Medicaid Planning Attorney in Hickory

Elderly couple hiking on a hill while looking at the sunrise

For older Americans and disabled persons, Medicaid can be used to pay for long-term care such as nursing home services. However, Medicaid is needs-based, which means only those with limited means qualify to receive benefits. The problem is that nursing homes and similar services are prohibitively expensive. So some individuals find themselves having too many assets to qualify for long-term care through Medicaid, but not enough to pay for it on their own.

Medicaid planning involves strategically managing your assets for purposes of Medicaid eligibility. This allows you to protect what you’ve spent a lifetime earning while still obtaining the care you need as you age. The Medicaid planning attorneys of Patrick, Harper & Dixon are here to advise you.

What Are The Qualifications For Medicaid?

Before discussing Medicaid planning, it helps to understand how one can qualify for the program. The eligibility criteria vary by state because Medicaid is a joint federal-state endeavor. In North Carolina, an individual applicant for Medicaid may only have a maximum of $2,000 in countable assets ($3,000 per couple) to qualify. Importantly, the government uses the phrase “countable assets,” which means that various assets are not counted when determining eligibility. Assets that are counted generally include cash, stocks and other investments, certificates of deposit, non-residential real estate, boats, IRAs, and certain types of life insurance policies.

Which Assets Are Not Counted For Purposes Of Medicaid?

Certain assets are excluded when determining an applicant’s eligibility for Medicaid, including:

  • Home. An applicant’s residence will not be counted, up to a certain amount of equity (which changes yearly), provided the applicant intends to return home while absent. But even if the applicant doesn’t intend to return home, the house will be non-countable if a minor or disabled child or a spouse lives there.
  • Vehicle. One vehicle is exempted, provided it is used to transport the applicant, the applicant’s spouse, or a dependent relative.
  • Personal effects. Medicaid does not count an applicant’s personal belongings in determining eligibility. For example, household goods, clothing, furniture, and jewelry are not considered.
  • Spousal Allowance. If an applicant is married, the applicant’s spouse will be allowed to retain a certain amount of assets, called the Community Spouse Resource Allowance.  The exact amount depends on the total of the applicant’s countable assets.

It should also be noted that Medicaid has a five-year lookback period. That means the government will look at the five-year period before an individual’s application to see whether any property or money was transferred or gifted by the applicant or the applicant’s spouse.  If so, a sanction period of Medicaid ineligibility will be imposed, the length of which will depend on the exact amount of assets transferred during the lookback period.  For this reason, it’s important to start on a Medicaid plan well before you anticipate the need for long-term care.

Medicaid Estate Recovery

After a Medicaid recipient dies, the State of North Carolina will pursue Medicaid Estate Recovery against the recipient’s estate. This involves filing a claim against the recipient’s estate seeking reimbursement for the Medicaid benefits which were paid out during the recipient’s life.  Any assets remaining in the Medicaid recipient’s estate will be subject to Medicaid Estate Recovery. 

What Is Medicaid Planning?

Medicaid planning is simply the utilization of a number of different strategies to allow a person to qualify for Medicaid while preserving as many of the applicant’s countable assets as possible and, once qualified, protecting as many assets as possible to pass to the recipient’s family, rather than being paid to Medicaid Estate Recovery. The goal is to allow Medicaid to cover nursing home and other long-term care while preserving and protecting as many resources as possible for the applicant and the applicant’s family. 

While working with an experienced attorney who understands Medicaid’s complex rules, you may use such tools as:

  • Trusts. Although Medicaid will count some trusts as an asset, irrevocable trusts are exempt. As the name implies, an irrevocable trust cannot be canceled or modified after being created. The person who creates the trust (the settlor) will no longer have control over assets placed in it. However, the trust can be designed to benefit loved ones, allowing its assets to be put to good use while not disqualifying the settlor from Medicaid.  Irrevocable Trusts are generally subject to the five year lookback, so these should be put in place early.
  • Gifts. Gifting to children and others will remove assets from a person’s estate, thus making them exempt.  As with irrevocable trusts, gifts to individuals are subject to the five year lookback, so it is a good idea to give those gifts early. Giving away assets can help an individual qualify for Medicaid, and the gifts may be tax-free up to certain amounts.
  • Medicaid Annuities. For individuals who have a more immediate need for care and cannot wait for the five-year lookback to expire, Medicaid-compliant annuities may be a viable strategy to protect assets while qualifying for Medicaid benefits in the near-term.

How An Attorney Can Help

These and other Medicaid planning strategies can be complicated, both because Medicaid’s rules are complex and because the various strategies must be executed correctly so as not to jeopardize eligibility. 

There are two general approaches to designing a Medicaid plan that can protect your assets. One is called pre-planning, which means putting a plan in place now so the five-year lookback window doesn’t disqualify you when you need care. Another option is known as crisis planning, for individuals who are about to enter a long-term care facility now. Although crisis planning will limit your options, and it’s always better to plan early, our attorney can still help if you will need such care in the near future.

Each Medicaid plan is different depending on the person’s unique situation and need-for-care time horizon. A knowledgeable attorney can advise you on the best Medicaid planning strategy for your specific situation and ensure proper implementation of the plan so that you can obtain the care that you need.

Contact Our Hickory Medicaid Planning Attorney

You’ve worked hard to build wealth all your life. Give Patrick, Harper & Dixon a call today to find out how Medicaid planning can help secure your long-term care needs while allowing you to protect your hard-earned wealth and leave a legacy behind for your family.