Episode 1: Must I Spend All of My Assets in Order to Get Medicaid?
Are you or a loved one facing an immediate need for nursing home care — or already in a nursing home — and worried that you have too much money or too much income to qualify for Medicaid?
You may have been told that you must spend nearly everything before Medicaid can help pay for nursing home care.
None of this is true.
I have just published Episode 1 of my new video series, Medicaid Planning Masterclass.
As a Certified Elder Law Attorney and the author of four national best-selling books in the field of Elder Law, I have spent much of my career helping families understand how to protect assets while obtaining necessary long-term care.
Episode 1 answers the question families ask me more than any other:
Must I spend down all of my assets to qualify for Medicaid? The answer is NO.
CLICK HERE TO WATCH MEDICAID PLANNING MASTERCLASS EPISODE 1 WITH EVAN FARR, CERTIFIED ELDER LAW ATTORNEY
This Episode Focuses on Crisis Medicaid Planning
This episode focuses specifically on CRISIS MEDICAID PLANNING: planning when nursing home care is needed now or will be needed soon.
This is different from advance Medicaid Planning, which should ideally begin at least five years before care is needed. Crisis planning begins when someone is about to enter a nursing home or is already receiving nursing home care.
Even during such a crisis, it is always possible to protect assets while establishing Medicaid eligibility. Families should never assume that it is too late to plan or that everything must be spent on nursing home care.
Medicare and Medicaid Are Not the Same
One of the most dangerous sources of confusion is the difference between Medicare and Medicaid.
Medicare does NOT pay for long-term custodial care. Medicaid is the government program that pays for long-term nursing home care level care (in a nursing home or at home, or sometime in an assisted living facility) for an eligible applicant.
Medicaid eligibility has two separate components: medical eligibility and financial eligibility. An applicant must satisfy both.
Financial eligibility involves far more than looking at the total amount of money a person owns. Medicaid distinguishes between countable and excluded assets. It also applies different rules depending on the applicant’s marital status, income, asset ownership, previous transfers, and state of residence.
What You Will Learn in Episode 1
In this episode, you’ll learn:
- The critical difference between Medicare and Medicaid
- That Medicare does NOT pay for long-term custodial care
- The two separate parts of Medicaid eligibility
- The difference between countable and excluded assets
- Why owning substantial assets does not automatically prevent Medicaid eligibility
- Why having significant income does not automatically prevent Medicaid eligibility
- How asset-protection strategies, also known as “smart spend-down” strategies, can convert countable assets into excluded assets and excluded income
- Why the rules are dramatically different for married and unmarried applicants
- How married couples can protect all of their assets
- How an unmarried applicant can still protect 40 to 70 percent of their assets
- Why transfers, timing, taxes, and the five-year look-back must be considered before taking action
- Why families should never give away assets or make major financial decisions without qualified legal advice
Smart Spend-Down Does Not Mean Spending Everything
A smart Medicaid spend-down should never be about simply emptying your bank accounts by paying for care.
A properly designed asset protection plan allows a family to protect assets by converting countable assets into excluded assets and excluded income.
It also allows the family to pay legitimate expenses, improve the applicant’s quality of life, protect the spouse who remains at home, and preserve resources that would otherwise be unnecessarily lost to nursing home expenses.
The correct strategy depends on what the applicant owns, how every asset is titled, whether the applicant is married, the applicant’s income, the state in which the applicant resides, and how soon Medicaid eligibility is needed.
There is no single Medicaid strategy that works for everyone.
Married and Unmarried Applicants Need Different Strategies
The Medicaid rules for married applicants are dramatically different from the rules for unmarried applicants.
When one spouse needs nursing home care, married couples can protect all of their assets through properly designed crisis Medicaid Planning. A married couple should never accept that the spouse remaining at home must spend nearly everything before Medicaid will help pay for the other spouse’s nursing home care.
An unmarried applicant has fewer options, but that does not mean all assets must be lost. An unmarried applicant can still protect 40 to 70 percent and sometimes 100 percent of their assets while becoming eligible for Medicaid.
These strategies must be implemented correctly. The wrong transfer, the wrong sequence of transactions, or the wrong timing can cause Medicaid disqualification, a penalty period, unnecessary taxes, or other serious financial consequences.
Do Not Transfer or Spend Assets Before Getting Advice
Medicaid Planning is highly technical and differs from state to state. A strategy that works for one person may create disqualification, penalties, unnecessary taxes, or other serious problems for someone else.
If your family is facing an immediate nursing home crisis, do not give away assets, change ownership, purchase an annuity, liquidate investments, sell the home, or begin an unplanned spend-down until you understand all available options.
Once assets have been transferred or money has been spent incorrectly, the damage may be difficult — or impossible — to reverse.
Watch Episode 1 before taking action.
CLICK HERE TO WATCH MEDICAID PLANNING MASTERCLASS EPISODE 1 WITH EVAN FARR, CERTIFIED ELDER LAW ATTORNEY
Medicaid Planning Is the Opposite of “Spending Down” All Your Money
For someone who needs long-term care, Medicaid Planning can involve:
• Protecting a lifetime of savings from long-term care expenses
• Determining the correct Medicaid eligibility pathway
• Qualifying for nursing home Medicaid
• Qualifying for Medicaid home care
• Navigating HCBS waiver rules
• Establishing medical and functional eligibility
• Documenting asset transfers
• Correcting Medicaid eligibility errors
• Appealing adverse Medicaid decisions
• Ensuring that eligibility actually results in access to needed care
The Farr Law Firm focuses extensively on Crisis Medicaid Planning and Asset Protection, aka Life Care Planning, for families throughout Virginia, Maryland, and Washington, DC.
For families who have time to plan before a long-term care crisis, a properly designed Living Trust Plus® Medicaid Asset Protection Trust can also be an important component of long-term care asset protection planning.
If you or a family member needs nursing home care, Medicaid-funded home care, or advance planning to protect assets from the catastrophic expenses of long-term care, contact the Farr Law Firm.
