Life Care Planning and Medicaid Asset Protection

Medicaid Long-term Care is not Welfare

The Medicaid long-term care program is not a welfare program; it is an entitlement program. Medicaid was created under Title 19 of the Social Security Act and is intended to pay for your nursing home care (and sometimes in-home care). In every state, Medicaid is a means-tested program, which means that there is an asset limit you have to meet in order to qualify. However, there are dozens of legal and ethical strategies that our firm can use to rearrange your assets in order to protect them while still meeting the strict guidelines and qualifying for Medicaid benefits.

Life Care Planning and Medicaid Asset Protection is the process of rearranging/protecting assets from having to be simply “spent down” in connection with nursing home care or in-home care, while also helping ensure that you or your loved one gets the best possible care and maintains the highest possible quality of life, whether at home, in an assisted living facility, or in a nursing home.

This process is called Life Care Planning because it is often an ongoing, lifelong process. Although the initial Asset Protection Planning may take as little as a few weeks or a few months, the services that we provide are often provided until death.

Please click below to watch a 2-hour webinar on Medicaid Asset Protection along with how it fits into all of our Four Levels of Planning. Skip to the Chapter on Level 4 Planning if that’s all you’re interested in.

Please note that we no longer offer the free consultation mentioned in this webinar.

When Should You Start Medicaid Planning?

Life Care Planning and Medicaid Asset Protection can be started any time after a person enters the “long-term care continuum,” meaning that a person is starting to need assistance with Activities of Daily Living (eating, dressing, bathing, toileting, transferring, and walking) or Instrumental Activities of Daily Living (such as cooking,  cleaning, caring for pets, paying bills, and managing finances).

This type of planning can be started while you are still able to make legal and financial decisions or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney, even if you are already in a nursing home or receiving other long-term care assistance. In fact, the majority of our Life Care Planning and Medicaid Asset Protection clients come to us when nursing home care is already in place or is imminent.

If you are still healthy and not yet on the “long-term care continuum,” then instead of Life Care Planning and Medicaid Asset Protection Planning, you should consider our Living Trust Plus® Medicaid Asset Protection Trust, which is a simpler and less expensive method of asset protection for clients who will most likely not need any long-term care for at least five years.

What Are the Objectives of Medicaid Planning?

With proper planning, families can obtain Medicaid assistance without having to deplete their life savings. When many people hear the term “asset protection,” they immediately jump to the conclusion that it’s about protecting an inheritance. This is sometimes desired, but very often not even a partial reason for asset protection. What are the main reasons for doing Medicaid Asset Protection:

– Protecting The Spouse

With proper planning, a  spouse who is able to stay at home can keep all of the couple’s assets and much or all income while Medicaid pays for the nursing home. The most important goal is typically to ensure that the spouse remaining at home is able to live the remaining years of his or her life with utmost dignity and not have to suffer a drastic reduction in his or her standard of living.

– Protecting Quality of Life

If you are a single or widowed client, the most important reason for you to engage in asset protection planning is for you to be able to enjoy the highest quality of life possible in the event you are forced to enter a nursing home.

For instance, money that we protect for you in the process of getting you qualified for Medicaid can be used, once you are receiving Medicaid benefits, to provide you with an enhanced level of care and a better quality of life while you are in a nursing home. For example, families of our clients can use the protected assets to pay for lost or broken hearing aids, dentures, eyeglasses, and electronic equipment; pay for a cell phone bill; replace outdated or soiled clothing; pay for streaming media services; hire a private “sitter” or “helper” – someone to keep you company, help you with meals, etc., somewhat like a “surrogate daughter.”

Money that we protect for you in the process of getting you qualified for Medicaid can also be used to purchase services or items for you that are not covered by Medicaid, such as some dental work, incontinence supplies, personal clothing, toiletries, nail trims, and haircuts.

– Protecting Children

Some parents have saved and sacrificed their entire lives and have a strong desire to leave a financial legacy for their children. With proper planning, this goal can be achieved while still qualifying for Medicaid.

– Protecting Disabled Persons

There are asset protection strategies that will allow you to protect certain assets for the benefit of a disabled child and sometimes for other disabled family members.

What Happens at the Initial Consultation?

During the initial consultation we will typically:

  • Assist you in identifying your goals and objectives;
  • Review the strategies that are available to help you achieve these goals; and
  • Explain how we can help you achieve your goals by preparing a specially designed Asset Protection Plan tailored to your assets and your goals and objectives.

After the Initial Consultation

After the initial meeting, we will spend a great deal of time analyzing your situation, applying our specialized knowledge and experience, and performing the dozens of calculations necessary to come up with the best asset protection strategies for your situation. These strategies are customized to achieve your specific goals on the basis of your income, assets, expenses, and medical condition.

All of this information is then put into a written Life Care Plan / Asset Protection Plan, which will set out all of the strategies in detail, along with any options and alternatives that need your consideration. After your review, you will meet again with our team to go through and finalize the plan so that it can then be implemented.

What Is a Life Care Plan / Asset Protection Plan?

The Life Care Plan / Asset Protection Plan is broken down into a number of sections:

– Background
In this section, we confirm what you’ve told us about your health, income, assets, and expenses. This is important because the entire plan is based on this information. If your information is different, the plan will be different. We want to be sure that we understand your situation completely.

– Objectives
Why do we do asset protection planning? As mentioned above, most of our clients are interested in protecting their assets:

(a) for themselves, to be able to enjoy the highest quality of life possible within the confines of a nursing home;
(b) for their spouse, if married, who will be remaining in the community; and
(c) possibly for the benefit of their children.

