Did you know that, according to the US Dept. of Health and Human Services, a person turning 65 today has almost a 70% chance of needing some type of long-term care services, including assisted living or a nursing home? The median cost of a private room in a nursing home is over $100,000 annually, according to the Florida Health Care Association. Medicaid planning involves legally and ethically protecting assets for those who do not already qualify for Medicaid, and for those who qualify but may be expecting an influx of money, such as an inheritance or a personal injury settlement, so that individuals can make their money last longer and lead to the highest possible quality of life.
The laws governing Medicaid can be complex. For 2021, the income cap to qualify for Medicaid in Florida is $2382.00, per month. If your monthly income, from all sources, exceeds the limit for this year, you will not qualify for Medicaid. You may, however, consider creating either a Miller Trust, a Qualified Income Trust (QIT), or a Supplemental Needs Trust. A Miller Trust is an irrevocable trust that accepts any monthly income over the income cap or slightly more, even though the Trust still uses that money to pay for your long-term care, minus a small personal allowance. These types of trusts may be structured so that certain assets and income sources are removed from the Medicaid calculation, allowing a person to then qualify to receive Medicaid benefits to cover the cost of long-term care.
Medicaid planning may require a thorough examination of your total asset portfolio. Our office can help you protect your home and other assets. This can be especially important if one spouse needs care and the other can live independently. Do you have questions? Please contact our law practice to learn more. We are here for you. Elder and Estate Planning Attorneys PA is a law office small enough to provide personal service but large enough to provide service in Palm Beach, Martin, St. Lucie and Indian River Counties.
If you’re a parent of a child with special needs, you may be wondering if you can leave financial assistance without losing important benefits, such as Medicaid, Social Security, and the other forms of assistance they might be entitled to.
Sadly, public benefits programs are often inadequate and need to be supplemented with other resources. Anné Desormier-Cartwright of Elder and Estate Planning Attorneys PA says, “If you want to enhance the quality of life for a disabled loved one or family member, a special needs trust is specifically identified to meet certain additional needs for the beneficiary. Thankfully, money given to a special needs trust shields disabled persons from these income limits because they won’t technically own the assets. Instead, under this estate planning technique, the trust will.
An estate planning attorney can help you determine the right type of trust and how to construct it so that a special needs person gets every benefit they’re entitled to, giving you the peace of mind knowing that your family member has the support he or she needs, both now and in the future.”
Elder and Estate Planning Attorneys PA is a law office small enough to provide personal service, but large enough to handle all of your estate and planning needs.
Beware of “Medicaid Friendly” Annuities versus “Medicaid Compliant” Annuities.
I have had a few clients who have been sold “Medicaid Friendly” Annuities. In at least one case, the annuity salesman sold the client a “Medicaid Friendly” annuity in the local senior center. I don’t know who the salesman was, or the details of his sales pitch, but what he sold the client made an extreme mess of her Medicaid eligibility.
Annuities can be an invaluable tool in Medicaid planning. When used correctly, an annuity can convert a person’s spend-down amount (excess resources) to a stream of income for the spouse at home, or, in the case of a single or widowed person, can preserve some of the spend-down amount for expenses not covered by Medicaid.
Medicaid regulations became much more strict in recent years, and the criteria that an annuity must meet to be excluded as a resource for Medicaid eligibility are very specific. They must be:
Provide equal payments
Name the FL Medicaid Program as beneficiary for benefits paid on behalf of the annuitant
Most of the “Medicaid Friendly” annuities being sold out there do not meet these requirements and will count against a person applying for Medicaid benefits. Often the seniors are advised by the annuity salesman that all they need to do is annuitize the annuity if and when they enter a nursing home in order to become eligible for Medicaid. This is often not true because these annuities do not meet ALL the other Medicaid requirements for them to be considered a non-countable resource.
Most annuities are simply a tax-deferred investment tool. Medicaid Compliant Annuities, on the other hand, are a very specific product offered by only a limited number of insurance agents and companies. Medicaid Compliant annuities are best used when a person knows that nursing home care is imminent and the annuity is then tailored to immediately convert the person’s spend-down amount to an income stream. So, be wary of “Medicaid Friendly” annuities being marketed to the senior community at large.