A Brief Primer on Medicaid Financial Planning

Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government. Because of the low-income qualification, there is a need to plan for long-term care without losing all of your assets and still meeting Medicaid eligibility requirements (which can vary by state).

If a Medicaid applicant has excess assets, he or she must spend down those assets in order to qualify for Medicaid. However, Medicaid applicants who want to preserve some assets have a few options (Please contact Attorney Scott C. Painter for details and guidance):

Immediate annuities may be a useful tool to protect the spouse of a nursing home resident who applies for Medicaid. This allows the nursing home resident to spend down assets and still provide an income for the spouse.

An irrevocable trust, that cannot be changed, provides the payee an income for life. If the payee moves into a nursing home, the payments go to the nursing home. The trust must be set up a significant time before applying for Medicaid.

After a Medicaid recipient dies, the state must attempt to recoup from his or her estate whatever benefits it paid for the recipient’s care. Usually, the only asset available for “estate recovery” is a house. A life estate is a form of joint ownership of property between two or more people. When the person holding the estate dies, possession passes to the other joint owner(s). It is not recommended that you give your home to your children.

Prepaying your funeral may be a way to invest in assets that will not be countable by Medicaid or SSI.

Long-term care means a loss of personal autonomy and comes at a large financial price. It is wise to get expert counsel when planning your future, especially when Medicaid is involved.

The law office of elder law attorney Scott C. Painter, P.C., is located in Wyomissing (outside of Reading, PA, in Berks County,) and offers trusted legal services in the areas of elder law, including nursing home planning, trust and estate services, and veterans benefits. Scott C. Painter is a Certified Elder Law Attorney (CELA®), and he is also a member of the National Association of Elder Law Attorneys (NAELA).

If you have an issue or question, we encourage you to call us. With legal matters, time is of the essence. Call us for a consultation at 610-378-5140. The $300 consultation fee is waived if Attorney Painter is retained to perform services.

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