Qualifying for Medicaid Attorneys in Colorado
In order to qualify for Medicaid, a single person can only have $2,000 worth of assets in their name - the so-called "countable assets." When adding up the assets, certain assets do not count against the $2,000 amount. For instance, a home does not count as long as it has a market value of less than $500,000. As a general rule, most personal items do not count. One vehicle does not count towards the total. Pre-need burial arrangements can also become exempt if such arrangements are made "irrevocable."
What about giving money away? The short answer is that Medicaid does not want someone in need of long-term care to give away their assets, go into a long-term care facility, and then immediately apply for Medicaid benefits. If someone were to do this, Medicaid would impose a waiting period before the person would be eligible to receive benefits. The length of this waiting period is based on the amount given away. "Gifts" also include buying assets for less than fair value, so no buying grandma's house for half price. However, there are still planning opportunities available that allow some gifting of assets. These rules get complicated and if not done correctly will result in a waiting period.
Understanding Medicaid's Income Rules
In addition to the asset rules, Medicaid also has income rules. For 2015, a nursing home resident can earn no more than $2,199 per month. Of course, the monthly cost of a nursing is much more than that. The average Medicaid cost of nursing home care in Colorado is $7,249. This places most middle-class folks in a "gap" between the maximum income and the average cost of a nursing home. Fortunately, there is a way to close this gap through the use of an income trust.
Opportunities for Community Spouses
For couples where one spouse requires long-term care while the other remains at home, there are more planning opportunities. In addition to a home worth less than $500,000, the spouse that remains at home - or the "community spouse" - can keep $119,200 in assets. The same exempt assets apply to couples as for single applicants. In addition, there really is no limit on the amount of income that the community spouse can earn. This provides opportunities to convert countable assets into exempt assets or, through the correct use of specific Medicaid-compliant annuities, to assets that increase the income for the community spouse. In short, the community spouse does not need to become impoverished in order to provide for the long-term care for the other spouse.
Do not hesitate to contact us to learn more about how we can guide you through the process.