised as often as necessary to accommodate the individual’s unique responses to treatment. This multidisciplinary approach has significant benefits for all prostate cancer patients.” For more information, visit www.maimonidesmed.org/ clinical-services/urology. Photo courtesy of Maimonides Medical Center Dr. David Silver.
BSR01052017
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