Medicaid eligibility requires minimal personal assets.
Your health care needs will increase as you age.
That is a given.
With this increase, your health care bills will also increase.
That is a given.
Some people turn to Medicaid for financial assistance.
That is not such a given.
What is Medicaid?
Medicaid is a government program managed by states to help with medical and long-term care costs.
It is needs-based, meaning individuals must qualify financially for eligibility.
According to a recent nj.com article titled “How trusts fit in with Medicaid planning,” there are plenty of rules for qualification.
In fact, the transfers would need to occur more than five years before the Medicaid application.
What happens if you made transfers in violation of this "look-back" period?
You may be denied benefits for a penalty period.
What is the penalty period?
The period is calculated based on how much you transferred.
This number is divided by the penalty divisor to determine your specific penalty.
If your transfer was large, your penalty period may disqualify you for a long time.
This calculation varies by state, since not all states use the same penalty divisor.
Can a trust hold assets to remove them from consideration?
Are you the sole beneficiary?
If so, it will be counted as your asset.
Is it revocable?
It will also be considered and asset.
What if the trust was created by a third party using their funds?
It depends on who created the trust.
It also depends on the terms of the trust.
If you qualify, are their consequences after you die?
The state government is required to seek reimbursement for Medicaid benefits from the estate of every Medicaid recipient.
Work with an experienced elder law attorney to determine if Medicaid is a viable option for you.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: nj.com (December 26, 2017) “How trusts fit in with Medicaid planning”