Planning Ahead for Long-Term Care Medicaid to Maximize Your Assets
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Under current law, in order to qualify financially for long-term care Medicaid benefits, a single individual’s countable assets must not exceed $2,000; a married individual applying for Medicaid must also have $2,000 or less in countable assets, and his or her spouse, who does not require Medicaid, may keep up to $117,240 in countable assets. A common misconception about Medicaid is that this means you must spend almost all of your money on your care before applying for long-term care Medicaid.
What many individuals fail to realize is that with proper planning, it is not necessary that you wait until you are completely impoverished before thinking about Medicaid. Current Medicaid rules and regulations permit you to pay off your debts, improve or modify your home, and purchase an irrevocable pre-paid burial contract and some types of savings bonds prior to applying, without jeopardizing your eligibility. For example, a married couple with $200,000 in liquid assets (not including the home) need not wait until they have just $119,240 remaining before considering long-term care Medicaid for one of the spouses. With careful planning, they may be able to convert much of their excess funds into non-countable assets and qualify for Medicaid much sooner. They may, as a result, have their funerals completely paid for and savings bonds in each of their names, which they may later redeem if they have a need for those funds. A couple with even greater liquid assets may protect a significant amount more if they begin Medicaid planning much earlier; a transfer of excess assets to an irrevocable income-only trust, for example, may assist one or both of the spouses in qualifying for Medicaid once the 5-year lookback period has expired.
There are, of course, pitfalls that should be avoided with this type of planning, and it is easy to get confused about the rules. In addition, although there is plenty of good information available for individuals seeking to apply for Medicaid, there is also some misinformation. Be wary of plans that involve naming a child as a joint owner of a piece of real property or a bank account, for example. Although many individuals believe that naming a joint owner will protect an asset from Medicaid, under the current rules and regulations, depending on the titling of the asset, the individual applying for Medicaid may be considered to own 100% of that asset, or may be considered to have gifted one half of the value of that asset.
Because the long-term care Medicaid rules and regulations are strict, it is extremely important that your planning be completed with the assistance of an experienced elder law attorney. No two individuals or couples are the same, so it is also important to seek advice that is tailored to your situation. For professional assistance in planning for long-term care Medicaid, contact the Hook Law Center today.
Hook Law Center: Kit Kat, what can you tell us about soldiers in the Middle East and the dogs they acquired there?
Kit Kat: Well, this is a fabulous story! We owe it all to a British soldier named Pen Farthing who fought in Afghanistan. He was honored recently on Dec. 7, 2014 as a CNN Heroe. It happened like this. Pen was a sergeant in the Royal Marines stationed in Afghanistan. In 2006, while on patrol, he and some of his fellow soldiers broke up a dog fight. There are a lot of stray animals there–both dogs and cats. One of the dogs followed him back to the base. The two became fast friends. Pen named him Nowzad, after the town where he was found. Nowzad was a tremendous morale booster for the whole company. Pen was able to arrange for Nowzad to go back to Britain with him after his tour was finished, but it was a difficult process. That’s when he got the idea to organize “Nowzad Dogs.” It’s an organization that reunites soldiers with their pets–both dogs and cats. So far, the organization has reunited almost 700 animals with soldiers from eight countries.
It’s not an easy process to bring the Afghani animals to their soldiers who have returned home to various countries in the West. They have to be quarantined for 2-3 months, get all their shots, etc. before being cleared to leave. So the Nowzad Dogs organization sponsors a shelter and clinic in Kabul where they can stay until the process is completed. The clinic also neuters other strays that happen their way which helps to reduce the number of strays locally. It is the only official animal shelter in Afghanistan, so it is providing a valuable service for the residents of the area, too. Nowzad lived with Pen for six years, but he is now deceased. The connection between the two inspired this wonderful project. If you are interested in helping Nowzad Dogs, you can visit their website at www.nowzad.org. (http://www.cnn.com/2014/08/14/world/asia/cnnheroes-farthing/index.html?hpt=hp_c2)
- December 10, 2014 – Andrew Hook will be a co-presenter at a webinar, sponsored by The ARC, on the topic, First Steps in Future Planning: Letters of Intent and Financial Planning from 2:00 pm – 3:00 pm Eastern. Mr. Hook will be presenting with Hye Kyong Jeong, the Director of Outreach and Advocacy at The Arc of King County, Washington. Registration is free. Click here, then click the blue “registration” link to save your “seat!”
- January 22, 2015 – Andrew Hook will be speaking to the Portsmouth Community Criminal Justice Board regarding how the aging population may affect the court system.
- January 29 – 31, 2015 – Andrew Hook will attend the NAELA Summit in Newport Beach, California.
- February 3, 2015 – Andrew Hook will be speaking at King’s Grant House regarding Long-term Care Insurance.
- February 7, 2015 – Shannon Laymon-Pecoraro will be speaking to the Down Syndrome Association of Hampton Roads’ Baby Play Group.
- February 20-21, 2015 – Andrew Hook will be speaking on Managing a Small Law Firm at the 2015 VAELA UnProgram in Charlottesville, VA.
The Hook Law Center, a leader in the field of Elder Law, serving Hampton Roads, is seeking an experienced Elder Law attorney. The firm has an AV Martindale rating, offices in both Virginia Beach and Suffolk, and attorneys who have held leadership positions in the National Academy of Elder Law Attorneys, the Special Needs Alliance, and the Virginia Bar Association. The ideal candidate will have expertise in public benefits,guardianship, special needs planning, estate planning, taxation, and trust & estate administration. The candidate must also have excellent writing, research, and communication skills. Our goal is to attract an attorney who will work collaboratively with our experienced staff, provide consistent, high-quality client service, strive to improve his or her skills and seek relevant certifications, and is motivated to continue the success of our firm. Membership in the National Academy of Elder Law Attorneys or certification in Elder Law or Financial Planning is desirable. Please send resume and references to Sandra Buhr, Office Administrator, at firstname.lastname@example.org.
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