Myths about Public Benefits
By Letha Sgritta McDowell, CELA CAP
- “They are going to take my house.” False! While I am never exactly sure who “they” is, no person or entity takes away a home or other property for that matter. This includes the Medicaid agency, nursing facility or assisted living facility, social services, etc. However, some planning in advance may be prudent in order to achieve the goal of avoiding “estate recovery.” Estate recovery is the process by which the state Medicaid agency recovers from an individual’s assets after their death. With proper planning, this result is often avoidable.
- “My income is too high to qualify.” False! Different public benefits programs have different eligibility requirements. One of the most confusing is the benefit known as “Medicaid.” While we tend to use it as a blanket term, there are a number of different programs which fall under the Medicaid umbrella. Each program has different eligibility requirements so, while your income may be too high to qualify for one program, you may be well within the guidelines for another. The Medicaid program that pays for nursing care and the Special Pension Benefit commonly referred to as “Aid & Attendance” typically only require that the applicant’s monthly income is less than the cost of their care.
- “I must have practically no assets to qualify.” False! While many public benefits programs require countable assets to fall within certain limits, there is no limit on the amount of non-countable assets a person can have. Proper planning allows the conversion of countable assets into non-countable ones and allows the applicant and/or his or her spouse to protect assets and still qualify for benefits.
- “I have to give everything away in order to qualify for benefits.” False! In many cases, giving assets away causes penalties which could have been avoided with proper planning. And, when you give assets away to children or other family members, you have lost your ability to control them and potentially subject them to creditor claims or divorce actions which you may never have seen coming.
- “I have to do planning at least five (5) years before needing care.” False! Many asset protection strategies can be implemented at the time you need care. However, it is critical to have the proper tools in place to allow an agent to assist you in asset protection planning should you need care in the future.
- “A Revocable Trust protects my assets.” False! While revocable trusts can be a power estate planning tool, a revocable trust does not protect your assets from the claims of creditors or the cost of nursing care. However, there are other types of trusts which can be used to protect assets.
- “Adding my children’s names to the deed to my house will protect my home.” False! Adding a child’s name to any asset, including a home, can cause a period of ineligibility for public benefits. In addition, adding them as an owner of an account makes the account “their” money in the eyes of the law. This means it could be subject to the claims of their creditors or other financial problems. In addition, this may cause the accidental disinheritance of a child or other family members. AND, in many cases, the home is an exempt asset anyway.
Whether you are considering your long-term care plan early or are facing an immediate nursing care need, it is never too late to plan to protect assets. Don’t let these common “myths” about asset protection planning prevent you from taking action or influence you to make decisions which may have possibly devastating consequences.
Ask Kit Kat – Pet Investigaors
Hook Law Center: Kit Kat, what can you tell us about the Humane Society’s undercover investigators?
Kit Kat: Well, these brave people perform a humanitarian service which makes a huge difference in the lives of animals. They investigate abuse, and they have to go undercover using fake names and identities to protect themselves. One such investigator is named Amy Winter (her alias). Her current assignment is working at a pet shop in New York City, where she investigates the sale of sick puppies from the Midwest. Though only 26, she is on her last assignment. This kind of work takes a toll. She has been travelling around the country staying for a few months at a time in a particular location investigating animal abuse. She cannot use social media, and must not get too close to her co-workers. Later this year, she will enter a police academy to train as an animal protection officer. Her five-year stint is longer than most investigators who last only 2-3 years. She has investigated 2 industrial pig farms, a calf ranch, a tiger facility, a horse stable, and 3 research laboratories. She says, ‘For all the cases of mine, I felt I made some impact on the animals, which means the world to me.’
In her current assignment at the pet store, she hears customers ask repeatedly, “Are these puppies from puppy mills?” The staff are instructed to say definitely not. So, she goes about her business of secretly recording what is going on at this particular store. She hope her information will be enough to shut down this particular store. She says, ‘A lot of very sick puppies are being sold. I think a lot of people are going to be shocked.’
Another undercover agent named Cody investigated an egg factory farm in Iowa. What he witnessed there was so horrifying that he lost weight and was having nightmares. After that final assignment, he decided to study law and help animals through the legal channel.
We owe these investigators a tremendous debt. They are helping society monitor the management of animals. When things are not done in an appropriate way, the investigators are there to call attention to the matter, and to hopefully, make corrective action happen. (Julie Falconer, “True Grit,” All Animals, September/October 2017, p. 24-28)
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