How Do I Protect My Assets From the Nursing Home and Qualify for Medicaid?

[Dale M Krause]

• In the case of a couple, with one spouse at home and (the wife) and the other spouse (the husband) in a long-term care nursing home facility (help with essential functions in life: eating, bathing, dressing, toileting, and transferring), the answer is a Funeral Expense Trust (FET) for each, and a Medicaid Compliant Annuity (MCA) for the wife.
• Assume the couple has a house, one car, traditional furniture, personal property, and $300,000 in bank accounts. The wife has monthly social security of $1,500, and the husband has $1,700. The monthly cost of his care is $8,000.
• With $300,000 in savings, they know their wealth will be exhausted in 37 months.
• Under Medicaid rules, the wife keeps the house, car, all the furniture, and personal property, as well as $154,140 from the bank accounts; the husband retains his personal property and $2,000 from the bank accounts.
• To get him Medicaid eligibility, they need to spend $143,860.
• By setting up a $10,000 Funeral Expense Trust (FET) for each and a $123,860 Medicaid Compliant Annuity (MCA) for her, he is immediately eligible for Medicaid benefits.
• Now, instead of paying $8,000 for his care, he will pay only $1,650, with Medicaid paying the balance.
• The wife will have a monthly income totaling $6,670.
• Setting up FETs and an MCA can be complex, but you can protect your excess assets with the right professional assistance while qualifying for Medicaid coverage.
  
  
  

 

[somarco]

While I appreciate the information in your posts, it seems like this one in particular borders on offering legal advice.

I know enough about estate and Medicaid planning to be dangerous . . . so this is way outside of my wheelhouse. Talking about trust documents seems like pushing the envelope a bit.

Also, this seems more like it could be in the Final Expense forum and/or Annuity

 

[fed up]

They can always divorce.

 

[yorkriver1]

Is there any reason not to just work with a good Elder Law attorney? Especially one near the area, as they will know what facilities are available, etc.

 

[somarco]

Elder Law attorney?

Perhaps because the attorney will suggest trusts and other ways to transfer/hide assets but may not include an insurance product that pays a commission?

Interesting article about Medicaid and Annuities

Medicaid Annuities | Pros & Cons of Using Annuities to Become Medicaid Eligible

Learn about different types of annuities and their role in reducing countable assets for Medicaid eligibility, the general requirements in order to be Medicaid compliant, and the varying rules between different states.

www.medicaidplanningassistance.org

This qualification was interesting to me.

Must Get Back What Was Paid – An annuitant must get back the investment of the annuity in its entirety during their life expectancy. As an example, if one’s life expectancy is 5 years and they purchases an annuity for $60,000, they must receive a payment of a minimum of $1,000 per month. (60 months divided by $60,000 = $1,000 month)

 

[Dale M Krause]

My posts are designed to provide helpful information when assisting elder law attorneys who represent your clients. Clients need an elder law attorney to advise and guide them in significant estate, LTC, and Medicaid planning decisions.

 

[scagnt83]

Bob, there are zero ways to "hide" assets from Medicaid spend-down rules.

Even the Irrevocable trusts that shelter assets are subject to the 5 year rule.

Using a Medicaid Compliant Annuity is literally the only way to protect a portion of assets and keep using it as an income stream while in a care facility.

There is a whole niche sector of financial planners who specialize in this type of planning.

ALL financial planning borders on legal advice. But only legal advice as it pertains to the solutions and situations the Planner is advising on.

Dale's posts are the exact opposite of what this forum is about.... professional dialogue.... but this post is spot on with Medicaid Planning.

 

[Newby]

Bob, there are zero ways to "hide" assets from Medicaid spend-down rules.

Even the Irrevocable trusts that shelter assets are subject to the 5 year rule.

Using a Medicaid Compliant Annuity is literally the only way to protect a portion of assets and keep using it as an income stream while in a care facility.

There is a whole niche sector of financial planners who specialize in this type of planning.

ALL financial planning borders on legal advice. But only legal advice as it pertains to the solutions and situations the Planner is advising on.

Dale's posts are the exact opposite of what this forum is about.... professional dialogue.... but this post is spot on with Medicaid Planning.

Funeral Trusts are not subject to the 5-year look back. Or any look back at all. They are day, one exempt from counting as a resource for Medicaid.
I’ve done thousands of those for people already on Medicaid or applying for Medicaid and never a problem with any of them.
In most states they are limited to $15,000 and some states limited to $10,000.