Dont Forget About The Five
Knowing that an Irrevocable Income Only Trust can protect and preserve your wealth for future generations should be great news however, dont forget about the Medicaid five-year look-back rule as it is essentially the last piece of the Medicaid planning puzzle.
The five-year look-back rule prevents you from transferring assets at the last minute in anticipation of the need to qualify for Medicaid benefits. When you apply, Medicaid will review your finances for the five-year period, preceding your application, looking for asset transfers made for less than fair market value. If any are found, Medicaid will impose a penalty period during which time you will not be eligible for benefits. The length of the penalty period is determined by taking the fair market value of the transferred asset and dividing that figure by the average monthly cost of private pay LTC in your area. The penalty period only begins running when you are otherwise eligible. In other words, you must have the medical and financial need.
Because of the five-year look-back rule, creating an Irrevocable Income Only Trust at the last minute wont work. Instead, you need to include Medicaid planning tools and strategies in your estate plan long before the need to qualify for benefits actually arises.
Can Nursing Homes Take Your Annuity
Annuities are of less benefit for a single individual in a nursing home because he or she would have to pay the monthly income from the annuity to the nursing home. … Income from an annuity can be used to help pay for long-term care during the Medicaid penalty period that results from the transfer.
Contact An Elder Law Attorney To Protect Money From Medicaid
Protecting money from Medicaid is very complicated and you should seek the help of an Elder Law Attorney when implementing the strategies discussed in this article. Besides the need to understand your states laws, you need to understand concepts such as the spend-down rules and look-back period. Additionally, you need to know strategies fit your specific circumstances. In some instances, you may not even need to hide the money from Medicaid, or it may not be the right time to do so. Using the services of a professional Michigan Elder Law Attorney, will be invaluable when creating a strategy to pay for nursing home care and protect money from Medicaid.
Protect Your Home And Life Savings From Nursing Home Costs While Getting The Benefits You Need To Pay For Care
Read Also: Phone Number For California Medicaid
Payments Related To Noncountable Assets
A Medicaid applicant can make any needed payments to maintain or improve a noncountable asset. An example is to make home improvements or repairs to an exempt home. Plumbing repairs, home improvement projects, repairs to a roof, installation of a new roof, landscaping, and additions to a home are all allowable expenses for an exempt home. Likewise, repairs to an automobile are allowable expenses.
Does Medicaid Consider Life Insurance Asset
If a Medicaid applicant has term life insurance, it doesnt count as an asset and wont affect Medicaid eligibility because this form of life insurance does not have an accumulated cash value. On the other hand, whole life insurance accumulates a cash value that the owner can access, so it can be counted as an asset.
You May Like: How To Check Medicaid Status Sc
How Can I Hide My Savings
Strategies to Hide Money from Yourself
Can Medicaid Take Your 401k
In most cases, if you hold a 401K, that account will be taken into consideration when you apply for Medicaid. This is one of the complicated areas of Medicaid planning that you would be wise to handle with the help of an attorney. If you make the wrong move with regard to your 401K, you could be making an expensive mistake. We will talk below about the importance of getting help with your Medicaid planning process, and that is certainly a point that applies here.
It is worth noting that the status of your 401K can have an impact on how it is viewed by Medicaid. For instance, if you have your 401K in payout status, some states will see it as income rather than an asset. Depending on your circumstances, that could be an improvement that would help you fall on the right side of the income and asset limits. However, thatâs not how the rules are applied in every state, and how any change affects your personal qualification status is unique to your circumstances, so go over this carefully with an experienced professional before making any moves.
Also Check: Does Medicaid Cover Tooth Replacement
Make Sure You Have Proof
But beware. This is not a simple proposition. There is proof required, and timing is also an issue. Be careful also, who is doing the transferring. I had a circumstance where the father had been in a nursing home for years. Before going in, the father gave a power of attorney to his son. The son paid the nursing home out of his own money for a couple of months. But he couldnt afford it and stopped paying. The father had an old run-down cabin. After several years the son used the power of attorney to transfer the cabin to himself. After his father died, the nursing home sued him, saying he misused the power of attorney improperly, and that he should return the value of the cabin to the estate to pay the nursing home. Needless to say, this caused a great deal of stress. If they had come to me first, all of that could easily have been avoided. There are other problems with a transfer to a caretaker child as an asset protection plan.
But what if you have more than one child? Wont the other non-caretaker children be angry at the caretaker child for getting the whole house? What if the caretaker child doesnt share? These options are excellent if you have a disabled child or grandchild. But if you dont Option 3 may be better suited to a Mainecare Crisis Plan than a Mainecare Preplan. Again, these rules are complicated, so it is best you consult with a Medicaid asset protection attorney.
