How To Protect Assets From Medicaid In Indiana

Date:

If You Dont Protect Your Assets Medicaid Could Take It All

Medicaid in Indiana

On Behalf of Slater Law Office LLC | Oct 5, 2021 | Medicaid Planning |

Indianas Medicaid program is only accessible to those with real financial needs. You typically have to show that you have both limited income and limited personal assets to get benefits.

Usually, your home will be one of the few assets that wont count against you when you apply for Medicaid, but that doesnt mean that your house or other property is safe after you start it.

When you die, the Medicaid estate recovery program could bring a claim against your estate for the cost of any care that you received during your lifetime as a Medicaid recipient.

Who Qualifies For Medicaid

A senior may qualify for full or limited Medicaid coverage depending on several factors, which may change over time. For the most up to date information about qualifying for Medicaid, you can visit www.medicaid.gov for more information. If you are not sure if you qualify for Medicaid, we encourage you to call our office and speak with our team to determine eligibility.

Will A Trust Protect My Assets From Medicaid

The simple answer here is yes a trust can protect your assets from Medicaid. But the devil, as they say, is in the details. If you do not use the right kind of trust, those assets might not be protected as you had anticipated, and they may be counted when trying to determine Medicaid eligibility. If you want to protect your assets with a trust, you need to be sure to do it the right way.

As the name would suggest, a Medicaid Asset Protection Trust is the right way to go here. There are a couple of key elements involved in a Medicaid Trust that you should be aware of while you are in the planning stages.

First and foremost, this is an irrevocable trust. In other words, that means the trust cannot be cancelled, and the assets that are placed in the trust are no longer the property of the individual who created the trust. This action cannot be undone, so it is essential that the process is carefully considered at every step before the trust is finalized.

It might be helpful to walk through a quick example to make sure you understand the basic concept at play here. To get started, there needs to be someone who is creating the trust. Lets say that you are going to create the trust to protect some of your assets from Medicaid as you attempt to qualify for benefits. That makes you the trustmaker, although there are other terms that may be used.

That was a lot of information on this important topic, but the basic points to remember are as follows

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Why Nevada Is One Of The Best States For Asset Protection

Nevada is ranked one of the top states in asset protection. A number of factors, such as its legislation that allows the formation of self-settled trusts, are used to arrive at this conclusion. Nevada also has a number of other asset protection measures in place, in addition to a strong banking system and low crime rate. Minnesota is a good place to protect your assets in the event of a lawsuit. To protect assets, consider making a strategic gift, in addition to Medicaid Compliant Annuity.

Can I Protect Assets By Transferring Them To My Kids

Planning To Protect Assets

No. If your children get into financial trouble, the assets become available to their creditors. If your children go through divorce, the assets may become available to their spouses through divorce settlements. If your children have health problems, the assets may be at risk, as well. In any case, by transferring your assets, you are losing control of them. For more information on asset protection options, contact Bruce Brightwell today.

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Medicaid Estate Planning Is Easy With Legal Help

An experienced Medicaid planning lawyer can help you through the process of Estate Planning with Medicaid in mind. You and your attorney will set up your estate in a manner that safeguards your assets for specific beneficiaries. This protects the estate and enables you to meet Medicaids eligibility limits.

Not all Estate Planning strategies are appropriate when also planning for Medicaid. That is why it is important to contact an attorney with experience in both Estate Planning and Medicaid planning.

Effective Medicaid Estate Planning involves implementing strategies to get your income and assets under the limits defined by Medicaid. This takes creativity and exceptional knowledge of Indianas Medicaid eligibility criteria.

It is important to speak to an experienced attorney well before the need for Medicaid long-term care. Do not delay. Some of the Estate Planning strategies only work if implemented years before you need access to Medicaid. Together with your attorney, you can make a plan that will protect your assets and help you safeguard an inheritance for your loved ones.

Can I Plan To Protect My Asset From Medicaid

The need for long-term care continues to grow as the population ages, and so has the cost. The cost for an individual requiring skilled care in a nursing home can easily exceed $90,000 per year. People who require long-term care have three options:

  • Pay privately of an average of $7,500 per month
  • Long-term care insurance or

Only a small percentage of our clients have long-term care insurance, and many want to plan ahead so that they have options and arent forced to spend down their assets in the event they need nursing home care.

