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.

Americans are living longer and healthier lives than ever before. And while this is true, it’s also true that more of us than ever before will need some form of long-term care. This fact changes the way we look at both retirement planning and estate planning.

There are three main ways to pay for long-term care:

1. Pay out-of-pocket through savings or by selling off assets. This method of paying for care requires advance planning and may have a great effect on the size and type of inheritance you can leave to your loved ones when you pass away.
2. Pay using long-term care insurance. If you intend to use insurance to pay for your long-term care needs, you’ll need to engage in some planning, since this type of insurance generally does not become effective immediately, and because policies are more affordable the further in advance they’re purchased.
3. Pay using Medicaid. Planning is required here, as well, because the Medicaid program has strict eligibility requirements and you may need to “spend down” your assets in order to qualify for benefits.

The first step toward including your long-term care needs in your retirement and estate planning is to have an idea of what those needs will be. You can get an idea of the costs of different types of long term care in your specific area by using this calculator. Your estate planning attorney can suggest strategies for balancing long-term care costs with your other estate planning goals and needs.

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

Part of making a comprehensive, effective estate plan is figuring out how best to pay for long-term care, should the need arise, while preserving your savings and other assets for your loved ones. Medicaid is a common option for covering the expense of long-term care, but for many people, qualifying for Medicaid takes some careful planning.

So, what exactly is Medicaid?

Medicaid is a need-based government health insurance program. It’s federally-established, but it’s administered on the state level, which means that Medicaid rules vary from state to state. So, Medicaid planning strategies that worked for your sister-in-law in Ohio might not be effective here in Texas.

The Medicaid program offers far-ranging health coverage, including both inpatient and outpatient services, and prescription drugs. You can be covered by Medicaid and Medicare at the same time. In many ways – especially when it comes to long-term care – Medicaid picks up where Medicare leaves off. In fact, Medicaid can pay your Medicare premium and deductibles.

In order to qualify for Medicaid, you have to meet certain income and asset requirements – in short, you can’t earn or own too much. This doesn’t mean, however, that you have to be completely destitute in order to qualify for Medicaid. And, if you work with an experienced attorney and start planning far enough in advance, it’s possible to qualify for Medicaid while still providing for your family members.

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