Medicaid Asset Protection Attorney: How They Can Save Your Assets?

Medicaid Asset Protection Attorney: How They Can Save Your Assets?

If the U.S Department of Health and Human Services is to be believed, people over the age of 65 today have nearly a 70 percent chance of needing some form of long-term care services. There are three ways by which one can fund long-term care.

They can either rely on their own money, buy a long-term care insurance policy, or opt for the Medicaid program. Most elders wish to leave behind their assets and life savings. Hence, Medicaid has often been deemed a viable option.

Medicaid is a federal-state healthcare program that can pay for LTC, provided you meet its means-testing restrictions. In other words, Medicaid is restricted to people with limited financial means. It can get tricky to qualify for Medicaid… unless you have a reliable Medicaid planning attorney helping you.

Medicaid Planning lawyers can help you get the care you’ll need in the future while protecting your assets by leveraging some effective financial and legal strategies.

As a firm specializing in elder law, we at the offices of Sean Patrick Cox are constantly inundated with doubts and queries regarding Medicaid Asset protection. With this article, we wish to clear the air surrounding this topic with an in-depth look into every aspect of this crucial area of elder law.

So, without much further ado, let’s start by looking into what makes Medicaid eligibility so challenging.

Medicaid Eligibility Requirements

To be eligible for long-term care through Medicaid, one must meet its financial qualification parameters and have a genuine need for care. Financially speaking, all states in the U.S. consider the income and assets one owns to determine whether they’re eligible.

To qualify for Medicaid today, you’ll need to earn a monthly income that is not more than $2523. This number will vary from state-to-state. Furthermore, the asset limit to qualify for Medicaid across America ranges from $2000 to $130,000. 

If you have asset or income above the restrictions mentioned, you can still employ strategies and take advantage of exemptions to qualify for Medicaid. From gifting assets to transferring them to your spouse or loved ones, there are many things you can do to become eligible for LTC via Medicaid.

There are some conditions and specific regulations that you’ll need to pay attention to. This is where a Medicaid eligibility attorney can come to your rescue.

Medicaid Planning Strategies

Medicaid planning for long-term care entails careful deliberation and a thorough understanding of regulations governing Medicaid. A Medicaid protection attorney uses their years of experience and insight into Medicaid and state laws to help you qualify for the program easily.

For instance, they can help you implement the following strategies

1. Planning Ahead to Protect Assets

To pass Medicaid’s means-based test, you can try gifting your assets to someone close. That said, Medicaid has a five-year look-back provision. This basically states that any transfer of assets must occur at least 5 years before applying for Medicaid. It is in your best interest to start planning way ahead of time to increase your chances of qualifying.

2. Irrevocable Trusts

Another effective strategy is setting up an irrevocable trust. Any assets more than the financial limits set by the Medicaid program can be transferred into this trust. The assets in this trust will be shielded from any fines and penalties.

3. Medicaid Compliant Annuities

 You can also try using assets above the financial limits imposed to buy a Medicaid annuity. This annuity can possibly generate enough income to cover the costs of long-term care. However, remember that annuities are expensive, and some states limit their use.

4. Other Strategies

You can also try the below strategies for effective Medicaid Asset Protection

• Use Qualified Income Trusts and Pooled Income Trusts
• Create and enforce a caregiver agreement.
• Transfer assets to spouse

For trusts, we suggest you seek the advice of a seasoned Medicaid trust attorney.

The Role of a Medicaid Asset Protection Attorney

When it comes to Medicaid Planning, a professional that specializes in this field is perhaps your best bet. They can help you in the following ways

1. Identifying Potential Issues and Risks

The rules and regulations surrounding Medicaid are complex. One mistake can leave you facing heavy fines and penalties. A Medicaid planning lawyer can use their profound understating of state-specific laws to help avoid grave mistakes during any stage of the Medicaid application process.

2. Developing a Customized Plan

A good lawyer will sit down with their clients and understand what they seek. They’ll develop a strategy that’s customized to best suit each client’s specific circumstances and requirements.

3. Assisting with the Application Process

Eligibility also depends on flawless application submission. An experienced lawyer knows what the entire process entails and will make sure you are on the right path. They’ll ensure the application process is fast and impervious to errors.

