by Bill Miller | Sep 13, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
If you or a family member have ever needed long-term care, then you probably understand the importance of Medicaid, especially Medicaid asset protection. While neither Medicare nor health insurance will cover the cost of long-term care, Medicaid will. However, to qualify for this prodigious benefit, one must meet the income and asset restrictions.
Medicaid Asset Protection Trust Defined
A Medicaid asset protection trust is an irrevocable trust that is designed to hold assets so that they are no longer countable if you have to apply for Medicaid. This type of trust allows you to pass assets on to your children and grandchildren because they are not counted for Medicaid purposes and therefore do not have to be “spent down” to qualify for Medicaid. A Medicaid asset protection trust should be established at least 60 months before your application date, so it’s critical that you take advantage of Medicaid planning before the need arises.
Why You Need One
If you ever have to go into long-term nursing home care, the assets in the Medicaid asset protection trust are not considered by Medicaid as long as they’ve been held in the trust for at least 60 months. What this means is that even with your money and assets in this trust, no one can touch or move your assets.
For people who are trying to protect their assets from long-term care costs, a Medicaid asset protection trust is a great option. This is also a much safer option than giving away your assets to your children, because your assets are protected and not at risk to your children’s creditors – such as divorce, tax liens, lawsuits, bankruptcies, etc.
With the Medicaid asset protection trust, you get the benefits of having your children managing your assets without risking your assets to their creditors and predators. If protecting your assets is important to you then we highly recommend medicaid planning as part of your estate plan.
If you would like to explore the option of a Medicaid asset protection trust, then contact Miller Estate & Elder Law at (256) 251-2137 or register for one of our free estate planning workshops.
by Bill Miller | Jul 13, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
Medicaid is widely known but often misconstrued. With laws and regulations constantly changing, there is a possibility that you’ve heard incorrect or outdated information along the way. We’re here to help debunk some of the most common misconceptions about Medicaid eligibility, but first let’s cover a few of the basics.
What Is Medicaid?
Medicaid provides health coverage to low income families, disabled adults, and nursing home residents.
Who is Eligible for Medicaid?
Medicaid Eligibility varies from group to group. You can find the full list of eligibility requirements on the Alabama Medicaid website.
Myth #1: You cannot use Medicaid and Medicare simultaneously
False. Medicare is a federal program that provides health coverage primarily for those over the age of 65. Medicaid is a federal and state program that provides health coverage to low income people, and those with disabilities. If you qualify for both Medicaid and Medicare, then you can use both.
Myth #2: Medicaid is a lot like Medicare
While Medicaid and Medicare can be similar, they are also very different. For instance, Medicare will only pay for 100 days of long-term care in a nursing home, while Medicaid will pay indefinitely for long-term care for recipients. Nursing home care in Alabama can cost around $70,000/year, so it’s important to plan ahead.
Myth #3: You can only apply for Medicaid if you are going to long-term care.
Did you learn to dial 9-1-1 after an emergency or before? If you have the proper Medicaid qualifications, then apply ASAP. It’s much easier to have Medicaid and not need it, than to need Medicaid and not have it.
Myth #4: Only lower income individuals are Medicaid qualified.
While it is true that Medicaid qualifications do have income restrictions, including Alabama Medicaid planning as part of your estate plan can be extremely beneficial. By planning ahead, it’s possible to use asset protection strategies to safeguard your estate.
Myth #5: Medicaid only looks at the individual’s income, so you can give away your assets to your spouse or kids.
Medicaid caseworkers will review all income, assets and financial records of both you and your spouse going back 60-months prior to the date on your application. Giving away assets or property in that 60-month period may tie up your application and cause penalties that can prevent you from getting the care you need.
Don’t let long-term care issues give you a sudden and unpleasant surprise. Know where you stand now, and how to plan for the future. At Miller Estate and Elder Law, we have helped many families with both advanced planning and crisis planning. Give us a call at 256-251-2137 or use our convenient contact form below to reach out to our legal team today.
by Bill Miller | May 24, 2021 | Blog, Elder Law, Medicaid, Medicaid Planning
According to the United States Census Bureau, by 2030 one in five residents in the United States will be of retirement age. Many of us will eventually require costly long-term care in our old age. Medicaid planning is one important step that helps individuals prepare for their loved ones’ care needs or for their own future long-term care needs and should be part of every estate plan.
Medicaid planning can help individuals make the most of the financial help available for long-term care in Alabama. Since there are income and asset caps for those hoping to qualify for Medicaid benefits, Medicaid planning can provide options for protecting assets and income while still qualifying for benefits.
What Is Medicaid Planning?
Medicaid planning will depend on an individual’s circumstances and can be as simple as receiving assistance with a Medicaid application. However, ideally, Medicaid planning should commence years in advance of any potential care needs and can involve the restructuring of financial assets to ensure eligibility for benefits.
If an individual’s income or assets exceed the caps set by Medicaid, various options may be available, such as Qualified Income Trusts (QIT) and converting countable assets into non-countable assets. Other challenges that Medicaid planners can help with include asset and income division in the event that one spouse needs long-term care while the other continues to live independently.
