Americans are living longer than ever before, and many of us will eventually require long-term or nursing home care. How many? Well, nearly one in two women and one in four men find themselves in nursing homes at some point in their lives. Unfortunately, the costs of nursing home care are high and climbing ever higher, averaging about $6,000 per month nationwide. Worse, Medicare will not pay for it. The result? Two out of three families will run out of money within the first year during a prolonged nursing home stay.
Our firm can help you and your loved ones avoid this outcome, by enabling you to qualify for assistance from Medicaid—without “spending down” all your income, or giving up most, if not all, of your assets. We can show you a number of legal techniques and strategies that will allow your nursing home stay to be covered by Medicaid, while still keeping your home and many of your assets. Promissory notes, life estates, annuities, trusts... Advisors Alliance Group, PLLC can put these and other powerful tools to work on your behalf. And even if you or a loved one is already in a nursing home, we can use a number of legal provisions to help you get the Medicaid benefits you may be entitled to.The Biggest Mistake You Can Make With Regard To Medicaid:
The laws surrounding Medicaid are very complicated, strictly enforced and continuously changing. Many people think they can simply transfer assets to loved ones and then qualify for Medicaid without penalty. Nothing could be further from the truth. The Deficit Reduction Act of 2005 established a “look-back” period of five years for all asset transfers undertaken to meet certain income or asset limits to qualify for Medicaid. If it is determined an asset was transferred for less than fair market value during the five year look-back period, a penalty will be assessed, making the applicant ineligible for Medicaid for a number of months, even years. This means a nursing home stay will have to be paid for privately. The worst thing you can do is transfer assets to loved ones without fully understanding the possible consequences. Even the sale of the family home for full market value can create problems if it is converted to cash. And while it is true you can gift a certain amount of money each year without having to pay gift taxes, those gifts may be considered uncompensated transfers by Medicaid and could result in a penalty period during which Medicaid benefits would be unavailable. The bottom line? To avoid incurring severe financial penalties, you should consult us before you begin transferring assets or applying for Medicaid.
Other Mistakes Made With Medicaid:
Thinking it’s too late to plan.While it’s always better to plan early, it’s almost never too late to take planning steps, even if you or a loved one has already moved to a nursing home. Giving away assets too early.
After all, it’s your money (or your house, or both). Make sure you take care of yourself first. Don’t put your security at risk by putting it in the hands of your children. Ignoring important safe harbors created by Congress.
Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to disabled children, caretaker children, certain siblings and into trust for anyone who is disabled and under age 65; a transfer to a “payback” trust if under age 65; and a transfer to a pooled disability trust at any age. Failing to take advantage of protections for the spouse of a nursing home resident.
These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances, petitioning for an increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application. Applying for Medicaid too early.
This can result in a longer ineligibility period in some instances. Applying for Medicaid too late.
This can mean the loss of many months of eligibility. Confusion about the difference between lifetime liens on property and estate recovery.
There are a number of exceptions to lifetime liens on property, but for estate recovery there is only a deferral for a surviving spouse and a hardship waiver.