Some people also have specific goals relating to disabled beneficiaries or related to their home or to federal and state income taxes, or federal and estate gift taxes. Every plan must be customized to achieve your specific goals on the basis of your specific income, assets, expenses, and health conditions.

– Applicable Law
We discuss the Medicaid law, tax law, and, where appropriate, the laws relating to Veterans Aid and Attendance.

– Strategy
There are dozens of different strategies that can be employed to protect assets. We walk you through each of these strategies that apply to your situation and discuss them with you to determine which ones appeal to you and would work for you and which ones are inappropriate. Whenever possible, we compare strategies and give alternatives.

– Assumptions
Our clients are often unable to give us all of the information that we would need to make a perfect plan. For example, many people do not know:

  • Exactly when they will enter a nursing home.
  • Which nursing home will be used.
  • How much will it cost.
  • When and how often the nursing home will raise its rates.
  • How much will be covered by Medicare.
  • How much private pay money may be required by the nursing home as a condition of admission.

The plan is based on assumptions and is usually very accurate. However, as these variables become known, the plan is revised from time to time. In addition, the law changes frequently and the plan may need to be revised periodically to be sure that it complies with current law.

– Additional Considerations
This section is an attempt to answer the common questions which people have and avoid the ordinary pitfalls.

– Action Plan
This is a summary of the exact steps that need to be taken to implement the plan.

– Implementation
Our office assists you to the extent possible in seeing that this is done. For example:

  • If real estate needs to be transferred to a spouse or child, our office will prepare the deed and record it for you.
  • If you need to deal with financial institutions or insurance companies, our office will obtain all the necessary forms for your signature.
  • If the plan calls for the purchase of an annuity, our office will assist you in dealing with the insurance company to be sure that a policy is furnished that will meet the ever-changing Medicaid requirements.
  • Filing the Medicaid Application: The final phase of the process for the Medicaid long-term care assistance. Every item on the application must be documented and explained. We will do everything needed to prepare and file the application for you, and we will also be the ones to answer questions that the Department of Social Services may have about the application.

Our general rule is that if you can do it or we can do it, we will do it for you. We have people who do this every day, and it is easier for them to do it than it is for you to do it. Public benefits planning is extremely complex.

Even our finest judges are often baffled — click here to see what the top judges in our land say about Medicaid. Our job is to guide you through the Medicaid maze so that you can protect the maximum amount of assets with the least amount of effort on your part.

How Much Can You Protect?

This varies from client to client, but as a general rule, for a married couple we can generally protect all of your assets. For an unmarried client, we can typically protect anywhere from forty percent to seventy percent of your assets, though sometimes we can protect all of your assets, depending on the specifics of your situation.

Remember that we are talking here about asset protection planning at or near the time that the long-term care will be needed — most often when nursing home care is already in place or is imminent.

Many people have heard that you must do Asset Protection planning three or five years prior to entering a nursing home. This is simply not true. There is a Medicaid rule known as the “look-back period,” which is currently five years. However, this does not mean you have to do all planning five years prior to going into the nursing home; rather, it means there are consequences, and sometimes penalties, in the form of periods of ineligibility for Medicaid, for certain types of planning done within five years prior to applying for Medicaid.

We are of course fully cognizant of these rules and penalties and all other Medicaid requirements and are very careful to comply completely with the law. Having to deal with the five-year look-back period is why we are typically able to protect only forty to seventy percent of your assets for unmarried clients.

Remember, if you are still healthy and not yet on the “long-term care continuum,” then instead of Life Care Planning and Medicaid Asset Protection Planning, you should consider our Living Trust Plus® Asset Protection Trust, which is a simpler and less expensive method of asset protection for clients who will most likely not need any long-term care for at least five years.

What to Bring to Your Initial Meeting

At the initial interview, or sometimes the second interview, which usually lasts one to two hours, we will need to review several types of personal information concerning your estate. Please bring the following documents with you to your initial meeting:

  • Intake form, which we will send you with our initial letter confirming your appointment. Please fill this in as best as you can. If you find it overwhelming, bring us the statements, and we will be happy to fill them in with you. The more information you give us, the better the plan we will be able to give you.
  • All bank statements, statements from brokerage firms, mutual funds, etc. All of this is important to help us protect those assets for you.
  • Current addresses of your children and those persons whom you would want to be your health care representatives or your agent under your Power of Attorney. Current addresses with ZIP codes are very helpful.
  • Copies of your existing documents — your Wills, Living Trusts, Living Wills, Powers of Attorney, etc. We will review these for you. If they are adequate, we will leave them alone, but there is a good chance they will need to be modified.
  • It is important that all of the family “decision-makers” be present at the initial meeting so that everyone’s questions can be answered directly by Mr. Farr and so that the work can begin immediately. If you would like to bring additional family members with you to the appointment, you are welcome to do so, but this is not required.

Our Goals

Our goal in serving you is to give you not only the best legal advice but also excellent client service. We try very hard never to keep you waiting. We try to return our phone calls promptly and work as a team so that there is always someone available to help you when you need it.

We strive very hard to deliver consistently high-quality service to you.

All of the people who work in our office are committed to this goal. They are all caring people, and they understand the problems you are facing. This is critical to us in the attorney-client relationship.

We can help you achieve your goals. We are able to help almost everyone who comes into our office. Please give us the opportunity to assist you and the information that we need to do a good job.

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