When most people think of “Medicaid planning” they immediately
think of asset protection. When most people think of “asset protection”
they then think of giving away money to qualify for Medicaid. At one end
of the spectrum is the family member who feels that their parents’
money is for their parents’ benefit and not for making gifts to
family members. At the other end of the spectrum is the family member
who is all for protecting every last penny. Most people fall in the middle
of this continuum. Before determining whether Medicaid planning is okay,
it is important to know what exactly we mean by “Medicaid planning.”
It’s Not Just About Gifts
While gifting can certainly be part of Medicaid planning, it is more than
that. In order to qualify for Medicaid for long-term care, assets must
be below a certain amount. Some assets count towards this asset total
while others do not. Any planning process begins by looking at “countable
assets.” Even if family members have no interest in gifting assets,
they may still need assistance in identifying and then liquidating countable
assets. The planning may end once excess assets are identified and liquidated.
The next step in the planning process would be to make sure that whoever
is in a long-term care facility has what he or she needs to live comfortably.
Upgrading to a better wheelchair or purchasing a larger television would
be examples of items that could help an individual to be more comfortable
In a situation where one spouse needs long-term care while the other can
still live at home, planning becomes more critical. Even while on Medicaid,
the spouse in long-term care must contribute nearly all of his or her
income towards the nursing home costs, and Medicaid then makes up the
difference. This means that the spouse who still lives at home will lose
that source of income. This can be a scary thought. People have come into
our office thinking they would need to return to work or sell their house
because their spouse needed long-term care. Fortunately, there are ways
to make sure that the spouse living at home can continue to live in the
same home without having to return to work.
There are Rules
The Medicaid statutes and regulations allow opportunities for planning.
This includes making gifts. That’s the good news. The bad news:
there are statutes and regulations. The statutes and regulations tend
to be complicated and they need to be followed to the letter or the Medicaid
application will be denied. Whether you simply need to know how to spend
down the rest of a parent’s assets or you want to maximize the income
for a parent living at home, we can help you navigate the murky waters
of the Medicaid rules.