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Tampa Estate Planning Attorney > Blog > Estate Planning > How To Fly Under Medicaid’s Radar When Spending Down Your Assets

How To Fly Under Medicaid’s Radar When Spending Down Your Assets


When estate planning lawyers ask new clients about their financial goals for retirement, the clients sometimes say that they want to be able to afford to live off of the interest from their savings.  Some say that they want to have enough money saved to last them for 25 or 30 years past retirement.  Rarely do clients say that their goal is to qualify for Medicaid.  Perhaps more of them should, though.  If you cannot otherwise afford to pay for nursing home care, Medicaid will pay for 100 percent of the cost of your care in a nursing home.  This offer is not as generous as it sounds, because once you move into a nursing home as a Medicaid patient, Medicaid makes itself the beneficiary of your Social Security check.  The only spending money you get is the Personal Needs Allowance, which in Florida is only $130 per month.  Unless you have long-term care insurance or a hefty savings account balance, however, entering a nursing home as a Medicaid patient when the need arises might be the most realistic option.  A Tampa estate planning attorney can help you be strategic about qualifying for Medicaid.

Sidestepping the Five-Year Look Back Rule

When an elderly person applies for Medicaid because he or she needs to move into a nursing home, Medicaid will carefully review the applicant’s finances over the five years leading up to the filing of the Medicaid application.  (If you start out paying for nursing home care out of your personal savings or your hybrid life insurance policy, but you run out of money or insurance coverage, it is much easier to get Medicaid to pick up where your previous source of funding left off.)  If you gave away a lot of money to family members or donated it to charities in the months or years leading up to your Medicaid application, this raises a red flag for Medicaid.  The same goes if you sold valuable assets at a loss or transferred them to family members.

The best way to avoid this problem is to start early giving cash gifts; do it now instead of in the five years before you apply for Medicaid.  Likewise, the best time to set up a trust for your children is when they are younger than 21, since Medicaid does not hold these trusts against you.  Home ownership does not disqualify you from Medicaid eligibility if your spouse stays in your house while you are in a nursing home.  It also does not count against you if you transfer ownership of your house to your son or daughter who has been living with you and caring for you in the years leading up to your Medicaid application.

Contact David Toback With Questions About Planning Strategically for Medicaid Eligibility

A Central Florida estate planning lawyer can help you make a plan for paying for your long-term care plan that includes Medicaid eligibility for nursing home care.  Contact David Toback in Tampa, Florida to set up a consultation.




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