The Medicaid qualification process often gets a bad rap. It’s true that there’s a certain amount of tedious detail work that goes into qualifying, but understanding Medicaid guidelines before you begin that journey can ensure it’s a smoother process and with the help of your elder law attorney, you’re less likely to face the appeals process. This week, we explore a few of those misconceptions.
Going Broke for Medicaid
This is often the most misunderstood aspect for seniors wishing to apply for Medicaid; in fact, many don’t apply because they’ve heard that you must go bankrupt or unload all of those assets you’ve worked hard for your entire life. You are allowed to maintain many of those assets, whether you’re single or married. Exempt assets include one vehicle, your home’s furnishings, prepaid funeral policies, personal property, life estates in real property and those assets that are typically valuable from a sentimental perspective (meaning they cannot be converted to a monetary value). If only one spouse is seeking Medicaid coverage, the home is exempt for as long as the other spouse is living. For those who are single, a residence might be exempt either temporarily or permanently. Again, your estate planning lawyer will be able to guide you through that process.
I Gave My Granddaughter $1,000 for Graduation
This is the confusing five year look back period. When a person applies for Medicaid, the application asks if the applicant made any transfers to others within the five years preceding the application. If a transfer has taken place during the look back period, there may be divestment penalties for the asset transfers. It’s a bit tricky in that it’s never been an easily understood dynamic associated with Medicaid laws.
Transfers of money between spouses are always exempt. Gifting to others, even other family members, can sometimes subject Grandma to penalties in the form of a brief time of ineligibility. Smaller gifting efforts like cash for the grandkids at graduation are quickly overcome, it’s the bigger cash values – say, $60,000 to help an adult child start his own business – that can be time consuming to overcome. Because there are exemptions and because there may be small variations from state to state, an experienced elder law attorney or Medicaid lawyer is always the best first step to take.
Understanding Medicaid Guidelines
Many also believe there’s a point in time that it’s no longer feasible to begin Medicaid planning. The truth is it’s never too late or too early to begin Medicaid Planning. In those cases where planning was not done and the person is already in a nursing home, for instance, those assets may still be protected. Proper planning is crucial and can go a long way in saving a large portion of one’s assets.
If you’re married and if you put all of your money and assets into your spouse’s name, you should know that both of your assets are used in eligibility determinations. Both spouse’s assets are used in the computation of the Community Spouse Resource Allowance, which is the total amount that the spouse remaining at home is allowed to keep when the spouse in the nursing home is on Medicaid.
It’s not as complicated as it reads, but for those who do opt to seek help via an experienced attorney are the ones who will experience fewer frustrations as they move through the process. If you’re interested in understanding Medicaid guidelines, contact DeBruyckere Law Offices, PC today.
Daniel DeBruyckere
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