If gifting is part of your estate plan, then you need to make sure that you have also considered how those gifts might influence your ability to qualify for Medicaid. It will depend on your medical situation when you gave the gift, who you gave the gift to and when you made the gift.

The general rule is that transfers made 5 years before you need Medicaid do not disqualify you. However, transfers made after that do. An exception often exists for charitable gifts. Other gifts often need to be paid back or Medicaid will not pay for care until the value of the gifts are exceeded by the costs of care. There is a way around this if a doctor certifies that at the time of the gift you were healthy and would not soon need long term care. However, that exception is not one that should be reasonably relied upon.

Gifting can be a part of your estate plan even if you anticipate needing Medicaid to pay for your long term care. However, you should talk to an attorney about when and how to give your gifts so that you do not accidentally exclude yourself from the Medicaid coverage that you need. Failure to do so can have dire consequences.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Medicaid is a federally funded health insurance program for low-income and elderly individuals. Unlike the Medicare program, the Medicaid program is income-based and reserved for certain groups of individuals with limited means and resources. Medicare is age-based and does not depend on an individual’s income. Medicare is available to U.S. citizens and other legal residents who are at least 65. In Texas, residents with limited means may qualify for Medicaid insurance if disabled, blind or at least 65 years old. If you are under age 65, you must have a certified disability and have limited income and resources or you must be blind and have limited income and possess limited resources.

If you qualify for Medicaid medical insurance, you may be able to receive medical and mental health services for little or no cost. If you need long-term nursing care and home health care, you may be able to receive these services at no cost. Unlike Medicare, the Medicaid program pays for most of these costs, regardless of the length of time.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Should children pay for the long term care of their parents? In the thirty states that have Filial Responsibility laws, they can be legally required to do so. Texas does not have these laws, but the issue is important for Texans whose parents live elsewhere or for Texas parents who might consider moving to another state.

Filial Responsibility Laws allow the state, or a health care provider, to sue family members to recover money that was spent on a relative’s medical care. Some of the laws take into account the ability of the relative to pay. Additionally, a federal law prevents the state from applying its recovery law if the person in question is already enrolled in Medicaid. However, the Filial Responsibility laws can still be applied if a Medicaid application is still pending.

These laws make planning for long term care and Medicaid extremely important. If you do not do so, your children could unexpectedly find themselves legally required to pay hundreds of thousands of dollars in your medical costs. While it can be argued that children have a moral responsibility to pay for their parents’ care, the reality is that often they simply cannot afford to or that the money would be better spent on their own children.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Long term care in a nursing home can be very expensive. If you do not plan properly, you can lose most of your assets before Medicaid will start paying for your care. Because you do not know whether or not you will need it, planning for the possibility of long term care should be a part of your overall estate plan. You have several options to plan for long term care. In Texas, you even have a unique option that is not available in most other states.

In Texas, you can use a particular type of enhanced life estate deed known as a “Lady Bird Deed.” It gets its name as it is what former President Lyndon Johnson used for his own estate. Basically, this deed gives you a life estate in your home and the home automatically passes to a beneficiary upon your death. However, there are certain advanced features. You can still control the property and sell it without the consent of the beneficiary, which is unlike a traditional life estate. Perhaps most importantly to most people, the home is exempt from Medicaid claims during your lifetime.

A Lady Bird deed is not right in every situation. It is one tool out of many that an estate planning attorney has to assist you in planning for the eventuality of long term nursing home care.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Medicaid often enters the lives of senior citizens when it comes to paying for the catastrophic costs of nursing home care.  Not being familiar with the complex Medicaid system, many families make mistakes within this confusing area of elder law.  Some of the most common mistakes include:

1.         Relying on Medicare or health insurance to pay nursing home expenses.

Neither Medicare nor regular health insurance pays for the cost of long-term care in a nursing home. With the average cost of nursing homes in Colorado exceeding $70,000 annually, without proper planning most families will quickly run through their life savings.

