Pre-Planning To Protect From Long-Term Care Costs:

"5-Year Planning" With Asset Protection Trusts

Revocable Living Trusts vs.
Irrevocable Asset Protection Living Trusts

When it comes down to brass tacks, the biggest difference between these two types of estate planning trusts is the fact that assets in a revocable living trust are not protected from a Medicaid spend-down for long term care, while assets in the properly crafted irrevocable asset protection trust are protected. Medicaid Estate Recovery liens can attach to assets in a revocable living trust, but not in the irrevocable asset protection trust.

So choosing the type of trust that is right for your family is very important.

The "Right" Type of Trust Can Protect Assets From Being Lost to Long Term Care

One of the biggest threats to your estate is the risk of a chronic long term care event destroying your estate at a rate of $7,000 to $9,000 per month or more. With the help of a Certified Elder Law Attorney, the right estate plan can be developed with the right type of asset protection trust that will protect you & your estate from this very real risk. 70% of all folks over 65 will need long term care in their lifetimes.

Without a plan, that's a high risk gamble to take with your family's future.

Scroll Down to Learn More About the Medicaid Rules In Our Crisis Planning Section

"Crisis" Planning: Asset Protection Planning & Medicaid Qualification When A Loved One Needs Care Now . . . And Has Not Planned Ahead:

It's Never Too Late To Plan, Regardless of What You Have Heard.

We Assist Families Who Have A Loved One Needing Care To Design & Implement Plans to Protect Assets & Qualify For Medicaid Without Losing the Farm - Literally.

And We Handle The Medicaid Qualification Process From Start To Finish.

The rules are complicated: Medicaid looks at your income, assets, property (both home & non-home property), savings, life insurance, retirement funds . . . all of your assets.

There are very different sets of rules that apply based on your marital status. Certain rules that apply to unmarried (widowed, divorced, never married) individuals, while others apply to married couples.

There are intricate rules that penalize the transfer of assets, and exceptions to those rules.

Additionally, there is the Medicaid Estate Recovery Lien Program to deal with.

Contact us immediately for a free consultation or submit your information for our Free Medicaid Asset Protection Analysis online. In most cases, we can protect between 50% to even 100% of all their assets & qualify for Medicaid with the implementation of an asset protection plan for you.

The difference between losing everything & protecting everything could be a free consultation to learn your options with a Board Certified Elder Law Attorney.

Income Rules for Medicaid | Qualified Income Trusts | Spousal Diversion:

Medicaid Income Rules:

How Does Medicaid Treat Income?

We Were Told That We Had too Much Income To Qualify For Medicaid?

What's a Qualified Income Trust?

Do We Get To Keep Any  Income?

Will I Have Enough Income To Live On If My Spouse Needs Medicaid?

The Medicaid Income Rules Are Complicated And Are Vastly Different Depending on Marital Status.

The Rules Applicable to Married Couples Greatly Differ From the Rules Applicable to the Unmarried or Widowed Individual.

Income Caps/Limits and Qualified Income Trusts:

Medicaid does have income limits, or caps, but we can easily get around these limits by utilizing a special trust called a Qualified Income Trust, sometimes called a "Miller Trust."

Never let anyone tell you that "You'll never qualify for Medicaid because your income is too high." Be sure to get sound legal advice in this arena.

Spousal Diversion of Income:

Unmarried/Widowed individuals owe most/all of their income towards their cost of care when on Medicaid, but for married couples the rules are VERY different.

The spouse at home gets to keep all of his/her income, and in most cases, gets to keep some or all of the income of the spouse in long-term care.

"Countable Asset" Limits & Exempt Asset Rules for Medicaid:

Medicaid Asset or "Resource" Limits:

Watch our short video right here to learn the answers to the following questions our clients ask:

I was told I have to spend down everything: what are the "asset limits" for Medicaid?

How many assets can a married couple have?

How many assets can a widowed or unmarried person have?

If our savings are spent on my spouse's care, how will I live?

What planning can I do to avoid spending down our assets? 

The Medicaid Asset or Resource Rules Are Complicated And Are Vastly Different Depending on Marital Status.

The Asset Lmits Applicable to Married Couples Greatly Differ From the Rules Applicable to the Unmarried or Widowed Individual.

We encourage you to watch the video above to learn more details about exempt vs. countable assets and Medicaid's limits.

