Much more than a Medicaid Trust! The average nursing home stay is two and a half years at $70,000 a year. This makes the average cost per stay $170,000.
Medicaid is the program that can potentially help pay part of your home care costs. It’s a federal and state medical program for individuals meeting asset and income tests.
The answer is often yes. The exact strategy employed, though, depends upon a number of factors including your marital status, your age and how long you intend on staying in a nursing home. These factors will determine whether Medicaid Trust planning is right for you.
The short answer is -- probably not. Eligibility requirements consider all of the non-exempt assets held by the husband or wife. The total is divided equally between the spouses. The spouse outside of the nursing home can retain half of otherwise non-excludable assets, up to a maximum (of around $100,000, an amount that changes annually), plus the residence, plus some personal property, plus burial reserve, plus automobile, and other miscellaneous items.
Those over 64 whose net income is less than approximately $2,200 a month are eligible. Those with more can qualify depending on their nursing costs. The spouse of an individual eligible for Medicaid is entitled to a maximum monthly income of about $2,980. (Note: The amounts on this webpage can change annually. You should verify the current figures before making decisions.)
The 60-month look-back rule states: eligibility for Medicaid can be denied if assets were transferred below fair market value within 5 years of his or her application for Medicaid. Further, you should be careful about giving away your assets too soon. It can be difficult, if not impossible, to retrieve assets given away and you cannot rely on others to always “do the right thing”. You should explore the various trust options available as part of the estate planning process to learn more.
IT’S NEVER TOO LATE. Depending upon circumstances, it may be possible to give away all assets and qualify for Medicaid immediately.
Assets are usually transferred outright or to a trust. A trust can be more desirable than a direct transfer because: Your child may go bankrupt, have a divorce, lose money in the market or be sued. A trust has stipulations dictating how its assets and income should be directed. A protection direct transfers lack. Your relationship with whomever you transferred the assets to may sour and you cannot undo the transfer. A trust cannot solve all problems, however. You cannot directly access assets in the trust. At best, only the income portion of the trust can be distributed to you. The trustee cannot have any discretion to distribute trust principal to you or the trust will be considered a resource for Medicaid purposes. I want to protect my house. This is one of the most commons things we hear from clients and they are relieved to hear that Medicaid applicants may retain their principal residence. It is a homestead which makes it an exempt property in the eyes of the law. The house can be sold after death with Medicaid being reimbursed unless a spouse survives.
Hiding assets is always wrong because it’s fraud. To call Medicaid Trusts hiding assets is to misunderstand the term. Elder Law attorneys specializing in this field help their clients become Medicaid eligible through legal means. Everything we do can be disclosed without legal repercussions. The cardinal rule is complete disclosure to Medicaid. It is not illegal or unethical to structure assets to qualify for Medicaid nursing home benefits. Attorneys advise their clients on the Medicaid law and what can done legally within it.
Two facts. The first, this has been provided for informational purposes only. The second, and this is us being honest, it would be foolish for anyone to engage down a legal journey using only online resources. There is much nuance and depth that are particular to each individual's situation which make it impossible to provide a perfect template for everybody. Medicaid is complex and varies from state to state and even within a particular state. Costly mistakes are almost guaranteed to be made if you do not know what you are doing.
In almost no circumstances would it be wise to embark down this path without the help of an attorney. Trying to figure this out for yourself can result in staggering costs and possibly even bankruptcy. In Medicaid Planning the old adage holds true: professional help is expensive, but mistakes cost more. There are important irrevocable trust tax consequences that you cannot be expected to know without sufficient training.
Regardless of who you choose please be certain to confer with an experienced attorney. We regularly here other attorneys hand out misinformation regarding Medicaid Planning and Medicaid Trusts. Should you believe we can be of assistance, then please reach out and schedule a consultation. We look forward to hearing from you.