spouse’s assets are not equal to a minimum of $25,284, then the community Other Assets: Pay Off DebtOne can pay off credit card debt, their mortgage loan, their automobile loan, etc. IndividualsThe asset limit for a single elderly individual for long-term care is $2,000 in most states. Those are generally considered non-countable assets, though sometimes if an individual lives in a very expensive home (say, one that's worth more than $1 million), there may be home equity that will be required to be used in a Medicaid spend down. This might include: The amount one can put in an irrevocable funeral trust depends on the state in which one resides. If the Medicaid or the spouse applicant has an In addition to meeting some medical criteria, applicants must also abide by strict financial eligibility requirements both before applying for Medicaid and after they have qualified. Medicaid is a program that helps low-income seniors with limited assets afford health care and long-term care. Basically, an individual pays a lump sum of money. It often happens that elderly Americans ‘spend down’ their financial resources. If fair efforts are done to sell the property then that While one may know it’s necessary to spend-down some of their countable assets to qualify for Medicaid, the exact amount that needs to be spent down may be unclear. Make note, the pay must be reasonable for the area in which one resides. The content © 1906-document.write( new Date().getFullYear() ); Asset Protection Planners, Inc Terms of Service | Privacy, Your information remains confidential Privacy Policy. Having assets over the Medicaid asset limit does not mean a single senior or married elderly couple will not be able to receive Medicaid benefits. So one should not hesitate to seek professional advice well in advance of when one thinks they might be close to becoming financially eligible for Medicaid. Any question I submit will not be treated as privileged or confidential and may be posted along with its response on www.AskHarry.info so others with similar issues can benefit from the response. In addition, the spouse applying for Medicaid is able to retain a set amount. can receive the assets after her passing. spaces dedicated to the Medicaid insurance applicant, spouse and the immediate "Save receipts and confirmations and ask for copies at your doctor's office if they do not usually provide them. Read on to brush up on the basics, and determine whether a Medicaid spend down is the right choice for your loved one. Home improvements include: Vehicle Repairs or PurchaseOne’s vehicle is also considered an exempt asset, so putting money into making repairs to it is another way to spend-down assets. Some examples of health care costs that you might put toward a Medicaid spend down include: Here are the key differences between an income spend down and an asset spend down, and tips for spending down strategically. One way to avoid spending down your assets so you can qualify for Medicaid: Create an irrevocable Medicaid trust. And married applicants, where both spouses are applying for Medicaid, are able to keep up to $3,000. This is a way to compensate a relative or close friend (on a monthly basis) in order to provide care. excluded resource until they wish to return home. Again, there are exceptions to this rule. Livestock. Creating a Medicaid Trust, is a much less expensive option. Example 3 - Grant is married, lives in California, and needs significant assistance with his daily living activities, enough so that he requires assisted living care. understanding: 1. Try these retirement ideas to keep your second act exciting. While most Americans think long-term care is something that others will need (and not them), these grim statistics clearly say otherwise. excluded from resources regardless of the rate of return. In short: You will have to prove your need for financial assistance to be eligible, so make sure to keep all copies of receipts and paperwork from your doctor. South Carolina allows the “healthy spouse” to keep up to 100% of $66,480, and Illinois allows up to $109,560. Not all gifts trigger Medicaid penalties. This is just as it is with a regular life insurance policy. Community spouse depletion protection: The community spouse Say they are sued. There are ways to mitigate the cost of long-term care insurance and protect more of your assets from nursing home costs. Keep in mind however, that you have to establish this trust early. Save my name, email, and website in this browser for the next time I comment. Moreover, this type of trust is a valuable part of of estate planning. Get personalized guidance from a dedicated local advisor. One is almost always better off financially to set up a Medicaid Trust and invest the money that would have gone toward the premiums. So what would be considered a countable asset? And what happens if an individual doesn't qualify? Are Trust Assets Subject to Medicaid Estate Recovery. Instead, the individual would incur a time penalty that's calculated in months, rather than in dollars. And this is just is one type of long-term care (there are others). ($10,680 each = $21,360). The medicaid applicant could put 100K worth of improvements into their home, or sell the 300K home and purchase a 400K home with the extra assets. Medicaid insurance does not require all of its recipients to be completely drained since certain assets will be exempted. Medicaid cannot count it as an asset. Subtleties exist that can result in ineligibility for the program. Example 2 - Michael and his spouse, Joann, are both in their 80’s and are in poor health, with Michael soon requiring Medicaid nursing home care. This is because the asset limit varies by state, as well as if one is single or married, and if married, if one or both spouses are applying for Medicaid. That’s something that happens to ‘other people.’ The truth, however, is quite grim. A spend down can be an important financial tool when an individual's income is too high to qualify for Medicaid. For instance, the income and asset limits might be different for the regular state Medicaid program versus a Home and Community Based Services (HCBS) Medicaid waiver or nursing home Medicaid. If you don’t end up needing long-term care, your heirs receive death benefits when you die. the Medicaid insurance exempts the value of such life insurance from This timeframe is for assets that you transfer to a trust or “sell.” People who do this typically sell them for below market value. Take the steps to make sure your assets are legally safeguarded from nursing care costs. For example, if the cash value is $2,000, only $500 would count towards your eligibility limit. Retiring with a pension is more complicated than simply claiming your payments. However, before you qualify for long-term care from Medicaid, your existing financial resources must meet the set threshold. I just need a few things to get you going. 6. You don’t have to own a home overseas to enjoy the retirement of your dreams in another country. In the United States, less than 8 percent have long-term care insurance. The problem is that this threshold level is extremely low. case the Medicaid applicant has maintained the livestock as part of a trade or But if the house is a property that is bought inside three months following the It allows you to qualify for long-term care at the same time. However, the majority of the article will focus on asset spend-down as that is the more complex topic and what most people think of when hearing the phrase “Medicaid Spend-Down.”. And the healthy spouse is able to keep up to 100% of the rest of the couple’s combined assets up to the $128,642 maximum. Again, this figure varies by state. employment is terminated or any hardships that are duly given approval by the Medicaid only reviews applicants’ past financial information within a specific window. Therefore, they have “spent down” their excess assets and Grant is eligible for Medicaid. This is as long as neither you (the person applying for Medicaid) nor your spouse has direct access to the principal or is named as the trustee. 2020 Medicaid Community Spouse Resource Allowance (Simplified). Example 1 - Billy is a single, elderly resident of Illinois who requires long-term Medicaid care in his home. It all adds up and one missing receipt from a doctor's appointment can mean the difference between you qualifying for Medicaid and not," she adds. surrender the life insurance policy for cash. appliances or personal importance materials like clothing are excluded. If the Medicaid applicant or his spouse is owning life The general rule is that if a senior applies for Medicaid, is deemed otherwise eligible but is found to have gifted assets within the five-year look-back period, then they will be disqualified from receiving benefits for a certain number of months. Medicaid insurance does not require all of its recipients to (In California, this window is only 30 months.) benefits. However, this varies depending on the state in which one resides. I am also her agent under her durable power of attorney. When you die, your children and spouse may be left with nothing, with the possible exception of your house. These are also non-countable assets. Retirement might include a relaxing beach vacation or an exciting second career. This adds to the complexity of the calculation. Get advice and consult with a trusted professional. The earlier one get it the less expensive the monthly payments will be. A Lady Bird deed is a form of a life estate deed that exists in three states: Florida, Texas and Michigan. on this page is accurate as of the posting date; however, some of our partner offers may have expired. Assets You Can Have and Still Qualify for Medicaid, https://www.dhcs.ca.gov/formsandpubs/forms/Forms/MC%20Information%20Notices/MC007ENG(0414).pdf, https://medicaid.ohio.gov/Portals/0/Resources/Publications/Guidance/MedicaidPolicy/Elig-Chip/MEPL-146.pdf, https://www.health.ny.gov/health_care/medicaid/publications/docs/gis/20ma01.pdf, https://aspe.hhs.gov/basic-report/medicaid-treatment-home-determining-eligibility-and-repayment-long-term-care, Spousal Impoverishment: Medicaid Spend-Down Rules for Married Couples, Applying for Medicaid: A Caregiver’s Personal Experience. If there is anything left after you pass away, that goes to your heirs as well. Let's say your mother brings in $800 a month with a Social Security check, and the Medicaid income limit in her state is $600. Those are some additional reasons why a much better option is the Medicaid trust. Below are the countable assets for your Some people make the big mistake of giving assets away to family members instead of creating a trust. And then sell them family members and/or friends before applying for long-term care. That is, at least five years prior to entering a nursing home or applying for long-term care. plot, crypt and mausoleum and also burial space items for the Medicaid Excluding all More often than not, this extra cash will put a Medicaid recipient over the asset limit, which is cause for Medicaid disqualification. 4. Heiser is the author of “How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets,” an annually updated practical guide for the layperson. First, at least some of the proceeds will go to your mother and she will no longer be eligible for Medicaid. Elderly individuals or married couples who are uncertain if their assets or income exceed the allowable limits may want to, Joshua Iversen, President, Syzygy Financial LLC, Amount the “Community Spouse” keeps in a 50% State, Amount the “Community Spouse” keeps in a 100% State, Property (while one’s primary home is considered a non-countable asset, property that is above and beyond one’s primary residence, such as a vacation home, is considered a countable asset.).