Protecting one’s assets from unexpected seizure or excessive taxation is an essential component of sound estate planning. When it comes to preparing for the possibility of long-term care and receiving Medicaid benefits, asset protection takes on a new level of importance. If you are not yet old enough to receive Medicaid, now is the best time to begin advance planning. Mortellaro Law has the seasoned elder law attorneys you need to help with Medicaid asset protection.
Medicaid Eligibility and Your Assets
Medicaid is a jointly funded program of the states and the federal government that provides certain medical services and other services for different groups of people. In the case of those over 65, it can help pay for inpatient and outpatient hospital services, physician services, laboratory and x-ray services, home health services, long-term care, and more.
In order to qualify for Medicaid, a senior must meet stringent requirements that include:
- Medical necessity as determined by a healthcare professional
- Minimal assets with few exceptions
- Income that is below the federal poverty level and varies by state
In order for many seniors to qualify, they must take measures to legally distribute or protect their assets so they are not considered in Medicaid asset calculations. Moreover, Medicaid employs a “look-back period” of five years from the time of your application. Any protection measures must be dated before this five year period in order to qualify and escape any penalties.
Common Medicaid Asset Protection Strategies
Mortellaro Law elder law professionals can explain the particulars of common Medicaid asset protection strategies and how they can apply to your specific situation. A primary concern is if you are planning well in advance for possibly needing long-term care or you are in “crisis mode” and you or a spouse is about to enter long-term care. Different measures can apply for each situation.
Irrevocable Medicaid Trust | Asset Protection in Tampa
This is an irrevocable trust in which a designated trustee controls the assets placed within and their provisions. Your assets now belong to the trust and are not eligible for Medicaid asset calculations. You choose the terms, rules, assets, trustee, and how the assets are to be used when you set up the trust. Transferring assets into a trust should be accomplished before the 5-year look-back period, or at least five years before you apply for Medicaid, in order to escape any penalties.
This is a good tool for Medicaid asset protection when only one spouse is entering long-term care and the other spouse will remain at home. The spouse at home without Medicaid can retain a certain amount of the Medicaid-using spouse’s assets. The annuity can provide income for the home spouse each month, turning the Medicaid recipient’s assets into income and keeping them eligible for Medicaid benefits.
Long-Term Care Insurance
This Medicaid asset protection tool is popular, but can be expensive. Still, it can be much more affordable than spending all your assets on healthcare. There are ways to invest in long-term care insurance in advance and still be eligible for Medicaid. One of our elder law attorneys at Mortellaro Law can explain how this works and help you explore your options.
Medicaid asset protection is a perfectly legitimate and legal means to protect your assets and still enjoy government benefits for long-term medical care if the need arises. You shouldn’t spend everything you’ve worked hard all your life to gain to pay for medical expenses at or near the end of life.
Contact Mortellaro Law today to arrange a free consultation about your Medicaid eligibility and advance planning. We can also help you if you find yourself in crisi mode, with either you or your spouse entering long-term care. Call or message us online today for assistance.
Schedule a Free Consultation
What You Need to Know
Irrevocable Trust Planning
Caregiver Guilt – What You Need to Know
Difference Between Elder Law and Estate Planning