PROTECTING YOUR ASSETS FROM MEDICAID

Asset Protection planning, with a view towards gaining Medicaid eligibility, is done at different times in a client’s life and is either:

  1. Proactive planning where all assets, which are placed into a trust, are protected. OR

  2. Crisis planning where we assist clients in accomplishing two goals:

         1. Achieving Medicaid eligibility at the earliest date possible;

         2. Protecting as many assets as is possible.

A FEW FACTS IN A COMPLICATED AREA

We are discussing Medicaid, not Medicare. Medicare is short term insurance that pays for doctor’s visits and short hospital stays, etc. Medicaid pays for long term care - nursing home care.

Medicaid eligibility planning is complicated. That is the reason you have visited my website. Hopefully, you are doing this research well in advance. However, if you or your loved one is in crisis we will help. Call us.

Medicaid dollars are federal dollars administered by the State. Federal statutes prescribe certain guidelines that states must adhere to and some guidelines that allow the states to set certain criteria. Therefore, there are 50 sets of rules. Louisiana has its set of rules which we must adhere to when planning for our clients.

Medicaid is means tested. This means that a person may only own certain types of assets and cash equivalents of a limited value. The type of asset is important.

Generally, a client may not make an uncompensated gift within 60 months (5 years) prior to filing the Medicaid application. An uncompensated gift is a gift or sale for less than fair market value. There are some exceptions to the gifting rule.

The 60 months is called the “look back” period. A gift during this period will cause a penalty period. The penalty period is calculated by taking the value of the gift and dividing by $4,000. $4,000 is Louisiana’s factor because, supposedly, this is the average cost of nursing home care per month within our state. The result of this division is the number of penalty months or the number of months that the person must private pay because of the uncompensated gift.

Example: Gift of $20,000 ÷ $4,000 = 5 penalty months

Estate recovery means that the State of Louisiana will make a claim against the estate of a person for whom it paid nursing home costs after the person is deceased. Proactive Medicaid planning protects against this.

There are many more rules that our office will negotiate for you.

 

PROACTIVE PLANNING

This planning is done early while a client is healthy and gifts, most often into trust, can be made well before a Medicaid application is needed; Specifically more than 60 months prior to the application. We can protect all assets placed into the trust.

 

CRISIS PLANNING

We receive many calls from families whose loved one has already been admitted to a nursing home or whose nursing home admittance is imminent. In this situation we will help the family protect as many assets as we can through proven strategies.

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Do not lose your hard earned assets. Call us to make an appointment to discuss a MAPT (Medicaid Asset Protection Trust) and how it offers protection for your assets.