When you apply for long-term care Medicaid benefits, Medicaid can look back five years from the date of application to see if you have given away assets. This is what is referred to as the five-year look-back period for Medicaid. If Medicaid determines that the Medicaid applicant improperly gave assets away during the five-year look-back period, then Medicaid can implement a penalty period and refuse to pay for care, which can be devastating if the applicant doesnt have the ability to get the assets back or sustain the penalty period. For example, if an applicant gave away $15,000 as a gift to a child a year before application, Medicaid could determine it is an improper transfer and refuse to pay for care for a couple months.

To learn more about protecting assets from Medicaid through a Medicaid Asset Protection Trust, call Alex Carr Law, LLC.

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If My Spouse Goes Into A Nursing Home Will I Have To Give Away Most Or All Of My Assets In Order To Protect Them From Being Taken To Cover The Cost Of Care

No. This is one of the Myths of Medicaid. Under federal Spousal Impoverishment Protection rules, you can receive Medicaid benefits and retain your home, your vehicle, your household effects and countable assets up to a state-determined maximum. This question goes to the heart of our estate planning mission. Brightwell Elder and Probate Law uses MPS Trademarked Medicaid Trusts to ensure that your assets will not be taken to cover the cost of nursing home care. Our trusts permit you to maintain full control and access to your asset income while ensuring that those assets are not counted towards your eligibility for Medicaid.

Financial Responsibility For Elderly Parents

How Medicaid Irrevocable Trusts Protect Assets

When caring for an elderly parent, financial responsibility is required. If you are unable to pay their bills, you may be held legally liable. If you havent set up a bank account for your parents, they may be unable to view your financial records. Its a good idea to be aware of the risks when it comes to joint bank accounts, but they can be a great way to share your responsibilities. Powers of attorney, a legal document that gives you permission to make financial decisions for another, can provide the same benefits without the costs. Make certain that you are financially responsible for your elderly parents and that they have the assistance that they require.

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Will I Qualify For Medicaid

The good news is that Medicaid will help cover long-term care expenses if you qualify for Medicaid however, because Medicaid is a needs-based program that is intended to help low-income individuals and families with healthcare expenses, the program uses both income and assets limits when determining eligibility. An applicant cannot own countable resources valued at more than the limit or the application will be turned down. As an individual applicant, your countable resources cannot exceed $2,000. For a married couple, the limit is $3,000. Fortunately, some assets are exempt from consideration when determining eligibility. In Indiana, common exempt assets include:

  • One home up to an equity limit of $585,000 IF you are planning to return to the home OR a spouse resides in it.
  • An irrevocable burial trust
  • Household furnishings, furniture, clothing, jewelry, and other personal effects

Medicaid Planning Nursing Home

As the population ages, we see more and more people who, because of debilitating illness or injury or deteriorating mental facility, must go into nursing home care. In fact, current statistics indicate that approximately 70% of Americans over the age of 65 will need long term care services in their lifetime, and 40% will require nursing home care. Such long term care may be the best choice for the safety and medical care for a loved one. However, with costs of long term care as high as $70,000 per year or more, a familys assets would soon be depleted. When that happens, Medicaid is frequently the source for funding ongoing care.

Because the Medicaid rules vary somewhat from state to state and are fairly strict and complicated, working with an elder law attorney will help people gain maximum value from their assets while still qualifying for Medicaid assistance. Our office also goes the extra mile in making sure that the protected assets are properly titled and have the appropriate beneficiary designations. If appropriate, we also update the estate planning of the at-home spouse to ensure that the protected assets do not pass to the Medicaid recipient spouse in the event that the at-home spouse passes away before the Medicaid recipient spouse .

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Can An Irrevocable Trust Protect Your Assets From Medicaid

Lisa Sullivan, MS, is a nutritionist and health and wellness educator with nearly 20 years of experience in the healthcare industry.

Long-term care in a nursing home can be expensive. In 2020, the average cost for a semi-private room was $7,756 per month, increasing to $8,821 per month for a private room. When you consider the average Social Security payout in June 2020 was about $1,500 per month, this leaves seniors to struggle to afford the care they need.

It’s no surprise that so many people turn to Medicaid for help. Medicaid pays for nursing home care more than any other type of insurance. Unfortunately, it does that by making you spend down your assets.

The Challenges Of Medicaid

What are the Biggest Risks to Protect Your Assets From?

Perhaps the biggest issue with Medicaid is the simple fact that demand is far greater than the supply. At least 70% of Americans who turn 65 in any given year will need long-term care services and support at some point in time.6 Extended lifespans and surging drug prices have made elder care increasingly expensive, which in turn has led to a great deal of fiscal tug-of-war between government officials and medical professionals.

