Despite the many restrictions created by the Deficit Reduction Act and state laws, elder law attorneys are still able to assist individuals in developing estate plans to protect their assets if they become ill or require long term care. For those already in a nursing home, elder law attorneys can help them qualify for Medicaid and keep as much money as possible despite harsh rules and restrictions. Below are a few examples of successful Medicaid planning:
1. Frank’s wife Betty had entered a nursing home which was costing the couple over $7,500 a month. Not including their home, their assets were about $100,000. Frank was told that he could keep the home and once he spent down his assets to approximately $50,000, Betty would qualify for Medicaid benefits.
Instead of spending down his assets, Frank could set up a “spousal annuity trust” and transfer $50,000 into the trust. After setting up the trust, Betty was approved for Medicaid benefits, saving Frank $50,000 that would have otherwise been spent down.
2. Patty had been providing care for her mother, Alice, for a few years when the doctor told Patty that it was no longer safe for Alice to remain at home and that she would require nursing home care. Patty had been living in her mother’s home to provide care and was concerned that they would have to sell the house. However, because Patty had been the caretaker, gifting the home to Patty would not result in a Medicaid penalty as long as proper proof is provided – including a doctor’s statement.
Medicaid Planning is very fact-specific and varies in each situation. In both examples above, without the knowledge of an experienced elder law attorney financial hardships would have occurred.