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 With laws and regulations constantly changing, there is a possibility that you’ve heard incorrect or outdated information along the way.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 | 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 | Apr 14, 2020 | Medicaid, Nursing Home
Giving Away Assets to Qualify for Medicaid
Giving away assets to qualify for Medicaid is a strategy that many people use when they are concerned that they might be going into a nursing home because they think it will help them qualify for Medicaid more quickly. Unfortunately, giving away assets usually involves way more risks and harm than good.
Medicaid has a 60 Month Look Back
Medicaid has a 60 month look back from the time you file your Medicaid application. Therefore, if you’ve given away any assets within the 60 months prior to filing your application, Medicaid is going to penalize you for those giveaways and you won’t qualify. The penalty is based on how much money you gave away during the 60 months prior to the application. The penalty is calculated by taking the amount given away and dividing that by a monthly divisor which is set by Medicaid each year. For example, if you have given away $64,000 within the past 60 months and the Medicaid penalty divisor is $6,400, Medicaid will impose a 60 month penalty.
There are More Risks Than Rewards When You Give Assets Away
The other problem with giving away assets is that once you give them away you no longer have control over them. Whoever you give the assets to has potential creditors and predators and your assets are now subject to those creditors. Most people say well, my son or my daughter would never do anything with my assets. However, what if they get sued? What if they get a divorce? What if they have to file bankruptcy?
Once you give your assets away to that person, then your assets are now subject to their bankruptcy filings, divorces, lawsuits, etc. I’ve seen more people than I can count unfortunately who used this strategy and had to go into a nursing home and the assets were no longer there and they couldn’t get the care that they needed. While there are strategies to protect assets from long term care costs, giving them away to relatives is not something that I recommend. There are better ways to accomplish the same objective without the risks.
To learn more, get a copy of our guide Medicaid in Alabama – What You Need to Know. You can also give us call at 256 251-2137.
by Bill Miller | Jan 23, 2020 | Blog, Elder Care Planning, Medicaid, Medicaid Qualification, Nursing Home
Hearing a doctor say that your loved one needs skilled nursing care, 24/7, can be a real shock. Chances are, you have not given much thought to planning for long-term care. If you have just learned that your dad or mom needs 24/7 care – or think this may happen in the future – continue reading to learn more about what you can do to help.
The Realities of 24/7 Care
If your mom needs 24/7 care, you are not alone. In fact, the following statistics tell an interesting story about long-term care:
- 52% of people age 65 right now will need long-term care at some point.
- 47% of men and 58% of women age 65 or older face long-term care.
Some people will need skilled nursing care for years. The cost of 24/7 care can be staggering. In Alabama, the monthly costs for long-term care in 2018 were:
- $3,241 for homemaker services or a home health aide
- $3,271 for an assisted living facility
- $6,279 for a semi-private room in a nursing facility
- $6,661 for a private room in a nursing facility
What can you do to help someone who needs 24/7 care?
Applying for Medicaid
Once you find a good nursing home, you need to figure out how to pay for it. This can be tricky. There are basically three ways to pay for long-term care: self-pay, long-term care insurance, and Medicaid.
You may need the Medicaid money now but don’t know how to get it or even if you will be eligible.
Medicaid offers a number of programs to provide medical care for people with limited assets and resources. To qualify, the application will need to meet certain asset and resource tests. For example, someone who needs 24/7 care must not earn more than $2,250 per month or have more than $2,000 in resources.
Applying for Medicaid can be frustrating and time consuming, in part because of the amount of supporting documentation. In addition, Medicaid case workers will review the applicant’s finances for a 60-month period prior to the application date. Certain transactions made during that time may disqualify the applicant from or delay benefits.
Medicaid Is Complicated. We Can Help.
It’s possible – and highly recommended – to plan ahead for incapacity and long-term care. Estate
planning can help, especially if Medicaid planning is included.
For a free consultation with an experienced Alabama estate planning attorney, contact Bill Miller
at 256-472-1900. Miller Estate and Elder Law is now located at 818 Leighton Avenue in
Anniston, but we serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding
areas.
