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Mar 21

Medicaid for Millionaires?

protecting-assets-avs-lawMedicaid for Millionaires?

Can a millionaire qualify for nursing home Medicaid? Part of the practice of Medicaid planning is to position a client in such a way that the client will financially qualify for Medicaid. At first blush, a client with a large net worth would not meet the financial criteria for Medicaid. But can the client make changes in their financial position in order to qualify for Medicaid? One of the questions the Medicaid application asks is “Have you given away any assets in order to qualify for Medicaid?” And so if your sole reason for transferring assets is to qualify for Medicaid, such transfers would disqualify you from Medicaid. However, there are a multitude of reasons to transfer assets: insuring that your spouse can continue to live the lifestyle that they are accustomed to, making a comprehensive plan for the distribution of your estate at the time of your death, and insuring that your children will be taken care of at the time of your death are just a few reasons for planning your estate, and perhaps the added benefit of placing you or your spouse in a position to qualify for Medicaid.

The two main concerns in Medicaid planning are the “look back period” and the “penalty period”. The look back period is simply the requirement to provide 60 months (five years) worth of financial information to the Medicaid office together with your application. The nature of the transaction is what will determine how it is treated by the Medicaid office.

Suppose one spouse is ailing and needs chronic care such as nursing home care. The ailing spouse can transfer all of his/her assets to the healthy spouse without creating any kind of penalty. Then the healthy spouse can invoke what is known as a “spousal refusal.” Once the Medicaid office receives a spousal refusal, they are required to consider the ailing spouses application using his/her assets alone.

Recently, I worked with a couple that had approximately $750,000 of assets. The wife had become immobile and was not able to get around on her own. She could no longer live at home and required 24 hour supervision; she had no choice but to be admitted to the nursing home. Many of those assets were held jointly. The wife transferred the assets to her husband, retaining only about $14,000 in her own name (the maximum assets an individual can hold as of this writing is $14,850). The couple were required to provide all of their financial information for the last five years, so it was obvious that these assets were held jointly until just prior to the application. The husband included his notice of spousal refusal with the paper work. The Medicaid office was required to consider her application using her assets only, and her Medicaid case was approved on that basis. The same technique can be used for $1M, $2M, or even $10M net worth’s theoretically (there are other considerations that high net worth individuals may have to not choose this technique).

This is just one of many planning techniques that can be utilized to allow you to plan for your estate and the potential or reality of long term care. Everyone has their own unique circumstances and therefore their own unique opportunities to plan and protect their assets.   If you have additional questions about Medicare or Long-term care Planning and live in the state of New York, don’t wait to get good advice.  Initial consultations are FREE. CONTACT US ONLINE or call our office at 1-800-471-4730.

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