Applying for Medicaid-Asset Protection
Applying for Medicaid can be a terrifying experience. Our staff understands this. We know you come to our office full of questions and confusion. Our law firm is dedicated to helping you untangle the web of rules regulations and myths surrounding the medicaid process. In a thoughtful and thorough manner we will help you obtain all of the information you need to plan and protect your family's wealth, while enabling your loved one to qualify for benefits at the earliest possible opportunity.
The rules in this area are ever changing. You need an attorney who practices Medicaid Law on a daily basis. Our law firm has guided hundred of families though the process in helping them protect their assets and we would be honored to assist you, too.
Some of the areas we will focus on:
- Current Resources
- Current Income
- Prior Gifts and Transfers
- Special Circumstances and Opportunities (there are more of these than you can imagine if you know where to look)
- Need of a Spouse still living in the Community
- Ways to Maximize Income
- Tax Saving Strategies
WHAT IS MEDICAID:
Medicaid is a federally mandated, state legislated and locally administered program of providing medical coverage if you meet certain criteria. The key is to know how to legally qualify for these benefits. While pre-planning presents more options, it's never too late to protect your family's assets if you get the right advice.
WHO NEEDS MEDICAID:
According to the New England Journal of Medicine, if you live past the age of 65, there is a 43% chance that you will need long term care services. A recent survey by the Rochester Business Journal indicated that more than half the people who enter nursing homes are there for 1-5 years, with a substantial portion of these being residents in excess of 5 years.
COMMUNITY SPOUSE / INSTITUTIONALIZED SPOUSE:
With a married couple, the spouse in the nursing home is allowed to keep $13,800.00, a burial space, a prepaid irrevocable burial account, and $50.00 per month. The community spouse is allowed to keep the house, a car, and $74,820.00 in assets (this can be increased to $109,560.00, based on a formula). In addition, the community spouse is allowed to keep income of $2,739.00 per month. All other income and resources must be applied to the cost of the nursing home. Medicaid then will pay the difference.
Assets that have been transferred (given away) for less than fair market value are subject to a 60 month look-back period.
All transfers made by either spouse in the look-back period are added together. The total transferred is then divided by the cost of the average monthly nursing home cost in the region where the applicant resides. ($9,058.00 in Monroe and surrounding Counties) which results in the number of months the applicant is ineligible to receive medicaid benefits. This penalty does not begin until the individual is eligible for medicaid, but for the transfer. This is a significant change in the rules of medicaid eligibility created by the Deficit Reduction Act of 2005. This is the most misunderstood rule concerning medicaid.
ESTATE RECOVERY / ASSET RECOVERY / ASSET PROTECTION:
If Medicaid is paying part of the nursing home bill, the County Attorney has a right on behalf of the County to pursue contribution from the community spouse from excess resources or from excess income, and to recover all of the resources of the community spouse after his/her death, to the extent of its past expenditures. Many well-meaning planners are successful in obtaining Medicaid benefits for a client, but give little thought or concern to the asset recovery procedures that will follow.
Many techniques can be employed to assist an individual in qualifying for Medicaid and protecting their assets. Some of these include:
- A well crafted exempt asset spend-down and gift plan.
- Employing trusts and private or commercial annuities.
- The use of income only (irrevocable) Trusts.
- Asset allocation between spouses coupled with spousal refusal.
- Asset protection techniques to protect family assets from asset recovery.
- Timing of the Medicaid application.
- Special techniques to protect the family home.
- Preparation of life planning documents and estate planning documents, to avoid guardianship proceedings and probate (where asset recovery occurs).
THE ROLE OF INSURANCE:
Long term care insurance which will pay some or all of the cost of the nursing home is your best and primary defense to the possibility of a nursing home admission. If you can qualify and afford the premiums (and a competent financial planner will help you do both) the need for aggressive Medicaid planning can be greatly reduced or even eliminated. Your first strategy should be to contact your financial planning professional to pursue these options.
THE ROLE OF AN ATTORNEY:
An attorney well versed in the area of Elder Law can advise you on the laws that relate to your case and strategies to protect your family's financial security. There are many well-meaning professionals who offer information in this confusing area, sometimes incorrectly. Your best source of advise is an attorney highly experienced in this complex area of law.
Contact us for more information on asset protection and medicaid.