Contacting experienced attorneys that are Medicaid planners with the appropriate legal and financial expertise can be an important step for those hoping to qualify for Medicaid. Mistakes with Medicaid planning can lead to costly and irreversible consequences.
Mistakes to Avoid with Medicaid Planning
When making plans for long-term care, consider contacting an estate planning attorney to help you determine if either you or your loved one need residential or long-term care. It can be a substantial mistake to simply ignore planning issues, as Medicaid rules and eligibility criteria for benefits are complex and timely planning is essential. However, it is never too late to get help. Even once a loved one has moved into residential care, an attorney can still help with protecting assets and receiving Medicaid benefits.
Ignoring the Look-Back Period
While it can be tempting to transfer large sums to children or grandchildren in order to qualify for Medicaid benefits, in many instances this can be a detrimental decision. Your financial transactions will be subject to review going back several years. The so-called “look-back period” is currently 60 months in Alabama, according to Medicaid.
Other mistakes to avoid with Medicaid planning can include:
● Applying too early or too late
● Not having a power of attorney
● Not taking advantage of spousal protections
● Taking advice from friends and family rather than seeking professional help
Call Miller Estate and Elder Law Today for Medicaid Planning
Do not procrastinate when it comes to Medicaid planning. If you are reaching retirement age, planning for potential long-term care needs can be essential for your future financial health. An experienced elder law attorney from our firm can help you with all aspects of Medicaid planning, including but not limited to:
● Medicaid applications
● Meeting income and asset limits set by Medicaid
● Protecting your income and assets
● Assisting you with long term planning and immediate crisis situations
● Making sure your spouse’s income and assets are protected
Due to the look-back period, planning well in advance can be important. Contact Miller Estate and Elder Law today to find out how we can help you: 256-472-1900.
by Bill Miller | Mar 9, 2021 | Medicaid
As an estate planning attorney, you often feel like a broken record insisting on the importance of advance planning and foresight but then every once in a while, a case comes through the door that makes you feel like you should insist yet more. The following is one of those cases.
Mrs. Johnson [name changed for privacy reasons] arrived at our office with her son. Her husband, who was in rehabilitation recovering from a stroke, suffered from multiple ailments and required long-term nursing home care. While Mr. Johnson also had children of his own, they were not much involved in his life and so Mrs. Johnson and her son—of which Mr. Johnson was not the father—were all he had. The burden of care had become too much for them, though.
Mrs. Johnson had located an appropriate nursing home for her husband but had been informed that he could not be admitted for financial reasons. She had considered at-home hospice care but because it would not be full time and because her son worked, it would still be more than she could manage. What is more, Mrs. Johnson worried about the toll caretaking would inflict on her own health.
Together, Mr. & Mrs. Johnson had about $100k in accounts, their marital home, and a car. Each earned about $1,500 a month and together they lived a good life. If Mr. Johnson was forced to go to a nursing home, however, Mrs. Johnson would barely be able to scrape by. The decision she faced was agonizing and she did not know what to do. Neither nursing home nor hospice care presented a viable solution and yet something had to be done. Worse, Mrs. Johnson only had two days to act.
Working to get Medicaid to cover Mr. Johnson’s long-term nursing home care needs was the obvious fix but there was a sticking point. In addition to the assets just mentioned, Mr. Johnson had an account with $20,000 that was in his name alone. Since Medicaid will only allow a nursing home applicant to have $2,000 in assets, he was over-resourced and would not qualify.
In meeting with Mrs. Johnson and her son, we strategized a solution. In order to get her husband admitted to the nursing home, Mrs. Johnson would need to file for a conservatorship with the court such that she might gain access to Mr. Johnson’s account and spend down his assets. An Alabama Family Trust was used to do so and, ultimately, we were able to get Mr. Johnson admitted to the home and properly cared for.
The fee Mrs. Johnson needed to pay to gain the conservatorship was $3,000—two months of her personal income. Had Mr. Johnson filed a financial power of attorney long before any of this had happened, his wife would have need not payed anything to gain access to his account bring his assets under the threshold. Doing so would have taken no time and would have saved this couple significant money and tremendous stress.
To draft your own financial power of attorney or to address any other estate planning need, do not hesitate to contact Miller Estate and Elder Law. Our phone number is 256-472-1900 and we can also be reached via the contact form on our website.
by Bill Miller | Mar 1, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
A change in government inevitably means changes in legislation and the new administration is no exception. On his first day in office, President Biden signed ten executive orders which address a range of topics including vaccine production, testing, and access to healthcare. One, entitled “Executive Order on Strengthening Medicaid and the Affordable Care Act” is of special relevance to long-term care planning—a subject which concerns everyone, especially as Covid-19 continues to threaten communities.
Medicaid-Specific Changes
The central message of policy introduced by the new administration is that Medicaid will operate as a cornerstone of the Affordable Care Act and, according to Jocelyn Guyer, managing director at Manatt Health, “a primary vehicle for coverage for people, particularly during the pandemic.” This will be achieved in two principle ways.
