Approaches to Qualifying for Medicaid 

There are many income and asset planning techniques used to qualify for Medicaid when one is over the limits. Generally, in order to qualify for Medicaid, you must pass Medicaid's "asset test". A single applicant cannot have more than roughly $31,175 worth of assets to qualify for Medicaid. However, there are some techniques that we will describe below that can be used to help qualify and protect those assets.

Irrevocable Funeral Trusts
These are trusts that can be established for the purpose of paying for the Medicaid applicant's funeral and burial expenses in advance. For Medicaid applicants who have assets that exceed the Medicaid asset limit, creating an Irrevocable Funeral Trust, can reduce their countable assets.

Spousal Asset Transfers
When only one spouse of a married couple applies for Nursing Home Medicaid or Community Medicaid, certain spousal protections apply to ensure that the well spouse does not become impoverished. Generally, the well spouse or community spouse may keep about $3,700 of the couple's combined income per month and roughly $150,000 of the assets.

Medicaid Asset Protection Trust
A Medicaid Asset Protection Trust is another type of Irrevocable Trust that protects assets from being counted towards Medicaid's asset limit. The Trust can also be used to have loved ones inherit assets without needing to go through Probate. The assets that are funded in the trust are no loner considered owned by the person who created the Trust, thereby protecting their assets from Medicaid.

Promissory Note
Commonly referred to as the "Half Gift, Half Loan", this gifting strategy us intended to lower a Medicaid applicant's assets while preserving assets for their loved ones to inherit. Simply put, a Medicaid applicant gives approximately half of their assets to a family member and purchases a Medicaid Annuity with the remaining half of the assets. The annuity creates a source of income, which is used to pay for long term care during the Medicaid ineligibility period. Once a specific period of time lapses and the payments are made, the Medicaid applicant will be Medicaid qualified and would have been able to preserve a little more than half their monies.

  

To learn more about the different techniques used to qualify for Medicaid, contact MLG and schedule your complimentary consultation. 

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The Benefits of Placing Your Home in a Trust