by Bill Miller | Jun 19, 2018 | Estate Planning, Medicaid, Medicaid Planning
Many people have never heard of Medicaid Estate Recovery. Medicaid recipients may not realize that benefits received for long-term care may have to be repaid. After certain recipients pass away, Medicaid may attempt to recovery some or all of the funds paid for their care. You may need Medicaid benefits in the future, so it’s important to know how to go about protecting your estate from Medicaid recovery.
What is Medicaid Estate Recovery?
Medicaid is a federally funded, state administered program that pays health-care benefits to qualified individuals.
Due to federal law, individual state Medicaid programs must attempt to recover some of the money paid to certain recipients age 55 or older. As with most government programs, there are restrictions to Medicaid Estate Recovery.
And there are ways to protect against it.
Protection from Medicaid Estate Recovery.
Advance planning is key. It may be too late if Medicaid files a claim against an estate.
Alabama’s Partnership for Long-Term Care program allows people to buy long-term care insurance. Restrictions apply, and you may need to qualify to purchase this insurance.
Some use trusts as a part of their estate planning with an eye toward asset protection. Currently, only an irrevocable trust provides protection from Medicaid Estate Recovery. Even then, an irrevocable trust is still subject to Medicaid’s 60-month look back period.
Simply giving your assets to your family may create more problems than it solves. Your estate may be protected from Medicaid Recovery, but there’s no guarantee your family will do the right thing.
Your best course of action is to talk to an attorney who has extensive Medicaid experience.
A Final Note.
Some states have what are called filial responsibility laws. In these states, children can be held accountable for their parents’ nursing home bills. Fortunately, Alabama does not have this type of law.
Learn More About Protecting Your Estate.
The attorneys at Miller Estate and Elder Law can help you with Medicaid eligibility, applications, and asset protection. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and we assist clients in the Leeds, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | Jun 15, 2018 | Medicaid, Medicaid Planning
Max was going about his daily life when suddenly he got a call he’d been dreading. His Great Aunt Maude was critically ill, and Max soon learned that she would need 24/7 nursing care. She doesn’t have any insurance or savings accounts, and public benefits will have to pay – if she’s eligible. In addition to comforting his great aunt, Max had to scramble to apply for emergency Medicaid.
Alabama Nursing Home Medicaid Eligibility
This government-funded benefit offers assistance if applicants meet the following conditions:
- Applicant must prove nursing home care is due to a medical condition.
- Most applicants must live in a nursing home for at least 30 continuous days.
- The applicant’s monthly income must be below limit, which is set in January each year. The current limit is $2,205 per month.
- The value of applicant’s resources must be below a limit set by Medicaid. The limit for an individual is $2,000, but there are special exceptions if the applicant’s spouse will continue to live in their home.
- The applicant must be a S. citizen living in Alabama.
While this may sound simple, regulations also contain exceptions and special situations. It’s best to consult with an attorney who understands the Medicaid application process.
The Application Process
Completing an application, either online or in paper format, is just the first step.
Applicants are required to include a lot of information and documentation. A Medicaid caseworker will review the application. By law, they must review income and expense documents starting 5 years before the date of the application.
The application, along with all supporting documentation, is then submitted to Medicaid for review. It’s important to send the application to the right office, which can be found by calling Medicaid or searching online. Mailing the application to the office that handles Medicaid for Pregnant Women or Children, for example, could delay approval of the application.
Medicaid mails a decision letter to applicants at the address shown on the application. Sometimes applicants will be asked for more information or for clarification before Medicaid can approve or deny the application.
Don’t let Medicaid eligibility issues creep up on you.
Finding out that you need emergency Medicaid during a medical crisis is tougher than you can imagine. Know where you stand now, and how to plan for Medicaid eligibility before illness strikes.
Talk to an Alabama attorney with experience and training to handle your concerns. Contact Miller Estate and Elder Law at 256-251-2137 to schedule an appointment. Though our offices are located in Anniston and Birmingham, we assist clients in surrounding communities like Talladega, Gadsden and Vestavia Hills.
by Bill Miller | Jun 12, 2018 | Medicaid, Medicaid Planning
You may be wondering, “What are the chances I will ever need Medicaid.” Well, about 72 million people received Medicaid benefits in 2017, including younger disabled people, pregnant women, children, and older adults. About 52 percent of people currently age 65 will need long-term care in the future. Many of these people will need help paying for that care. Even people who are currently in good health should start thinking about their five year plan for Medicaid eligibility.
Who is eligible for Medicaid benefits?
Caseworkers review several factors to determine an individual’s eligibility for Medicaid. Each Medicaid program has different requirements. We’ll just be considering two programs: Medicaid for Elderly & Disabled and Medicaid in the Nursing Home.
