Medicaid Planning
As you plan for the future, it’s important to consider the potential costs of nursing home care and how Medicaid assistance may be able to help. Did you know that the average lifespan for Americans is 79 years? Without proper planning, many people find themselves without the financial means to cover the cost of nursing home care from the time of admission until their passing. Don’t let this happen to you – start thinking about these factors now.
Medicaid vs Medicare
Medicaid and Medicare are two government-funded healthcare programs, but they serve different populations and have different eligibility requirements. Medicaid is a state-administered program that is intended for individuals with low incomes, while Medicare is available to those who are 65 years or older or those who are severely disabled, regardless of their income. It’s important to understand the differences between these two programs in order to determine which one is right for you.
Eligibility for Medicaid in Texas
Qualifying for Medicaid involves meeting both an income test and an asset test. These requirements can vary based on factors such as your marital status, the medical needs of you and your spouse, the types of assets you have, and the state in which you live.
Contrary to popular belief, Medicaid eligibility is not always limited to those with very low assets and income. In fact, certain assets, such as your primary residence, are not taken into account when determining Medicaid eligibility.
Penalties for Gifts and Transfers of Assets
Under current Medicaid rules, certain financial transfers made within five years of the date of application may delay the start of benefits. The length of any penalty is calculated by dividing the value of the transferred assets by a state-determined factor, which changes annually. While there are exceptions to this general rule, it’s important to be aware of the potential consequences of transferring assets as part of your Medicaid planning. Gifting can be a useful tool in protecting your assets, but it’s important to seek advice from a professional before making any transfers. Without proper guidance, gifting can actually jeopardize your eligibility for Medicaid.
Cost of Long-Term Care
Nursing home poverty is a concern for many people, but with proper planning, it can be avoided. In Texas, the average cost of a nursing home stay is $6,000 per month, which can be a significant burden for individuals and families. However, Medicaid may be able to help cover these costs. Our team can assist you in applying for Medicaid, so you can focus on your recovery and quality of life, rather than worrying about financial stress.
Loss of Homestead After Death
If you or a loved one received financial assistance from Medicaid for a nursing home stay, the government may be entitled to recover the value of those benefits through the Medicaid Estate Recovery Program (MERP). This could potentially involve the recovery of the person’s home after their death. However, with the help of an experienced estate planning attorney who understands the Medicaid system, it may be possible to take steps to protect your home and prevent it from being claimed by the government through MERP. Don’t let the possibility of MERP recovery discourage you from seeking Medicaid assistance – instead, work with a professional to create a plan that ensures you have the support you need while also protecting your assets
FAQs
When do I need to see an attorney for Medicaid Planning?
Estate planning for long-term care is often done during retirement or in the years leading up to retirement. It’s important to start this planning process before you anticipate needing to enter a nursing home or assisted living facility, as Medicaid has a “lookback” period of 60 months, during which it will review financial transactions made in the five years prior to your application for Medicaid. This does not mean that you have to wait five years after creating a trust to qualify for Medicaid – even if your health has recently declined or you have received a serious diagnosis, there may still be options available to you. At our firm, we will help you understand your options and develop a plan that meets your needs. Don’t rule out effective planning – contact us to learn more.
How can an Attorney Help Me Qualify for Adult Medicaid?
Navigating the Medicaid application process can be overwhelming, especially in the midst of a medical emergency that requires nursing home care or inpatient treatment. Working with an attorney who is familiar with Medicaid eligibility can be a great help in understanding the complex rules and requirements of the program. An experienced attorney can also advise you on how to proceed in cases where you need to enter a nursing home unexpectedly.
How Soon Should I Plan for A Nursing Home Stay?
If you are facing a long-term care decision, it’s important to act quickly in order to protect your assets. In order to safeguard all of your assets, you should begin the planning process at least five years prior to applying for adult Medicaid. If you need to transition to a nursing home sooner than five years from now, our team at Tyler & Maderer can also help you create an emergency nursing home plan. While an emergency plan may not be able to protect all of your assets, we can work with you to preserve a significant portion of your wealth. Don’t delay – the sooner you start planning, the more options you will have available to you.
What is a Miller Trust/How do I get a miller trust?
If you have a higher income than Medicaid’s low-income limits, you may still be able to qualify for Medicaid assistance through the use of a Miller Trust, also known as a Qualified Income Trust (QIT). A Miller Trust is a legal mechanism that allows you to qualify for Medicaid while still ensuring that you receive high-quality care. For example, if you have a pension or high social security benefits that would normally disqualify you from Medicaid, a Miller Trust can help you meet the income requirements and ensure that you are placed in a quality nursing home or assisted living facility. Don’t let your income stand in the way of getting the care you need – a Miller Trust may be the solution you’re looking for.
Applying for Medicaid can be tedious and most people in Texas are denied due to having the lowest income thresholds in the United State. Tyler and Maderer can help navigate through the lengthy application process and advise you on planning for your future.
What is Medicaid planning?
Medicaid planning is a form of asset protection planning focused on ensuring the maximum possible preservation of your assets when you or a loved one needs nursing home care.
What is a Qualified Income Trust?
The Qualified Income Trust (QIT), also known as a Miller trust is a useful tool to solve difficult circumstances created by Texas Medicaid laws. Texas Medicaid rules place an income cap on applicants. This income cap, while periodically adjusted for inflation, is not large enough to cover the average cost of a nursing home in Texas. As a result, many people have too much income to qualify for Medicaid coverage but have nowhere near the assets to pay for nursing home care on their own. The solution to this problem is the QIT.
The QIT legally funnels income that would otherwise have disqualified a Medicaid applicant. The income running through the trust is not counted against the Medicaid income limitation.
What is a ladybird deed?
Texas is one of a few states that offer deeds that transfer ownership interests in real estate upon the death of the owners.
From a Medicaid perspective in Texas, after the death of a Medicaid recipient, the state may seek to recover funds it used to pay for the recipient’s care. The state’s Medicaid recovery efforts are limited to the recipient’s probate estate. Ladybird Deeds transfer ownership at death, so any real estate conveyed by this deed isn’t part of the Medicaid recipient’s probate estate and is not subject to recovery by Medicaid.