2.         Transferring assets to children or other relatives.

This almost always results in lengthy, unnecessary periods of ineligibility for Medicaid due to the lookback period, which allows Medicaid to examine transfers as far back as five years.

3.         Relying on a will or a living trust to protect property from Medicaid.

A will takes effect only upon your death, and a living trust will not protect your assets from being used to pay nursing home expenses.

4.         Putting property into joint ownership with a family member.

This is often regarded in the same manner as a transfer and can result in an ineligibility period.  It can also create unfortunate legal problems for families.

5.         Selling the family home to pay for nursing home care.

In some instances, the family home is exempt from having to be sold to qualify for Medicaid assistance to pay for nursing home expenses.

6.         Not seeking the advice of a Medicaid attorney.

A Medicaid attorney can help you not only understand  the complexities of Medicaid law, but they can help with Medicaid planning.  Medicaid planning allows you to maintain Medicaid eligibility while preserving as much of your family’s wealth as possible.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Many people get Medicaid confused with Medicare, but there are many distinctions between the two programs. Medicaid, simply put, is a medical assistance program that’s designed for disabled persons and low income, older people. It can also cover younger people who are receiving welfare from the government. Medicare, on the other hand, offers identical benefits to anyone enrolled regardless of their income level.

Medicaid is actually managed by the individual states, so eligibility regulations will vary from area to area. Medicaid also has some benefits that help many people overcome the astronomical costs associated with nursing home care.

Medicaid can come into play when you realize that you’re not going to be able to pay for long-term care. There are some options under the Medicaid plan to help you preserve your assets so that you can also help your loved ones survive financially without you. For instance, there’s something called transfer of assets where a person will transfer property without full consideration. This can be something such as giving away part of a property. These transfers must be disclosed to Medicaid and may cause an eligibility for a period of time.

The use of irrevocable trusts could also be another part of the estate planning process that will help an individual take care of the cost of long-term care. Any kind of trust that can’t be revoked will impact Medicaid eligibility.

Another important option to know about is called Medigap insurance. This is an insurance policy that will cover the gap between what Medicare will pay and the cost of the services. If Medicaid already covers you for the services being rendered, you will not need Medigap insurance. Talking to a qualified estate planning attorney who specializes in Medicaid will help you figure out exactly what kind of protections you need to put in place.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

There’s a lot of information floating around about Medicaid, particularly when it comes to paying for nursing home care. Some of the information is reliable, while some is not accurate at all. So, how do you know which information you can trust?  Get the facts from a trusted expert, like an experienced and qualified elder law attorney.  Below are three myths surrounding Medicaid, along with the corresponding facts:

1)      You can simply transfer your assets to your spouse and qualify for Medicaid.  The truth is, your spouse’s assets are counted, as well as yours, for Medicaid qualification purposes. So, signing property over to your spouse won’t accomplish much.

2)      You can give your property away to your children or others in order to qualify for Medicaid. In reality, it depends on the timing of the transfers. Certain transfers, when made within the five years before you file your Medicaid application, will result in a delay in your receipt of benefits. So, simply giving away property is likely to derail your Medicaid eligibility.

3)      You  can transfer assets to your revocable living trust to make yourself eligible for Medicaid.  For Medicaid purposes, property owned by your living trust is treated as if it’s owned by you. While a basic revocable living trust is not a great Medicaid planning tool, there are other strategies that allow you to play by the rules and qualify for Medicaid while preserving as much of your nest egg as possible.

Medicaid planning requires knowledge of the ever-changing rules that govern qualification. The best person to answer your Medicaid questions and to help you with Medicaid planning is an experienced elder law attorney.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

The specter of long-term care looms large for many people. Whether or not you’re facing an immediate need for nursing home care or assisted living, it’s likely that some form of long-term care will be a reality for you or a loved one at some point during your lifetime.