To receive Alabama Medicaid benefits, applicants have to meet medical, income, and citizenship requirements. An individual might meet those requirements if they:
- Are medically proven to need nursing home care;
- Have lived in the facility for more than 30 continuous days;
- Have a monthly income less than the limit, which is currently $2,205;
- Own resources valued below the current limit; and
- Are citizens of the U.S. and Alabama.
What might block Medicaid eligibility?
Sometimes eligibility is denied for preventable reasons.
For example, Medicaid reviews income and expenses for the 60 months prior to the application date. Large transfers of property or income during that 5-year time frame – the “look back” period – could make the applicant ineligible for months or years – the penalty period. The length of the penalty period varies depending on the amount of money given away.
Proper estate planning before the Medicaid benefits are needed could transfer an individual’s assets in a way that is acceptable to Medicaid. Creating and funding an irrevocable trust may protect the assets for your heirs without affecting your Medicaid eligibility.
It’s great to start Medicaid planning five years out … but we have no way of knowing when or even if we will be incapacitated.
Start your Medicaid planning today.
Even if you haven’t started planning five years in advance, you can still benefit from the advice you’ll receive from the attorneys at Adams Miller.
Don’t let Medicaid eligibility issues give you an unpleasant surprise. Know where you stand now, and how to plan for the future. Talk to an Alabama attorney with experience and training to handle your concerns. ContactMiller Estate and Elder Law, at 256-251-2137 to schedule an appointment. We help clients in Anniston, Talladega, Birmingham, Gadsden and surrounding communities.
by Bill Miller | Jun 6, 2018 | Elder Law, Medicaid, Medicaid Planning
Applying for Medicaid is tricky, and timing is important. In fact, Medicaid planning is best started years before you actually need to apply for benefits. How your property is owned, and when it was titled, makes a big difference. One way to plan ahead for Medicaid is by using a life estate deed.
What is a Life Estate Deed?
A deed is a legal document used to transfer property interests. Just as there are different types of real estate transfers, there are different types of deeds: general warranty deeds, statutory warranty deeds, quitclaim deeds, and life estate deeds.
A life estate deed is often used in estate planning. It’s also useful for Medicaid planning. Some of the benefits offered when using a life estate deed include:
- As life tenant, the property owner continues living at the property until death or incapacity.
- At the death of the life tenant, the property immediately passes to the other owners, known as remaindermen or remainder beneficiaries.
- Property passed by life estate deed is not included in probate estate. (However, it is still included in taxable estate.)
Medicaid Eligibility and Your Life Estate Deed
The Medicaid application process involves determining eligibility based, in part, on available income and resources. If an applicant owns property outright, it typically will be considered a resource. In some cases, people are denied Medicaid eligibility because their income or resources exceed the limits.
However, Alabama Medicaid guidelines do not consider property held under a life estate deed to be a resource – unless the property was transferred within the five year review period going back from the date of the application.
How might this play out? Well, if Maggie applies for Medicaid. She does not own her home outright, but has signed a life estate deed naming her children as the remainder beneficiaries. Her other resources put her well below the resource limit. Medicaid ignores the property that’s held under the life estate deed and approves her application. Several years later, Maggie passes away and the remainder beneficiaries take possession of the property. There are tax consequences of using a life estate deed that need to be considered before proceeding.
Learn More About Life Estate Deeds and Medicaid.
Even if you haven’t started Medicaid planning before you need to apply, you can still benefit from the advice you’ll receive from the attorneys at Adams & Miller, P.C.
Don’t let Medicaid eligibility issues give you an unpleasant surprise. Know where you stand now, and how to plan for the future. Talk to an Alabama attorney with experience and training to handle your concerns. Contact Miller Estate and Elder Law at 256-251-2137 to schedule an appointment. We help clients in Anniston, Talladega, Birmingham, Gadsden and surrounding communities.
by Bill Miller | Jun 1, 2018 | Medicaid Planning, Medicaid Qualification
The Willingham Family needs to apply for Medicaid to pay for their grandmother Joanne’s nursing home care.Before doing so, it is important to look at all of her financial transactions during the Medicaid look back period. In the past four years, she has given them monetary gifts, sold her car to her granddaughter for less than market value, and transferred the family home to her oldest son, Byron. Now, however, Joanne needs 24/7 residential nursing home care. She has no option but to apply for Medicaid. She and her family have no idea how Medicaid will view the financial transactions she made during the Medicaid look back period.
A Little About the Medicaid Look Back Period
Medicaid is funded by the federal government but administered by each state. Alabama Medicaid, then, distributes benefit money to Alabama residents. Medicaid programs provide benefits through a variety of programs. We primarily will be looking at Medicaid for elderly or disabled people and residents of nursing homes.
To receive benefits, people must complete applications. They must also meet financial and resource limits. In addition, applicants must provide substantial documentation, including financial records, for the 60 month period before the application date – the Look Back Period.