Can You Get In Trouble For Having Too Much Cash
While the act of having large amounts of money on you is not illegal in itself, typically those with that much on them are often engaging in criminal activities. Therefore, you may gain unwanted law enforcement attention, your cash could be seized, and you could be arrested if additional evidence is found.
Recommended Reading: What Glasses Place Takes Medicaid
How Can I Hide Money From Medicaid
- Effective Places to Hide Money In an envelope taped to the bottom of a kitchen shelf. In a watertight plastic bottle or jar in the tank on the back of your toilet. In an envelope at the bottom of your child’s toybox. In a plastic baggie in the freezer. Inside of an old sock in the bottom of your sock drawer. Where can I hide money at home?
Hiding Assets From Medicaid
Id like to talk to you about why that is the absolute worst idea and Im hoping that you wont do it.
Its a Crime!
Heres why. Colorado has something called the Colorado Medicaid False Claims Act, and under that law, if you attempt to not disclose something to Medicaid, or alternatively destroy records, you take some other covert action where youre trying to hide your assets from Medicaid in order to get services, thats a crime.
The Consequences for Hiding Assets from Medicaid
Like all crimes, this crime could be pretty serious, and you can end up in jail. You can also end up with a fine. You can end up having to pay the attorneys fees for the recovery of that money. A lot of bad things can happen.
Likewise, under federal law, the Federal Government has a law thats called the False Claims Act. Under that law, its also a crime to try to get Medicaid services by concealing it. So we dont wanna do that ever.
Under the federal law, you could also be liable for three times the amount of damages or money that you received from Medicaid.
So, again, never, ever a good idea to try to conceal things from Medicaid.
You May Like: Is Medical Marijuana Covered By Medicaid
What Is Texas Nursing Home Asset Protection
Nursing home Medicaid asset protection is the process of using proven and legal strategies to avoid paying more for nursing home care than your parent or spouse legally has to. If your nursing home bill right now is $5,000 but your parent’s income is only $750 your parent’s life savings is going to disappear real quick while the nursing home laughs all the way to the bank.
My asset protection is designed to protect as much as you or your parent legally can and reduce the nursing home bill to what they can afford . Sounds like a good idea? Keep reading.
How To Protect Money From Medicaid With Medicaid Compliant Annuities And Promissory Notes
It is common for an older adult to require emergency Medicaid benefits while still earning income or holding assets substantially over the required limits. In a lot of cases where an applicant needs Medicaid benefits in an emergency, it is also common that the applicant could have recently sold or transferred their assets. In both cases, transferring or spending the excess income for Medicaid purposes will trigger look-back period penalties which means the applicant is ineligible for Medicaid for a specific period. As a result, Medicaid compliant annuities are usually used in Medicaid Crisis planning situations to help the applicant pay for long-term care during the penalty period without completely draining all of their assets that they would like to leave behind for their family as an inheritance. Establishing a Medicaid compliant annuity or promissory note is not a straightforward strategy for protecting ones assets and an applicant should use an experienced Elder Law Attorney to implement it successfully.
Also Check: Home Health For Medicaid Patients
How To Protect Money From Medicaid With Medicaid Estate Planning
Many seniors who need long term care want to preserve their money and property so that they can pass it to their family as inheritance. While long-term care is very expensive, it is possible to preserve an inheritance for your family by doing proper Medicaid Estate Planning to pay for care and still protect money from Medicaid.
Medicaid is a means-tested program. This means that applicants need to have limited assets and low income to qualify. Unfortunately, families who dont know about Medicaid Estate Planning oftentimes either spend their own money and drain their savings until they are under the limits or attempt to hide money in ways that violates Medicaids rules which disqualifies them from Medicaid when they finally apply.
While improperly hiding money from Medicaid can disqualify a candidate from receiving long-term care benefits, an Elder Law Attorney can help you create a Medicaid Plan to help you qualify for Medicaid while allowing you to legally protect money from Medicaid.
To better understand how to protect money from Medicaid, lets first cover some Medicaid related terms that you should be familiar with.
Note: It Is Illegal To Help Someone Hide Assets
So my point is that theres lots of legal ways to do it, and the most important thing you can do is if you or a loved one are needing to go into a nursing home is to get qualified help because it is even illegal if you attempt to help someone to try to conceal their assets. So we dont wanna do that ever.