4. Advocating for Clients during Appeals and Disputes

An experienced lawyer is best when it comes to advocating for your rights and interests. They’ll use their expertise in the legal field to help you settle disputes or submit an appeal.

Choosing a Medicaid Asset Protection Attorney

To find the best Medicaid Planning Lawyer, you’ll first need to verify their qualification and experience. You want a lawyer that possesses substantial experience in the field of Medicaid planning. They must harbour a long and positive track record.

Once you have a lawyer that meets these parameters, set up a meeting and ask the following questions

1. Do I qualify for Medicaid?
2. What is my state’s asset and income limit for Medicaid eligibility?
3. What does the Medicaid application process entail?
4. Can you help with Medicaid planning for a nursing home?
5. What assets are exempt From Medicaid?
6. What are the attorney’s fees?
7. Do you offer a flexible payment plan?

An attorney that answers all these questions with considerable clarity, patience, and politeness is your ideal option.

Benefits of Hiring a Medicaid Asset Protection Attorney

There are many benefits to hiring a Medicaid Asset Protection lawyer. Some of the most prominent advantages are as follows

1. Avoiding Common Mistakes

Medicaid planning professional understand the program intricately and are privy to the state-specific laws that regulate them. They can use this knowledge to make sure your application is error-free and legally compliant.

2. Maximizing Asset Protection

They’ll employ strategies like set up an asset protection trust, buy Medicaid annuities, or initiating spousal asset transfer to make sure you don’t lose your assets to the federal program.

3. Reducing Stress and Anxiety

You can rely on a seasoned attorney’s capable shoulders to make sure the entire Medicaid application process is executed smoothly. You can focus on other important matters of your life while your attorney takes care of Medicaid planning.

4. Saving Money in the Long Run

Incompetent Medicaid planning could result in heavy penalties and fines. You can rely on an attorney to help you smoothly navigate the process early on to avoid spending a boatload of money due to delayed or improper planning.

Common Medicaid Asset Protection Mistakes

Knowing mistakes that are typically committed during Medicaid planning can help you avoid them altogether. Following are mistakes you should be aware of

1. Transferring Assets Too Late

The 5-year-look back rule states that you can only transfer assets 5 years before applying for Medicaid. Simply put, transferring assets right when you need long-term care will be deemed a violation. Get in touch with a lawyer and start planning right away.

2. Medicaid Rules and Regulations

Understanding the legal jargon that’s involved in Medicaid can be challenging for common folks. Plus, these laws are volatile and keep changing. Not complying with these rule and regulation could land you in serious trouble.

3. Trusting Non-Attorney Advisors

Perhaps the worst mistake you can make when it comes to Medicaid planning is trusting the advice of a non-attorney. Advice from such entities can cost you a lot of time, money, and peace of mind. Trust nobody but the most reputed lawyers in your vicinity.

Medicaid Planning for Business Owners

If you are a business owner, then you probably possess business assets and an operating account. Most businessmen are concerned about losing both elements to qualify for Medicaid. Thankfully, there are some exemptions that directly benefit business owners when it comes to determining Medicaid eligibility.

These asset exemptions include

• All income-generating properties used in trade
• Liquid resources used in trade
• Value of one’s primary vehicle
• Value of one’s primary residence

While some assets are exempt from Medicaid eligibility requirements, the income a business earns is not. You do have the option of re-structuring your assets to meet the Medicaid spend down requirements.

You can also transfer your business to your rightful heir or someone else at least 5 years before applying for Medicaid.

Medicaid Planning for Married Couples

Unexpected long-term care needed by one spouse can throw the other spouse in unfathomable emotional and financial duress. Proper Medicaid planning ahead of time can help one or both spouses secure long-term care. There are many strategies that Married couples can employ to make this happen

For instance, a couple can convert their joint living trust into single living trust. This trust will act as a safety net for one spouse in the event the other passes away. Couples can also set-up an irrevocable trust with their child named as the trustee. Furthermore, they could also try establishing a sole benefit trust, which could protect all their investments.

The healthy spouse can also benefit from the special Spousal Impoverishment Rule dictated by Medicaid.

