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Medicaid Planning

Many people are terrified of the looming costs of nursing home care in America. Most families want to provide their loved ones with good, quality care during their last decade(s), but the skyrocketing costs of long-term care make that nearly impossible for so many families. Surprisingly, approximately 70% of nursing home residents rely on Medicaid to assist in their payments for long-term care.

Medicaid planning can be complex, but it can also be well worth a family's time. Medicaid planning generally falls into two planning categories:

1. Proactive Medicaid Planning -- this type of planning is usually targeted at protecting major assets by restructuring them through gifting and the use of irrevocable trusts. In all scenarios, any gifting must take into account the five-year "look-back" period. For instance, if a farmer or landowner wants to protect the family property, there are proactive steps we can take with the client to protect these assets when they plan ahead. This type of planning can benefit nearly anyone.

2. Crisis Medicaid Planning -- unfortunately, this type of planning is the more common form of Medicaid planning. Crisis Medicaid planning is geared toward protecting as many assets as possible, with the "crisis" part coming into play because most of these clients need care right away. As a result, there is not sufficient time to use proactive Medicaid planning alternatives. Typically, the client is in immediate need of long-term care and the question becomes how can we protect the most assets and get the client on Medicaid as soon as possible. There are different ways to assist an individual or a couple when the need arises, and this planning is highly customized.

Proactive Medicaid Planning

Nearly everyone can benefit from planning in advance to proactively protect their assets from the rising costs of long-term care. Medicaid currently has a five-year "look-back" period for any gifting of assets. This means at the time of the Medicaid application a client will need to declare any gifts they have made in the last five (5) years to assist in the qualification for Medicaid. If there are gifts within the last 5 years, penalties will apply to the applicant delaying their ability to qualify for Medicaid. On the other hand, gifts made more than 5 years from the date of application will not count against the Medicaid applicant.

A Farming Example

Most proactive Medicaid planning is focused on protecting either a significant asset (like a farm or a company) or some other combination of assets. Irrevocable trusts can be designed in such a way that these assets are protected, and perhaps even offer income to the original owners for the rest of their lifetime. For instance, a farming family might place a farm into an irrevocable trust, ensure the income goes to the original owners and let the trustee (often the adult kids) manage the farm for the original owners. When this planning is done far enough in advance, the assets can be protected and the individuals can be in a better position to qualify for Medicaid in the future. When proactive Medicaid planning is combined with other forms of paying for long-term care, this alternative has even more value for their family.

Crisis Medicaid Planning

Commonly called "spend down" or "Division of Assets," crisis Medicaid planning is designated to protect assets as much as possible while making sure the family member in need of care qualifies for Medicaid as soon as possible. Typically, some sort of care crisis is involved, and the family member is in need of a level of care only available within a care facility or nursing home.

Medicaid laws certainly can change, and the interpretation of these laws is sometimes a moving target with the Medicaid agencies, but there are proven, legal methods for a client to maximize their asset protection during these crisis times. The combination of knowing these laws, understanding how they would (or would not) apply to a specific client situation and knowing the proper sequence of steps to maximize asset protection is the heart of crisis Medicaid planning.

Common parts of crisis Medicaid planning are intelligent spend down decisions for assets that need to be reduced for Medicaid qualification, targeted gifting to protect the largest quantity of assets, use of other Medicaid-compliant financial options to better protect the assets, finalizing a Division of Assets for married couples and leveraging all the other exceptions to minimize the risk of Medicaid recovering against these assets when a family member eventually passes away.

There are proven methods to use with crisis Medicaid planning to best protect assets, and an individual needs to talk with our office to determine what options are best for your situation. One size does not fit all with crisis Medicaid planning, but many families have protected signifiant assets with this type of planning in their time of need.

Post-Qualification Planning: Protecting the Well Spouse

This additional planning is primarily used with married couples. Once a senior has qualified for Medicaid, additional steps need to be followed to protect the well-spouse's assets. The well spouse, commonly called the Community Spouse, is the spouse who is still healthy enough to be at home or live without a high level of care, and there are additional steps this spouse should take to further protect their assets before they need long-term care.

Medicaid will recover against any assets remaining at death to help pay back any expenses distributed for a Medicaid recipient. There are certainly rules to follow when a loved one is receiving Medicaid, but there are also intelligent steps the Community Spouse can take to better position themselves for their own long-term care needs.

Your "No-Cost" Consultation

Planning ahead for long-term care, or even planning when someone is already in a nursing home, is the best approach to take when it comes to expensive long-term care costs. Through the use of legal tools, it is possible to pay for good care while protecting all that you or your loved one has worked so hard for all their life. We focus on Medicaid planning and other aspects of elder law to help assess your financial situation and find available benefits to pay for care. This means your family assets can be protected, and your loved one can be well cared for.

Give us a call today to discuss your unique situation at 913-345-2323. We will be more than happy to assist you and schedule a "no-cost" consultation with an attorney.

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