Medicaid Planning

Protecting Assets from the Cost of Long Term Care

The average cost of a nursing home these days is $13,000 to $14,000 per month. It goes without saying that very few people can afford this. Our firm has written a book about the nursing home and Medicaid laws, called “Estate Planning for the Informed Consumer.” This book describes the Medicaid laws in detail, and you can download it at no charge from another area of this website.

There is a five-year waiting period for most techniques of Medicaid Planning to take effect. For those people who can wait for five years, the pre-eminent Medicaid Planning technique is the Irrevocable Medicaid Trust. With a Medicaid Trust, you receive all of the income, but only the income, from the trust. The trust can buy and sell assets, including real estate, stocks, bonds, CDs, and the like. In fact, this type of trust can own and sell any type of asset or investment other than a tax-deferred retirement account such as an IRA. Upon your death, the trust assets will pass to your heirs without probate, and the trust will terminate. During your lifetime, however, the trust is irrevocable and is subject to the five-year lookback.

Everyone uses the Medicaid Trust differently. Almost without exception, clients put their house and other real estate (such as a lake cottage or condo in Florida) into the Medicaid trust, and leave their liquid assets in the Revocable Trust. Some people put their real estate and a portion of their liquid assets in the Medicaid trust and the remainder in their revocable living trust. The point is that the Revocable Living Trust/Medicaid Trust combination can be tailored to each individual situation.


Crisis Medicaid Planning for Family Members Already in a Nursing Home

What happens if your spouse is about to go into a nursing home, or is already in one? In most cases, with the use of a property type of immediate annuity, it is not too late to shelter assets. An immediate annuity is a financial device that converts assets into income. The law states that the spouse at home can keep a certain amount of financial assets, plus the house. The funds above that level need to be spent down. The rules are very complex; in general, however, if the assets above the protected level are put into an immediate annuity, the nursing home spouse becomes Medicaid eligible and the healthy spouse can keep the annuity payments. In other words, all of the assets are protected. The law requires that the state be the beneficiary if the spouse dies within the term of the annuity. If the person outlives the annuity, then the state will not receive anything from the annuity proceeds, and they can be inherited by the children. Therefore, there is nothing to lose in doing the annuity. That is, if the annuity is not purchased, then all of the countable assets are subject to being spent down. With the annuity, the person can qualify for Medicaid, and some or all of the assets will be protected. It is important to note that the subject of annuities is enormously complicated, and this summary is only a very brief introduction to the subject. There are other techniques that can be used to protect assets, all of which are related to the particulars of the situation. The point to remember is that even if your loved one is already in the nursing home, do not lose hope. It is very often possible to protect a significant amount of assets. There are other techniques that can be used to protect assets, all of which are related to the particulars of the situation. The point to remember is that even if your loved one is already in the nursing home, do not lose hope. It is very often possible to protect a significant amount of assets.

Medicaid Applications

As we all know, In criminal law, you are innocent until proven guilty. A Medicaid application is just the opposite: you are considered ineligible for the benefits until you prove that you are eligible. And, proving you are eligible for benefits is very difficult. In general, a Medicaid application is a full and complete audit of all of your finances for the past five years. You are required to produce a complete set of your monthly or quarterly statements for this timeframe.

In New Hampshire, every transaction above $500 needs to be accounted for, and in Massachusetts, every transaction above $1,000 or so needs to be accounted for. If you have closed any accounts or sold any assets in the past five years, you need to prove what happened to the proceeds. If you have given any gifts in the past five years (other than small Christmas or birthday gifts), you can easily find yourself disqualified for benefits. Certain Medicaid caseworkers have been known to request vast amounts of information with impossibly short deadlines. To make matters worse, a 2013 law in New Hampshire can make your power of attorney holder personally liable for your nursing home costs if he or she is found negligent in the preparation of an application.

It is our belief that, except in the very simplest of cases, you should get professional legal help in preparing and filing a Medicaid Application. Our firm has done thousands of Medicaid applications over the past 30 or so years, and we can provide the help that you need.

Although a Medicaid appeal is not exactly a trial, it is quite similar, in that there can be the testimony of witnesses, exhibits, legal briefs, and legal arguments. The state Medicaid agency will have an attorney to represent it. The burden is on you to prove that the Medicaid agency made a mistake. Therefore, in most cases, unless you have competent legal representation, the odds will be greatly stacked against you. Our firm has many years’ worth of experience in handling Medicaid appeals and can provide representation in these cases.

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Estate Planning for the
Informed Consumer


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