Medicaid Planning

Medicaid is a government program that can be used to pay for home care or nursing home care. As a means-tested government program, a client’s assets or income cannot exceed certain limits to qualify for Medicaid. Having said that, there is almost always a way for a client to qualify for Medicaid benefits.

Planning for a client’s long-term care, as well as the possibility that the client will want to use Medicaid to pay for his or her long-term care, should be considered from the beginning. The sooner Medicaid planning is completed, the more likely the client will be able to receive Medicaid benefits without having to contribute any of his or her assets to the costs of his or her care.

The Irrevocable Medicaid Asset Protection Trust (“MAPT”) is the most commonly used Medicaid Planning tool. While MAPTs are extremely complex, their primary function is to allow clients to transfer assets to the MAPTs, thereby starting the 5-year look-back clock for assets transferred. If nursing home care Medicaid is planned, an applicant must provide the local Department of Social Services, which is the government agency in charge of administering the Medicaid program in Florida, with 5 years of asset statements.

This disclosure and review are known as the “5-year lookback period.” If assets were gifted within the last five years, the client will no longer be eligible for nursing home Medicaid- that comes at a high financial cost. If, on the other hand, assets have been transferred more than 5 years before the time Medicaid is planned, these transfers do not appear in the 5-year look-back period and are thus not considered when applying for nursing home Medicaid. The beauty of the MAPT is that these Trusts are custom-drafted to give the client some control over the assets in the MAPT while still starting the 5-year look-back clock.

It is important to note that MAPTs are irrevocable, so assets transferred into the Trust cannot be transferred back to the client. It is therefore critical to include as much client control and flexibility as possible when creating these Trusts, while also ensuring the client retains sufficient assets outside the Trust to provide for themselves. As a result, working with clients’ investment and tax professionals should be standard practice when creating and funding MAPTs.

What Happens If Your Loved One Runs Out Of Money In A Nursing Home?

If a person runs out of money, they should be eligible for Medicaid at that point. Between Medicaid and Social Security, you should be able to cover the nursing home costs. Unfortunately, this may imply that the individual has no other sources of income. As long as Medicaid is paying, a nursing home cannot legally kick someone out.

An initial consultation is your best next step for more information towards Lee Law Firm in Florida. Call us today for the information and legal answers you seek.