Wyoming Medicaid Planning

Medicaid Planning Strategies

Medicaid helps millions of americans cover the cost of health insurance, but it can often fail to provide adequate assistance with long term care. To overcome this shortfall in Medicaid many americans have turned to medicaid trusts to help them weather the financial burden of long term care. Medicaid trusts can be difficult to understand at first, but fortunately Cloud Peak Law’s staff are medicaid trust experts.

The Reverse Half a Loaf Strategy

The reverse half a loaf strategy involves putting your assets into an irrevocable trust which friends or family. What this does is lower the assets held by the medicaid recipient allowing them to qualify for medicaid while still controlling their previous assets. Below is an example which outlines this strategy more completely.

Sarah’s Reverse Half-a-loaf Medicaid Plan

Sarah is 75 years old and anticipates requiring long term care within the next couple of years. Below is a small list that outlines Sarah’s financial situation.

Sarah’s Financial Situation

  • Sarah has $300,000 dollars in assets she will need to spend down
  • Sarah will need to move to a nursing home that costs $7,000 per month
  • Sarah’s income is $2,500 dollars per month including social security and retirement

Under this scenario Sarah has a burn rate of $4,500 dollars per month and would use all her assets within 66 months if she solely self funded her care. This would leave no assets for her family assuming she lives to 80 and this is where a Reverse half-a-loaf strategy can help. Fundamentally a reverse Half-a-Loaf strategy utilizes the Wyoming Medicaid penalty divisor to determine an amount she can gift to her family via an irrevocable trust which allows her to leave some of her assets to her family and still qualify for medicaid. Under our example the trust would amount to $119,275 and the math is shown below.

Example Of Wyoming Medicaid Asset Protection Trust

  • $4,500 (income shortfall) + $7,229 (Wyoming medicaid penalty divisor) = $11,729 (burn rate)
  • $300,000 (assets) / $11,729 (burn rate) = 25 month term
  • $7,229 (Wyoming medicaid penalty divisor) * 25 month term = $180,725 (Half-a-loaf gift amount)
  • $300,000 (assets/spend down amount) - 180,725 (Half-a-loaf gift amount) = $119,275 Medicaid Half-a-Loaf Annuity

Benefits of Medicaid Reverse Half-a-Loaf Planning

Using our example above Sarah was able to pass over half her assets to her beneficiaries while still receiving the long term care she needed. While the exact situation may vary using a medicaid trust allows you to maintain more control over your assets and still obtain the care you need. Fill out our contact form below to learn more and let us help you get started on setting up your Wyoming Medicaid asset protection trust today.

Contact Us

* indicates required