MEDICAID PLANNING - Things to remember
IT’S NEVER TOO LATE Medicaid planning can begin anytime, even if your loved one is already living in a skilled care facility. But the sooner you plan, the more options you will have to protect what’s important to you.
YOU CAN KEEP YOUR HOME If you’re married, and you or your spouse needs to go into a nursing home, your home is exempt from Medicaid’s calculation of what your contribution to the cost of care should be. If you are unmarried or widowed, and you go into a nursing home, your house may be exempt if you follow certain procedures. Even though your house is safe while you reside in a nursing home, it will likely be lost to Medicaid after your death. Planning is key to preserving your home whether married, single or widowed.
DON’T GIVE AWAY THE STORE Since major changes to laws in 2006, “gifting” away your assets creates unforeseen circumstances and can make you ineligible for Medicaid benefits for 5 years or more! Far from protecting yourself, you will be undermining your own security.
MIND THOSE SAFE HARBORS
Congress has created a number of “safe harbor” provisions for protecting your assets. These provisions exempt certain assets and allow transfers to children or siblings, who meet certain eligibility requirements, as well as putting assets in certain kinds of trusts.
CAREFULLY CHOOSE WHEN YOU APPLY Applying too early can mean a longer wait for Medicaid qualification than necessary, while applying too late can mean having to pay for months of care you may not have had to pay.
Rule of thumb: Do not apply for Medicaid without a plan to ensure you qualify.
GET THE RIGHT HELP Medicaid planning is a complex matter. You need expert assistance to keep your assets safe. Be sure to find legal counsel who limits their practice to this area—someone with proven expertise in Medicaid law.
WARNING: Do not apply for Medicaid without a plan to ensure you qualify.
On February 8, 2006 President Bush signed the Deficit Reduction Act, which contained some major changes to Medicaid eligibility rules. The look back period was changed from 36 months to 60 months and more significantly the law states the penalty period does not start until the other assets have already been spent down. Illinois has finally adopted the Deficit Reduction Act effective 1/1/2012. There are still planning opportunities available even if your loved one is in a nursing home.
Many people have heard horror stories about the elderly losing all their assets when they go into a nursing home. Fortunately, a lot of what people have heard is false. For example, you do not always have to wait sixty months to become eligible for Medicaid. With a good Medicaid eligibility planning lawyer many assets you have spent a lifetime accumulating can be protected from Medicaid. Use the tools below to determine how much can be saved with Medicaid planning.
Many people believe that Medicare and Medicaid are the same. That is not true. Every American when they reach a certain age is eligible for Medicare. Only individuals whose assets fall blow a certain dollar amount qualify for Medicaid. There are many techniques that can be used to reduce a person’s asset level below Medicaid asset limit. Some of the methods people seeking Medicaid advice are routinely offered include:
- Setting up irrevocable trusts
- Making gifts to family members
- Paying for certain approved Medicaid expenses, such as pre-burial, items for your house, or specific types if annuity
- Transferring your home to your child properly without creating a penalty.
We can help you determine the best course to make you Medicaid eligible. Then, when it becomes necessary to apply for Medicaid, our office will complete the complicated Medicaid forms. Too often people under- estimate the importance of these forms. How Medicaid forms are filled out often can be the difference between being granted Medicaid benefits and not being eligible.
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