This rule was enforced to protect a non-applicant spouse from falling into poverty. The rule entails programs like the MMMNA (Minimum Monthly Maintenance Needs Allowance) and the CSRA (Community Spouse Resource Allocation), both of which can protect a portion of the couple’s wealth for the benefit of the healthy spouse.

Medicaid Estate Recovery

If you are the recipient of Medicaid for long-term care, the state has every right to recover the amount it spends on your healthcare from the estate you leave behind after death. This, of course, depends on the state. The estate could include all your real and personal property. There are some notable exceptions to this.

Your estate will be exempt from recovery if you have a spouse that’s still alive. Your heirs also have the option of seeking a hardship waiver to prevent estate recovery. Planning ahead of time will give you the advantage you need to protect your assets against Medicaid.

Medicaid Fraud and Abuse

Medicaid program, just like any other government system, is rampant with fraud and abuse. Being a victim to such a fraud can dramatically increase the cost of Medicaid and put you in great harm. Below are a few examples of Medicaid Fraud and Abuse that you should be privy to

• Being billed knowingly for services not provided
• Being billed intentionally for more services than provided
• Using somebody else’s Medicaid ID to get services
• Not reporting all assets and income when applying
• Application of inaccurate codes to increase bill amount

Depending on the fraud committed, one could face heavy fines that could cost hundreds and thousands of dollars. For instance, filing false claims could result in fines that is up to three times the loss suffered by the program… in addition to $11000 per fraudulent claim filed.

Simply follow the below advice to avoid such costly penalties

• Do not use anybody else’s Medicaid ID
• Do not give your Medicaid ID to a stranger
• Get a written description of all the services provided
• Note down the names of people that are providing you healthcare services
• Seek the help of a Medicaid planning lawyer.

Medicaid Planning in Crisis

Health scares are often very sudden. You never know when you’ll need long-term care, especially when you’ve crossed 65 years of age. Due to the 5-year look back policy of Medicaid, emergency planning to protect your assets will be futile. This is why it is important to start planning in advance.

All the strategies we’ve mentioned in this article should be put into play immediately with the help of a reputable attorney. This includes everything from transferring of assets to somebody else opening an asset protection trust to gifting assets.

There are exemptions to the 5-year look-back policy. Taking advantage of them could help you secure Medicaid in the moment of crisis while protecting your assets. For instance

• You can try the Community Spouse Resource Allowance
• Transfer assets to a disabled child under 21
• Transfer home to adult children who also serve as your primary caregivers
• Pay off any debt you have

Alternatives to Medicaid Asset Protection Planning

Besides Medicaid, you can opt for the following alternatives to fund your long-term care.

1. Private Long-Term Insurance Policy

A private long-term insurance policy will provide you specific type of health coverage. The services provided are those that aren’t typically covered by Medicare. It is expensive and not all will be eligible for it.

2. Self-Insure

Self-insuring basically means setting aside some of your own money to pay for long-term care. This is a great option if you have substantial life savings to fall back on and don’t wish to pass your estate down to certain beneficiaries.

3. Other Options

You could also try opting for a short-term care insurance, critical illness insurance, pre-plan using deferred annuities, or take out an annuity with a long-term care rider.

Medicaid Planning for Veterans

According to the Kaiser Family Foundation, nearly 40% of Veterans in America only rely on Medicaid for their health coverage. The eligibility rules are the same for veterans as well. However, Veterans also have the privilege of availing special benefits from the VA program.

Benefits Veterans Receive from VA

• Housebound Benefits
• Veteran’s Pension
• Survivors Pension
• Aid and Attendance Benefits

As for which is better – Medicaid or VA. If a veteran needs assisted living or home care, then VA is better. On the other, if they need nursing home care, Medicaid is a better alternative. To get the most benefits out of Medicaid as a veteran, we recommend hiring the services of a Medicaid planning attorney. They’ll arm you with financial and legal strategies that are bound to maximize your benefits while securing your family’s future.

Medicaid and Estate Planning

Estate and Medicaid planning go hand-in-hand. Estate planning involves the creation of wills, durable power of attorney, setting up trusts, and performing other activities crucial to meeting the Medicaid’s asset limits.