Like so many other topics that are related to elder law and estate planning, long-term care is tough to think about. For one thing, no one looks forward to losing their health, not to mention losing some degree of control over their day-to-day lives. And then there’s the question of how to pay for long-term care. A private room in a nursing home can cost thousands of dollars a month, a figure that can make a significant dent in even the healthiest nest egg. When you’re faced with all the possibilities, and the sometimes-unpleasant realities, it can be easy to become frozen, and not plan at all for the possibility of long-term care. This is a mistake, especially since the earlier you plan, the more options are available to you.

For example, if you plan early enough and if your income allows it, a long-term care insurance policy might be the way to go. Generally speaking, the younger and healthier you are when you purchase the policy, the lower your premiums will be. Long-term care insurance can go a long way toward defraying the costs of care, and the right policy can offer you a variety of options when it comes to the types of care available to you.

If long-term care insurance is not the right choice for you, your elder law attorney may be able to assist you in qualifying for Medicaid benefits so that you can afford nursing home while still preserving a portion of your assets to pass on to your spouse, children, or grandchildren.

One of the keys to Medicaid planning, as with long-term care planning in general, is to start early so that you have expanded options available to you. However, if you’re faced with an urgent situation or you have not been able to plan in advance, a qualified elder law attorney can likely help you uncover options for balancing long-term care bills with the preservation of your hard-earned savings.

In fact, no matter where you are on the long-term care planning timeline, an experienced elder law attorney can help you explore all the possibilities available to you, and assist you in putting together an effective plan.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

If you or your spouse anticipate the need for nursing home care in the future, and particularly if you’re concerned about how you’ll finance that care, you’ll likely want to meet with an elder law attorney sooner rather than later.

Given the strict rules that govern Medicaid qualification, the absolute best case scenario is to start planning to qualify for the program at least five years before you actually need apply for benefits. Medicaid imposes a five year “look back” period, which means when you submit an application, you’re required to report any transfers of money or property you’ve made in the 60 months leading up to your application. There’s a wide variety of transactions – like the transfer of assets to your children – that can cause a delay in benefits. Planning early helps because transfers made before this 60 month period are not counted against you when it comes to qualifying for benefits. So, the earlier you get good advice and develop a plan, the more options you’ll have available to you.

That’s not to say it’s too late to talk to an attorney if you or your spouse will need to submit a Medicaid application in less than five years. The Medicaid rules do allow some “wiggle room” within the 5-year look back period, but failure to follow the rules to the letter can result in problems with your application and, ultimately, delay your benefits. That’s why you’ll want to work with an attorney who is experienced in dealing with Medicaid planning – he or she will be familiar with all the intricacies, and can help you make sure you play by the rules while preserving as much of your property as possible.

Choosing the right advisor and planning as far ahead as possible can help navigate the Medicaid rules with confidence.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

The Medicaid program is one resource available to help cover the high costs of nursing home care. It is a federally-established program designed to help people of limited means gain access to the health care they need. Although the program is established by the federal government, it is administered by the states, and each state has slightly different rules for qualifying for Medicaid.

“Countable” vs. “Non-Countable”

In order to qualify for Medicaid, an applicant must meet certain income and asset tests. If your net worth is too high, you’ll be excluded from the program. However, not all of your property is counted   for purposes of determining whether you meet the asset requirements.

When you apply for Medicaid, your assets are divided into two categories; “countable” and “non-countable.” The following are examples of assets that are considered “non-countable” and are therefore not included in your net worth for Medicaid eligibility purposes.

Examples of Non-Countable Assets

• Your primary residence (up to $500,000 in equity)
• Term life insurance or burial insurance, as long as it has no cash value
• A whole life insurance policy owned by you, as long as it has a face value of $1,500 or less
• Your car
• $2,000 worth of your household goods and personal items
• Livestock held for consumption or for business purposes
• A burial plot held for you or your family members

Medicaid eligibility rules are convoluted, and it can be tricky to determine whether or not you fall within the requirements. It’s best to consult with an experienced elder law attorney who can help you determine whether you qualify. If you don’t meet the requirements, an elder law attorney can guide you in taking the necessary steps to qualify for coverage.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.