On July 25, 2013

You see advertising like “Avoid the Medicaid Trap”, “Protect your home and savings from Medicaid and nursing home bills”, “Protect your kids inheritance from Medicaid using our trust package” from many attorney’s promising to show you ways to keep everything from going to Long Term Care Medicaid. While there are certain assets that can be excluded from Medicaid you need to keep in mind what Medicaid is for. It is designed for low income people over the age of 65 (in most cases) to pay costs they cannot otherwise afford. In other words the government will step in and help you out if you qualify.

Here is what you can have and still qualify for Medicaid:

You can have $2,000 in cash.

If you home is $525,000 or less it can be excluded. In some states the limit maybe $750,000.

One car of any value can be excluded from your eligibility.

If you have planned for your funeral expenses by buying an irrevocable plot or a prepaid plan that to can be excluded. If you have money set aside in a separate account specifically for this purpose it can be excluded as well.

Your personal property needed for self-support is excluded.

Only the face value of Life insurance up to $1,500 is exempt and term life policies are as well.

There is a 5 year look back rule for transfers/gifts that many people can take advantage of, if they are willing to plan ahead. You might be able to avoid having to spend down assets using this method. If a transfer is made with in the 5 year look back a penalty period is imposed.

There are no secret ways to avoid certain assets being counted but there are ways you can plan ahead. Many people make the mistake of waiting until the time comes to apply, to plan for this event. They are generally rewarded with silver tongued attorneys telling them they can somehow exclude these assets for them if they buy an expensive package from them. The truth is proper planning 5 to 10 years out will help you more than the last minute planning will.

Going the DIY route can and most likely will get you in trouble later on. Like most government programs the rules can be confusing and difficult to interpret correctly. Just remember when looking at ads if something sounds alarming and crazy it more than likely is just a tactic to get you in the door. Find a trusted Elder Law attorney that you feel comfortable with and aren’t trying to pressure you into something before you have time to think about it.

Categories: Medicaid