Medicaid caseworkers thoroughly review an applicant’s financial history during the application process. They are particularly interested in gifts and transfers for less than market value that occurred during the Medicaid Look Back Period which is the 60 months prior to filing the application. What they discover during their review could trigger a penalty period where the applicant cannot receive benefits.
Why Does Medicaid Care About Transfers Made Before You Applied?
Assets transferred during the Look Back Period could have been used to pay for the applicant’s care.
Not All Transactions Were Created Equal.
Some financial transactions are deemed okay by the Medicaid system. Some are not.
These deals may cause problems for the applicant:
Gifts. Taxpayers are allowed to gift money within certain guidelines without facing tax penalties. However, Medicaid typically does not consider gifts exempt.
Irrevocable Trusts. In some cases, assets transferred to irrevocable trusts during the look back period trigger a penalty.
No Documents. Some transactions will be considered in violation of the Look Back Period because of inadequate documentation. The applicant may have to prove that the sale price of a house, for example, falls in line with the market value of the house.
These deals may be allowed:
- Spouses. Transfer to a spouse in most circumstances.
- Disabled Children. Transfers to a blind or disabled child under the age of 21 are usually allowed.
- Deals with Siblings. If an applicant co-owns a home with a sibling if the sibling lived with the applicant for at least one year before applicant applies.
- Adult Children Caregivers. Applicants can give their home to an adult child who is their primary caregiver.
- Payments to creditors are usually allowed. In fact, one way to turn liquid assets into exempt assets is to pay off your mortgage or home equity loan.
Advance Medicaid Planning Can Help.
Planning for Medicaid eligibility can be tricky. Speak with an Alabama attorney and make Medicaid planning part of your estate plan. To learn more, click the link to get a copy of our Alabama Guide to Medicaid Qualification. Doing so could save you thousands of dollars.
For a free consultation with an experienced Alabama attorney, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | Apr 7, 2018 | Medicaid Planning
Michael’s mother, Lucille, fell at home and wasn’t found for several days. He consulted with doctors about his mother’s care and was told she needed 24/7 nursing care. As he started researching nursing homes, Michael learned that the typical cost of a nursing home in Alabama is $6,000 or more per month. Worried that Lucille didn’t have the money to pay for a nursing home, and knowing that he didn’t have the means either, he started looking for other options to pay for her care. Michael decided it was time to start Medicaid planning immediately. What he learned puzzled and concerned him. Michael wished he had asked himself the question, “Should I wait until I need nursing care?” a lot sooner.
Medicaid Eligibility
Medicaid is a federally-funded program to help people with certain medical costs. The program is actually administered by state agencies like Alabama Medicaid.
But not just anyone can get Medicaid.
People have to apply and submit lots of supporting documentation. A caseworker reviews the application and documents, then determines whether the applicant is truly eligible for Medicaid benefits. Many people are not.
Medicaid looks at income and resources for more than a few months or even a year. In fact, Medicaid employs a long “look-back period.”
What is the “Look-Back Period.”
This is a five-year period prior to the application date. All financial transactions made during the look-back period are reviewed, no matter how big or small. Certain situations may cause problems for applicants, including:
- Asset transfers for less than fair market value. Example: Lucille transfers ownership of her house to Michael or sells it to him for less than it’s worth.
- Gifts, including charitable gifts. Example: Lucille suddenly gives her grandchildren up to $15,000 each. She also gives her church, the local SPCA, and the town historical society large donations.
- Random Payments to Caregivers. Example: Lucille paid someone to help her without having a written agreement about the services provided.
- Loans to Family Members. Example: Michael and Lucille decide to “lend” several family members large amounts of money without having formal loan agreements.
Some transfers typically will not cause any problems with a Medicaid application if made to:
- The applicant’s spouse. Example: Lucille is widowed. If she were married, however, she might be able to transfer some of her assets to her spouse or her spouse’s caregivers.
- A child with special needs. Example: Lucille’s daughter, Roberta, has cerebral palsy. Lucille may be able to transfer money to Roberta, her caregivers, an ABLE account, or a special needs trust set up for Robert’s care.
Transactions occurring during the look-back period may trigger a penalty period. The amount of the transactions may be deducted from Medicaid benefits.
Medicaid Eligibility is Complicated.
The first question of this blog was: “Should I Wait Until I Need Nursing Care?”
And the answer is, “No.” Whenever possible, Medicaid planning should begin well before you start the Medicaid application.
Does this mean your situation is hopeless if you waited too long? No, an experienced elder law attorney may be able to help you minimize the damage and become eligible as soon as possible.
We Can Help with Medicaid Eligibility Concerns.
The attorneys at Miller Estate and Elder Law know how to assist you with your Medicaid application and eligibility planning. We have helped many families just like yours save thousands of dollars and get qualified for Medicaid. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