First, states given ten-year expansion waivers which exempt them from certain provisions of federal law in state Medicaid programs may see those revoked. In turn, these states could receive increased federal funding aimed at expanding the program. Areas where significant gaps in low-income coverage exist are the most likely to be affected by such shifts in policy.
Second, the new administration is likely to act against block grants approved by the previous administration. These grants, which permit states to transform their Medicaid programs into demonstration projects that seek to develop alternative coverage options stand in the way of Medicaid’s expansion.
What Does This Mean for Individuals?
None of the changes mentioned have yet become policy and yet the Biden administration’s priorities are clear. Access to Medicaid looks set to expand and policies that undermine protections for patients with pre-existing conditions, create barriers to coverage, or reduce affordability will likely be eliminated. This means that even more so than before, Medicaid is the best way for most US families to gain protection from the crippling costs of long-term care.
The sooner you begin planning, the easier it is to ensure you qualify for Medicaid when you need it. After all, one aspect of the program that is sure not to change regardless of who sits in the Oval Office is the five-year lookback period employed to dissuade applicants from making inappropriate gifts or transfers for the purpose of meeting Medicaid’s asset and income limitations. This rule means that individuals who strategically shuffle around finances within the five-year period preceding their need for Medicaid are subject to a penalty period inhibiting their access to the program. If planning begins more than five years prior, however, access can be assured.
There is nothing wrong with arranging assets to make sure you are covered in your golden years. As a rule of thumb, in 2021 an individual must have income less than $2,382 per month and no more than $2,000 in in assets to qualify for nursing home Medicaid. While these limitations do not count an individual’s house, they are nonetheless stringent enough to exclude most middle-income families. Nonetheless, most middle-income families will struggle to pay the average $8,700 monthly cost of nursing home care and so planning to ensure you aren’t stuck with such a bill is crucial.
At Miller Estate and Elder Law we offer free estate planning and asset protection workshops designed to educate clients about how best to plan for their individual long-term care needs. We also bring years of experience to the planning process, itself, and so whether you are looking to get started or simply learn more about how Medicaid is changing in 2021, don’t hesitate to give our office a call at 256 251-2137 or contact us through our website.
by Bill Miller | Jan 18, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
With 2020 now receding from view and an end to the Covid-19 pandemic (hopefully) in sight, that sigh of relief so many of us need is finally on the horizon. The New Year brings promise of better times and yet it would be foolish to forget the lessons of the last twelve months. Chief among these is that health cannot be taken for granted and having a plan to ensure access to care is essential. For millions nation-wide, this means organizing assets in order to qualify for Medicaid. After all, despite common misconception, Medicaid is the best way for many folks to gain the long-term care coverage they need.
Five Frequent Medicaid Myths
- Only Low-Income Adults Qualify
This is both the most common and most deeply-flawed misunderstanding on this list. First, nearly half (49.7%) of the 76 million Americans receiving Medicaid are children (which is part of why planning is essential for people of any age) and second, many millions of middle-income individuals may qualify with proper foresight.
- Gaining Coverage Means Hiding Your Assets
Not only is this notion mistaken, it is unethical. An experienced (and honest) attorney can walk you through such common practices as spousal income and asset transfers, annuities, Medicaid asset protection trusts, and qualified income trusts (to name just a few legal instruments). All of these both work to preserve your assets and are reported directly to Medicaid through the application process.
- Medicaid Means You (or Your Parents) Will Lose Their Home
This misconception is related to the above but because of its prevalence (and frightening nature) it deserves individual mention. Contrary to popular belief, Medicaid rules, in fact, aim to preserve the family home. What’s more, a well-organized plan can prevent the home from being lost in what is referred to as estate recovery when the person receiving benefits dies. While too much to get into here, an experienced attorney can walk you through all of the details.
- Medicaid Only Covers Nursing Homes
It is true that traditionally Medicaid has mostly paid for nursing home care costs and yet (because nobody wants to be in a nursing home) some states, including Texas, offer home and community-based services (HCBS) programs. These programs allow beneficiaries to receive care in their own home or community rather than in an isolated setting and strive to make lifestyle decisions in consultation with each individual’s unique needs.
- It Is Too Late to Gain Coverage
Regardless of your age, financial well-being, or medical history, it is never too late (or too early!) to initiate long-term care planning. While it is true that Medicaid employs a five-year look-back period when assessing an applicant’s financial eligibility, you may still gain access and retain significant assets with proper planning even if you need care now.
According to government data, a person turning 65 today has an almost 70% chance of needing some type of long-term care in their remaining years. Such care comes at an overwhelming cost and yet this need not be a burden if you have a plan in place. The simple act of getting started on building such a plan provides immense relief and if there’s one thing most people in the US need right now, it’s just that: relief.
Download our FREE Medicaid Planning in Alabama: What You Need To Know Guide to help you get the ball rolling toward a worry-free 2021! Contact us today to set up a consultation or if you have any questions.