Exempt Assets or Resources:

Certain assets are not countable for Medicaid Qualification purposes. These include:

• The Home-Place & any adjoining or adjacent property touching the home-place.
• One vehicle is exempt, while additional "extra" vehicles will count against you.
• Personal property, such as jewelry, china & silver, furniture & antiques, lawn mowers & golf carts, among other items.
• A $10,000 burial allowance, which includes pre-need burial contracts, life insurance, etc., designated for burial.
• Retirement accounts, such as IRAs, 401(k)s, etc., can be made exempt if we take certain actions with them, making them not countable for Medicaid.

Countable Assets or Resources:

All of these assets count against us for Medicaid qualification purposes:

• Checking
• Savings
• Money markets
• C.D.'s
• Stocks & Bonds
• Non-qualified brokerage accounts
• Non-qualified annuities
• Cash value of whole life or universal life insurance policies
• Non-home-place property
• Anything not on the list of Exempt Assets

Asset Limits: Married vs. Unmarried/Widowed Clients

The basic rule is that if a person is on Medicaid, they must have under $2,000 in countable assets. This is the individual resource limit, and the rule that applies if a person is unmarried or widowed.

But again, the Medicaid asset rules change greatly, for the better, if the person needing care is married.

A married couple gets the benefit of an additional marital allowance, called the Community Spouse Resource Allowance, or C.S.R.A., for short. The C.S.R.A. as of 2022 is $137,400, but increases each year a little, in the same way that Social Security goes up a little bit each year.

In summary, for a married couple, we get the benefit of both the $2,000 individual resource allowance, plus the current C.S.R.A. of $137,400, for a total married asset limit of $139,400 in 2022.

If your assets are over these limits, you really need to consider engaging a certified elder law attorney, to develop an asset protection & Medicaid qualification plan, if you want to avoid losing your family's assets that are over these limits, to a blind and painful spend-down.

Medicaid Transfer Penalties, Exceptions & the Five-Year Rule:

What's the Five-Year Rule for Medicaid?

At Application, Medicaid Will Penalize a Person for Having Transferred Money or Property in the Last Five Years:

Congress does not want you to move into a nursing home on Monday, give all your money to your children (or whomever) on Tuesday, and qualify for Medicaid on Wednesday.

So it has imposed a penalty on people who transfer assets without receiving fair value in return.

How Does the Medicaid Penalty Work & How is it Calculated?

The penalty period is determined by dividing the amount transferred by what Medicaid determines to be the average private pay cost of a nursing home in your state, currently $9,034.00 in Georgia. 

Here's an example:

If you live in Georgia where the average monthly cost of care has been determined to be $9,034.00, and you give away money or property worth $300,000.00, you will be ineligible for benefits for 33.2  months ($300,000 / $9,034 = 33.2).

Another way to look at the above example is that for every $9,034.00 transferred, an applicant would be ineligible for Medicaid nursing home benefits for one month.

All Financial & Property Transfers in the Last Five Years Must Be Disclosed:

Failure to do so is Medicaid Fraud.

We Don't Hide the Ball, We Do Planning That Works and Disclose Everything.

While Medicaid in Georgia may only require the applicant to provide 3 to 6 months of financial records, the DFCS / DCH system interfaces with the banking & financial system, matching Social Security numbers to 1099s and other IRS data, then to financial accounts & back to the Medicaid Applicant.

We use the Medicaid rules that exist, both at the federal and state levels, to develop asset protection & qualification plans that work legally.

"Curing" the Penalty for Improper Gifts or Transfers:

We can "fix" things that a family has done in the past by returning the transferred assets, which "cures" the penalty for those improper transfers.

Then, with the help of a Board Certified Elder Law Attorney, you can design a plan that will actually work.

The Medicaid Estate Recovery Program: "Losing the House to Medicaid"

Medicaid's Power to Recoup Benefits Paid:

Estate Recovery Liens.

Federal law requires all fifty states to attempt to recover the long-term care benefits paid on behalf of a Medicaid recipient from their estate after the recipient's passes away.

If steps aren't taken to protect the house, it will have to be sold to settle the recovery claim.

Let our Certified Elder Law Attorneys help.

The Medicaid Estate Recovery Rules Are Complicated And Must Be Carefully Navigated to Protect the Home.

You Need a Plan That Will Work. Your Family Needs a Certified Elder Law Attorney.