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Medicaid Planning

4 Common Medicaid Planning Mistakes

Most are aware that Medicare will cover a significant portion of their overall health-care costs as they grow older, but some are surprised that it is not free. It’s also not easy – managing the Medicaid application process is actually fairly complicated. 4 Common Medicaid Planning Mistakes: Procrastinating: Don’t wait too long to start planning ahead. Planning for Medicaid should be started long before benefits are actually needed to cover long term care costs. Individuals who wait too long often find that they have to exhaust a substantial portion of their assets in order to fulfill the program’s eligibility requirements...

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How Gifts Can Affect Medicaid Eligibility

Many seniors are dealing with rapidly rising medical and nursing home expenses and find themselves struggling to accept the situation when they discover that even a modest amount of personal assets may leave them ineligible for Medicaid benefits to help with the rising costs of elder care and living. Many find themselves facing the possibility of spending all their money on health care with nothing left to leave their heirs. In this situation it is tempting to immediately transfer assets to heirs, qualify for Medicaid and move into a long-term care facility. Rules are in place to govern this type of...

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Protecting Your Assets from Medicaid

There aren’t very many older adults who know and understand their rights and their available options in connection to long term care. This state of affairs can end up costing them and their family their financial stability as it can be disastrously expensive. Some don’t want to face the issue. Others go into their later years with faith that they will avoid the need for long term care entirely. According to the U.S. Department of Health and Human Services, Americans turning 65 in today’s society have approximately 70% likelihood that they will need long-term care services or support during their lifetime....

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Low Cost Medicaid Applications

Recently a potential client became a client due to a Medicaid Application non lawyer company. These companies are not attorneys, and can not provide legal advice; even if they could, they generally do not know the law well enough to actually assist their clients. A had spoken with a potential client few months ago in regards to a Medicaid Application for his father. The father had very few assets, but among them was a homestead. The client did not like my pricing, which I heavily research to make sure I charge market rates. Instead, the client found  a non lawyer service to...

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Spousal Refusal in Medicaid Planning

Spousal Refusal is a Medicaid Planning tool that Elder Law Attorneys use for their married clients. Essentially, the Medicaid spouse transfers all of the his/her assets to the "well" spouse who then signs a paper to the state that says the well spouse refuses to pay for the medicaid spouse's healthcare. Medicaid allows this because of an IRS rule that allows for transfers between spouses. It is a very effective technique. Unfortunately, some Elder Law attorneys do not fully understand the process and do not properly complete the paperwork. A recent case in Missouri had a couple transfer their assets into two different...

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Countable Asset in Medicaid

What exactly is exempt from Medicaid as a countable asset? The answer is really quite simple: anything that is a non-countable asset is then a countable asset. I am not trying to be funny or clever, but it is easier is to define all assets as countable, except for the non-countable. So what does Medicaid consider as non-countable. Well, essentially it is critical assets of your life that you need in order to survive, such as your home, car, and retirement monies. Pre Paid Burial contracts are also non-countable (because Medicaid does not wish you to become a burden to...

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Rental Property and Medicaid

Rental Property is a common issue with Medicaid Planning. Some applicants may have a rental property. Medicaid does not treat the property itself as an asset, only the income from the net rental amounts. This means the gross rent, minus the HOA, mortgage and any other costs is then counted as income for the applicant. The purchase of a rental property is also a Medicaid Strategy in that a countable asset as money, is transferred into a non countable asset as a rental home. The hard part is the Recovery associated with the rental property. An extra step needs to be taken...

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Personal Injury and Medicaid/SSI

Personal Injury settlements could be a little difficult. The difficulty is that while the IRS does not recognize the settlement for tax purposes as income, Medicaid does recognize it as an asset. The most convenient planning technique is to create a Special Needs Trust for the Personal Injury Settlement. I handle about three to four SNT’s per month for clients receiving a personal injury settlement that are on SSI or Medicaid. A Special Needs Trust is a unique irrevocable trust whereby the money is not counted as an asset for the individual, but the money could ONLY be used for the...

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Joint Accounts

Joint bank accounts are usually done as a means of DIY Estate Planning. The adult child places themselves on the parents account as a technique to avoid Probate. Unfortunately, from a Medicaid standpoint this invalidates the gifting prohibition because the Medicaid applicant “gifted” half of the account to the adult child. This would need to be undone, meaning the adult child removed from the account, and then a true Medicaid strategy employed for the cash in the account. ...

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