A comprehensive Estate Plan will do a lot more than protect your assets

• It will ensure only your rightful heirs inherit your estate
• Prevent family disputes after your death
• Save your heirs from court fees, tax liabilities, and other needless legal charges
• Help your heirs avoid the probate process
• Dictate how you’ll be taken care of in the event of your incapacitation.

The primary role of an estate plan is to ensure your wishes… after death, are honoured. The plan guarantees your assets are transferred to designated beneficiaries on time and ensure you meet Medicaid’s income and asset limit requirements.

To know more about Medicaid and Estate planning, we suggest you give the seasoned Medicaid estate planning attorney at Sean Patrick Cox a call today.

Conclusion

7 in 10 Americans are expected to need long-term care in 2023. The best option most of these folks have is Medicaid, provided they meet their eligibility requirements. Failure to do so could compel you to rely on your lifesavings, leaving very little for your heirs to inherit.

Even if you do manage to secure Medicaid, your state may choose to recover the cost it spent on your care by laying claim to your estate upon your death. This is where you’ll need a good Medicaid planning attorney as your ally. They’ll help you take advantage of effective financial and legal strategies to protect your assets and guarantee long-term care via Medicaid.

Competent Medicaid Planning for seniors is something we at the offices of Sean Patrick Cox have excelled at ever since our inception. So, if you wish to maximize your Medicaid benefits while shielding your life’s savings, we suggest you give our law firm a call right away.

Initial meeting with our attorney is absolutely free. 

FAQ

Q1. What is the difference between Medicare and Medicaid?

Ans: Medicare is a federal health insurance program that coverage against certain diseases and disabilities to people over 65 years of age and some folks under the age of 65. Medicaid, on the other hands, is a joint state and federal program that provides health coverage for people with limited income and resources.

Q2. How can a Medicaid Asset Protection Attorney Help Me?

Ans: A Medicaid Asset Protection Attorney can use their thorough understanding of Medicaid regulation to help you meet eligibility requirements. They can help you stay legally compliant and protect your assets and life’s saving by employing strategies like building an irrevocable trust, initiating transfer of assets, create a will, etc.

Q3. What are the income and asset requirements for Medicaid Eligibility?

Ans: The answer here will vary from state to state. However, you can expect the income limit to be not more than $2000/month and an asset limit ranging from $2000 to $130000 across states in the U.S.

Q4. How much does it cost to work with a Medicaid Asset Protection Attorney?

Ans: It depends on the kind of services you seek and the lawyer themselves. Some lawyers charge a fixed rate while other charge on an hourly basis. We suggest you give us at the offices of Sean Patrick Cox a call for clarity on prices.

Q5. What happens if I transfer assets close to applying for Medicaid?

Ans: You’ll be violating Medicaid’s 5-year look-back policy that specifically prohibits the transfer of assets 5 years before applying for Medicaid.

Q6. What is Medicaid estate recovery and how can I avoid it?

Ans: Medicaid estate recovery basically means that the state will recover the cost it spent on your long-term care by laying claim to the assets you left behind after death. Estate recovery can be avoided by transferring the assets to a spouse or heir in advance. Your heirs can seek hardship waiver to prevent estate recovery as well.

Q7. How does Medicaid Planning differ for Veterans?

Ans: Veterans have to go through the same eligibility requirements as the rest of Americans to qualify for Medicaid long-term care. However, Veterans are also eligible for VA benefits that they care rely on to fund assisted living services and home care.

Q8. Can I still plan for Medicaid if I have significant assets?

Ans: Yes, you can. You can establish an asset or income protection trust, gift assets or transfer them to your heir or spouse and employ other effective legal strategies with the assistance of an expert attorney.

Q9. How does Medicaid planning fit into my overall estate planning goals?

Ans: Medicaid Planning and Estate Planning go hand-in-hand. Most of Estate Planning goal’s like creating a will, establishing a trust, forming a durable power of attorney can all help you meet Medicaid’s strict asset and income limits.

Q10. Are there any downsides to Medicaid planning? 

Ans: Not planning ahead of time, not staying current with your state’s specific Medicaid regulations, making errors during the application process, etc. can all result in you facing heavy fines and penalties. Hiring a Medicaid planning attorney can help you avoid these hurdles.