With advancing age, at least 70 percent of seniors will need some type of long-term nursing care. For those who have no money, Medicaid will provide financial assistance but for those who have saved enough and have a good pension, they will either have to pay for their own nursing care or purchase long-term care insurance, neither of which is cheap.
Consider that the average cost per month for nursing home care in the United States runs about $8,000 and, at that rate, your savings can be drained very quickly. All the hard work you put in to save the money can no longer go to your loved ones, but it will have to pay for your care. There is another option, however, and that is Medicaid, which is a federal agency that has several programs that cover long-term nursing care for seniors.
Medicaid, however, was created to help those who have virtually no assets, are poor, and have a low income if any. How can a senior with assets apply? The answer is getting good Medicaid legal advice early in life. If you are considering Medicaid estate planning to help allow you to be eligible for long-term nursing care, here are some legal facts that you should be aware of.
- The process of applying for Medicaid long-term assistance is complex and the rules are not entirely set in stone. The agency looks at many factors before deciding who is eligible for Medicaid assistance. Because Medicaid has a long application form and needs an exhaustive list of financial and personal documents, it is best to consult with an estate lawyer to get Medicaid legal advice.
- Even if a senior has sizable assets and income, he or she can still be eligible for Medicaid long-term care assistance; this is possible by restructuring assets so that one can meet the income and asset cap set by Medicaid. The restructuring, however, does take time and has to be done before the Medicaid 5-year look-back period. The earlier you can start planning for the potential you will need long-term care, the better off you are going to be.
- All seniors who apply for Medicaid long-term care assistance need to know about the 5-year look-back period. In order to qualify for Medicaid, some seniors may consider giving away their assets to family members or trying to spend down the money to meet the Medicaid cap; however, Medicaid will look back at all financial statements, bank accounts, savings, and other documents over a five-year period to ensure that the senior has not given away any money or real estate just to qualify for Medicaid benefits. If so, the senior could not only be disqualified from applying to Medicaid but could be charged with fraud.
- Medicaid does not include all assets of the senior when considering eligibility criteria. To meet Medicaid’s eligibility criteria, you will need to meet both the asset and income limits. Applicants for Medicaid long-term care assistance cannot have an asset limit of more than $2,000, and a gross monthly income of more than $2,300. If you are married, the asset limit is $3,000, and the income limit of $4,764 a month. The individual’s home, household contents, prepaid burial funds, one car, 401K plans, and life insurance, as long as the policy is not more than $2,500, are excluded from the eligibility criteria. There are many other exclusions that an estate lawyer can provide with Medicaid legal advice.
- If your income exceeds the Medicaid limit, an attorney can help set up a qualified income trust (Miller trust). Essentially, a Miller trust is a formal legal undertaking that can hold some of your income. This endeavor will permit you to place a specified amount of money in the Miller trust so that your income is less, and you become eligible for Medicaid.
- When the applicant is married and only one is applying for Medicaid assistance, the agency will look at the combined income and assets of both individuals, irrespective of what type of premarital agreement was made between the couple. However, the community spouse (aka, healthy spouse) will be able to retain and stay in the home and is permitted to keep 50 percent of all available assets.
- When you apply for Medicaid long-term care assistance, the first thing you will need is a letter from your healthcare provider that details what type of physical or mental disability you have, what type of long-term care you will need, and for approximately how long. This letter must come from a healthcare provider who has followed you for many years and knows your health status. A letter from any doctor or nurse will not count as being valid.
- When the senior who obtains Medicaid long-term nursing care dies, the state may collect the costs of care from the individual’s remaining assets.
- The cost of Medicaid planning is similar to one month’s nursing home care in the United States, but the benefits are enormous as your assets are preserved and your heirs may be able to rightfully get their share of your estate.
If you are considering applying for Medicaid long-term care assistance, the best Medicaid legal advice is to consult with an estate lawyer who is familiar with Medicaid. Because the application process is rigorous and demanding, an estate lawyer can provide you with legal advice, help you complete the application, as well as help with Medicaid planning.
The key is to start the process of Medicaid planning ahead of time so that during the look-back period, nothing extraordinary in your finances will show up. Even with the best estate lawyer, Medicaid frequently rejects the initial application, but there is an appeals process. In case your application is denied, an experienced attorney can help protect your rights and help file an appeal.
If you do not plan for Medicaid, then chances are that your children will never get their inheritance, or you may be obligated to ask others for financial help if you need to go to a nursing home. Call a Florida Medicaid Lawyer today at 561-588-7512 to speak with a knowledgeable Medicaid planning advisor or for Medicare legal advice.