Recommended Reading: Does Medicaid Pay For Crowns
Funeral And Burial Expenses
Most states will allow for the pre-payment of certain funeral and burial expenses. This can be a complicated issue, however, since individual states have their own rules about what can be purchased and how much can be invested in these expenses. Check with your individual state Medicaid program or an estate planning or elder law attorneyfor detailed information.
How To Avoid Medicaid 5
Medicaid is one of the government safety nets that helps seniors pay for their care. Long-term care is a necessity for many seniors as they age and can be very expensive. Medicaid helps to pay for long-term care, but it requires that you exhaust your personal resources before payments begin. To prevent seniors from giving away money or resources to friends and family, Medicaid uses a 5-year lookback of their financial transactions. Attempting to hide money can lead to serious penalties. Heres how to avoid Medicaid 5-year lookback penalties.
Consider working with a financial advisor as you prepare for meeting your retirement expenses.
Also Check: How Do I Renew Medicaid Online
How Do You Hide Money From Nursing Homes
Asked by: Mr. Van Heathcote Jr.6 Steps To Protecting Your Assets From Nursing Home Care Costs
Hiding Money From Medicaid: Don’t Do It
- For example, she can make an outright gift to you and then wait five years to apply for Medicaid. Morally and ethically, choosing this path is up to you. Once this “five-year lookback period” has passed, the gift is ignored for Medicaid eligibility purposes, no matter how large the gift. However, there is some risk in the assumption that your …
Don’t Miss: Doctors In Monroe La That Take Medicaid
Several Types Of Special Income Trusts And Other Strategies Can Be Helpful When Trying To Protect Your Familys Assets From The Devastating Costs Of Long
Theres a common misperception that Medicaid is only for poor and low-income seniors. But actually, with a little proper and thoughtful estate planning, all but the very wealthiest people can often qualify for program benefits.
In 1965, Congress established the Medicare program to enhance insurance coverage and ensure greater financial solvency for seniors regardless of income, current health status or past medical history. At the same time, they outlined parameters for Medicaid a state-managed, means-based program to provide additional coverage to low-income and disabled individuals and families.
What makes the Medicaid program especially attractive, however, is its ability to cover long-term nursing home care costs and many home health care costs things not covered by Medicare. Imagine working, saving and investing over a lifetime, only to see your wealth quickly wiped out by the costs of long-term care assets that otherwise could provide a meaningful legacy to your family.
Book A Free Consultation With An Elder Law Attorney Todaydetermine Your Medicaid Eligibility Risk Freeget Help Qualifying For Medicaid Long Term Care Benefitscall Us Now 613
Because every Medicaid Planning situation is different, we offer a free initial consultation with an Elder Law Attorney to help you determine if Medicaid Planning is right for you.
The initial consultation gives you the opportunity to help you understand your current Medicaid eligibility. It also gives us a better understanding of how we can help you plan to protect your home and life savings from nursing home costs while getting you the benefits you need to pay for care.
To book your free consultation, call us now at 613-0007 and tell our friendly receptionist that you would like to book a consultation for Medicaid Planning. She will book you for the time that works best for your schedule.
We look forward to hearing from you!
Our 4 Step Process Makes Medicaid Planning Simple
Discuss Your Situation With An Attorney In Person Or On The Phone
We’ll Create A Medicaid Plan Based On Your Unique Situation
Work With Us To Complete Your Medicaid Plan
Schedule a free consultation with an experienced Elder Law Attorney today! Call us now at 613-0007
Phone and Web Meetings Available So You Don’t Need To Travel
Recommended Reading: Does My Daughter Qualify For Medicaid
I Thought Only Rich People Needed A Trust
Option 2 of the top ten ways to protect your money and house from Medicaid or a nursing home is using an asset protection trust. What is a Medicaid asset protection trust? It is an irrevocable trust. It works best as a Preplanning tool. Remember in Option #5 where I explained the difference between a Mainecare Crisis Plan and a Mainecare Preplan? A Mainecare Crisis plan is when you know someone is going into a nursing home, or they have been discharged from the hospital, and are going into a nursing home. Preplanning is when you dont know if one or both of you will need to spend time in a nursing home. But even after reading options 10 through 3 many clients are reluctant to put their money or their house in an irrevocable trust. Why? They dont want to lose control. They ask, if I put my property in an irrevocable trust, wont I lose control over it? The short answer is yes and no.
What Is The Best Way To Hide Money From Medicaid
5 Ways To Protect Your Money from Medicaid
Don’t Miss: Obgyn Katy Tx That Accepts Medicaid