Medicare and Medicaid Differences and Planning for the Future

Medicare, Illinois Estate Planning LawyerOne of the most confusing decisions and choices that seniors need to make is about their health care insurance. People may have a hard time understanding the differences between Medicaid and Medicare and how those differences affect their future medical needs, including nursing home or rehabilitation facility placement.

Although both Medicaid and Medicare are federal health care programs, Medicaid is actually overseen by each individual state. Medicaid eligibility is geared more towards people who are low-income; however, Medicare qualification is for everyone, regardless of income.

To qualify for Medicare, a person must be 65 years or older, or a beneficiary of the Social Security Disability Insurance (SSDI) program for a minimum of two years. The program pays for physician visits, lab costs, outpatient care and supplies, prescription medicines, and hospital stays. The program will also pay for short-term nursing home stays (i.e. rehabilitative services) for stays up to 100 days. Hospice services are also covered by Medicare for those who have been given less than six months to live.

The price to enroll in Medicare is based on the plan in which a person enrolls, and all three plans have yearly deductibles. Typically, an enrolled senior is responsible for 20 to 35 percent of their health care costs and is again dependent on the plan in which they are enrolled

In Illinois, the Medicaid program is run by the Illinois Department of Healthcare and Family Services (DHS) and qualification is based on income. Medicaid programs pay basic health care services, such as doctor visits and all of the same coverage that Medicare covers; however, the program will additionally pay for a majority of long-term nursing home costs, assisted living, or at-home health care costs. Also, Medicaid will cover the price of prescription medications that a person’s Medicare coverage does not.

Medicaid enrollment costs are often free or of minimal charge and can cover an insured Medicare’s deductible, as well as the percentage of medical costs that Medicare does not pay.

One of the greatest expenses facing seniors is the cost of nursing home care and those costs can typically eat up the majority of a person’s life savings if the appropriate financial plans have not been put into place beforehand. To make sure that does not happen to you, please contact an experience DuPage County estate planning attorney to help protect your family’s financial future.

Understanding the Four Main Types of Life Insurance

equity index life insurance, life insurance, term life insurance, types of life insurance, universal life insurance, Wheaton estate planning attorney, whole life insurance, willsFor obvious reasons, purchasing life insurance is an emotionally charged decision. Still, it is an important move that could save loved ones from financial hardship. This is especially true if you are the main income earner within your family.

It is a smart idea to consult a legal professional to discuss any concerns you have related to life insurance, wills, and estate planning. An experienced estate lawyer can provide feedback and advice based on your particular circumstances.

One of the most common challenges that come with purchasing life insurance is knowing the difference between the various policy types. Below is a basic breakdown of the most common insurance plans.

Term Life Insurance

Term life insurance is generally the most affordable. These plans aim to provide a specific and reliable premium for a set amount of time. Options to increase the premium are usually available to clients who exceed the plan’s duration.

Whole Life Insurance

According to CNN Money, these plans guarantee a specific cash amount at the time of death, and they usually require a steady payment plan that rarely changes. Given the guarantee, this plan ends up being a more expensive choice but can offer greater financial security should the worst happen.

Equity Index Life Insurance

A form of whole life insurance, equity index policies tie potential earnings to a specific market index. For many, this is an attractive option since, depending on the stock market at the time of death, one can accrue greater payouts than other plans would offer.

Universal Life Insurance

Universal life insurance plans have the benefit of providing a tax-free cash value, but they come at a higher cost than other policies. Many people find universal life insurance attractive since there is the option to adjust the premium each month. It is also possible to borrow against these types of policies, though this can be a risky decision.

When choosing a life insurance policy, the advice of a Wheaton estate planning attorney may prove invaluable. For legal services in Wheaton, contact the Illinois law office of Stock, Carlson, Flynn & McGrath, LLC today at 630-665-2500.

Should I Use An Irrevocable Life Insurance Trust?

It’s very likely that during a conversation about estate planning that life insurance has come up as a topic. As a tool for planning for your family, life insurance can be a cornerstone of your financial plan, giving your family a sense of security in case something happens to you. When chosen properly and combined with an irrevocable life insurance trust drafted by your attorney, you can ensure that your family will remain safe and protected in the future.

LauraAn irrevocable life insurance trust is one way to protect the proceeds from any life insurance policies you own at death being included in your estate. If the policy owner was able to withdraw cash value and alter the beneficiary, then the IRS views this as “incidents of ownership” and state taxing authorities and the IRS can step in to tax proceeds at death.

This specific type of trust is designed entirely for life insurance policies. You can transfer the ownership of the life insurance policies to the Trustee of your ILIT, therefore giving up “incidents of ownership” and protecting the proceeds from your policies from being taxed.

The ILIT will be named as the primary beneficiary on your policies. When you pass away, the proceeds will be deposited into the trust help for your spouse, children, or other beneficiaries. This plan is especially powerful when it allows your family assistance with money to pay the tax bill while keeping your overall estate tax responsibility as low as possible. You can even make use of the generation-skipping transfer tax exemption by allocating the exemption against to discounted dollars (viewed as premium) when you stack these up against the value of the insurance proceeds.

If you are ready to get started with your irrevocable life insurance trust documents, contact an Illinois estate planning lawyer today.