While the state might be required to cover patients that cannot pay for medical care, there are several limits to their service, whether it be through more documentation, increased taxes, or offering a limited number of visits.7

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How Much Will It Cost To Protect My Family And My Assets

Bruce A. Brightwell offers his services per a specific fee schedule based on your particular needs. His services are designed to pay for themselves over a relatively short time. For example, a trust-based Medicaid plan is approximately the same as the average cost of one months stay in a skilled nursing facility. By helping you obtain Medicaid qualification and protect your personal assets, this plan can effectively cover that amount many times over.

What Assets Are Protected From Medicaid

There are a couple of topics to consider in this section. First, in terms of qualifying for Medicaid, some of your assets will not be counted toward that limit we discussed earlier.

For instance, things like personal belongings, IRAs, equity in a primary home, and a vehicle all fall in the exception category to not be counted against your asset limit.

What is counted for those asset considerations are things like cash, investments, checking accounts, non-primary residences, etc. If the total of those assets exceeds the limit, youll be on the wrong side of the qualifying picture.

With this in mind, many people look for ways to protect their assets from Medicaid, so they arent considered in the eligibility equation. One such option to protect assets is a Medicaid Trust.

One of the most important pieces of this puzzle is to make sure that your trust is established before the look-back period for your Medicaid qualification. The standard look-back period is five years, meaning you will want to have dealt with this issue at least five years before you plan to apply for benefits. If you establish your trust somewhere within that five-year window, it wont be considered exempt and the assets within the trust will be counted as part of your application.

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What Are The Benefits Of Hiring A Medicaid Planning Attorney

Our Medicaid planning attorneys have extensive knowledge and experience in completing accurate Medicaid applications. At Applegate & Dillman Elder Law, we will work with you to provide the paperwork needed to complete the application. We also have what it takes to ensure you create an effective plan to protect your assets.

How You Can Protect Your Estate

When Can Medicaid Recover from my Estate?

Many people are distressed to hear that their estates can be seized by the government upon their death. Luckily, there are actions they can take to help protect their assets and ensure that property and other assets are handed over to family members rather than left vulnerable to Medicaid estate recovery. Setting up this kind of protection requires careful and intentional planning that is different from the standard “living trust” with which many people are more familiar.

In order to protect assets from Medicaid estate recovery, one option for those who have the time to plan is to utilize a “Family Asset Protection Trust” or even, quite simply, a “Medicaid Five Year Trust.” In these instances, it is best to have transferred all property and assets that need protection into this trust at least five years prior to the anticipated need for Medicaid funds. This is because Medicaid has a “look back” period of five years. Moving these assets into a protected trust long before you anticipate the need for Medicaid can go a long way toward providing protection for your family as you age while also keeping them safe for your use during your lifetime.

If you need help setting up a protective trust as you look to long-term care plans and your own future, let us know. An experienced Medicaid Planning Attorney will be able to advise you on the best possible way to plan for your future.

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Medicaid Asset Protection Planning

There are a few different ways to protect your assets when it comes to Medicaid. One way is to put your assets in a trust. This way, your assets are not technically owned by you and therefore cannot be counted against you when it comes to Medicaid eligibility. Another way to protect your assets is to give them away. As long as you give them away at least five years before you apply for Medicaid, they will not be counted against you.

People are frequently confused by Medicaid and Medicare. Medicaid is a federal-aid program that provides long-term care to the poor and disabled. To be eligible, you must meet certain income and asset requirements, regardless of your age. If your income or assets exceed the qualifying limits, you may still be eligible under one of the many exceptions. The Smith Strong Law Firms Estate Planning System was chosen as one of the top estate planning systems by the Estate Planning Society. Please feel free to send any questions or ideas you have to us. Medicaid planning is very specific and not all planning techniques work in every case.

What Is Medicaid Estate Recovery

When answering the question âWhat is Medicaid Estate Recovery?â a little background is in order: One thing that many recipients of Medicaid benefits to help ease the financial burden of long-term care might not realize is that there is a Medicaid estate recovery plan in place. Under this plan, states are required to recover many of the costs covered by Medicaid at the end of an individual recipient’s life. These expenses include payments made to nursing facilities, home and community-based services, and many other medical expenses such as hospitalizations and prescription fees.

Through the Medicaid estate recovery plan, states are allowed to impose liens on property during the recipient’s lifetime and use money from the recipient’s trust to cover expenses paid during the individual’s life. States are not allowed to recover from an estate when there is a living spouse, a child under the age of 21, or a blind or disabled child of any age.

The realities of Medicaid estate recovery mean that an individual’s house and trust funds can be taken by the state rather than passed along to family members.

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