Medicaid Planning

The Importance of Proper Planning

Medicaid planning is a critical part of elder law. Eligibility for benefits is based in part on the amount of your assets and in part on the amount of your income. Unfortunately, Medicaid law is not intuitive. It requires an understanding of Federal and State statutes and regulations that are difficult to understand and that often conflict with other laws. All too frequently, clients try to deal with matters on their own, without legal advice, and learn they have made a mistake. Only then do they seek out a lawyer, hoping it is not too late to fix things and make the problem go away.

If you transfer assets during the 5-year period before applying for Medicaid benefits, and if those transfers were for "uncompensated value" (Medicaid's way of referring to a gift), you may be subject to a penalty that results in a period of ineligibility for Medicaid benefits. The amount of the penalty depends on the amount of the gift. One of the most common mistakes is to make gifts to children and grandchildren, because the IRS permits annual gifts of up to $13,000 per person. Although the IRS does permit such gifts, Medicaid will disregard them, and you can be disqualified from Medicaid eligibility for a year or more, depending on the amount of the gifts.

No one can learn about Medicaid overnight or by surfing the Internet for a few hours. Not all lawyers are willing to put in the time to grasp the fundamentals and continue the learning process. Not all lawyers have the patience to work with Senior Citizens and their families until they really understand the consequences of Medicaid planning. I can help remove the confusion and provide you with the level of comfort you and your family deserve.

At the law office of Michael C. Rudolph, Esq., P.A., I offer my clients over 50 years of experience as an attorney. I handle Medicaid applications and planning. I know these can be intimidating and confusing issues, but I can help you make sense of it all. I am happy to take the time to walk you through the process, step by step, to make sure everything is in order.

Helping You Understand Your Options

Parents almost always want to leave a legacy for their children. I am frequently asked: "Can you help so that I don't have to turn my house over to a nursing home?" We can usually develop a plan allowing you to transfer assets and still retain eligibility for Medicaid benefits. Using the Medicaid law, and working within its guidelines, I can help you design a plan that will allow you to transfer the maximum possible percentage of your assets to your beneficiaries. Because every case is different, how much you can transfer depends on your specific circumstances. The earlier you begin the planning process, the more options you will have. Because the transfer of assets usually is accompanied by a loss of control over those assets, we have to discuss how much control you are willing to give up. Sometimes, through the use of trusts or other techniques, we can make transfers but still allow you to retain a significant degree of control. This requires an understanding of the law and how to use it to your advantage. I frequently meet with parents and their children so that the entire family can understand the issues that need to be considered, and the choices that can be made. When the family is involved, we eliminate the misunderstandings that can occur when advice I give is relayed to a third party who does not have a chance to ask questions. When the parents finally decide on a plan, everyone understands it.

Most people do not realize that some asset transfers are exempt from the penalty provisions of the Medicaid regulations that prohibit transfers for "uncompensated value." For example even after you enter a nursing home, you may transfer any of your assets to:

  • Your adult child who is blind or permanently disabled
  • A trust for the sole benefit of someone who is under age 65 and permanently disabled (whether or not that person is your child).

You do not have to wait for the expiration of Medicaid's 5-year look-back period, and you can even make the transfer after you have entered a nursing home.

  • You are permitted to transfer your home to your spouse, or your child who is under age 21.
  • You can even transfer your house to your adult child who has lived in your home for at least two years before you entered a nursing home, as long as you can establish that he/she provided you with care that allowed you to stay at home during that time.

These are just some of the transfers that are exempt from the Medicaid Law. There is a great deal you can do if you seek the advice of someone who knows the law.

Submitting a Medicaid Application

The cost of long-term care at a nursing home is expensive — as much as $9,000.00 - $10,000.00 per month in Passaic, Bergen and Morris Counties. At those rates, it does not take very long for a lifetime of savings to be wiped out. Medicaid has specific guidelines that must be met in terms of income and asset ownership before a person can qualify for benefits. The application process requires you to submit a great deal of information.

If you are organized, and if you keep good records, you can submit an application for Medicaid benefits by yourself. The social worker at a nursing home generally knows a great deal about Medicaid and will probably be happy to assist you in preparing a Medicaid application for yourself, your spouse or your parent. But the social worker is not likely to have enough information about your family dynamics or about recent changes in the Medicaid law to suggest how Medicaid regulations can offer significant planning opportunities. You are better off consulting with a qualified Elder Law attorney sooner rather than later. I can interpret and help you understand the law. If you wait, you may lose out on steps available to preserve your assets.

If you are like so many people who don't like filling out multiple-page forms and gathering the many pages of documents that must accompany the Medicaid application, we will do it for you and put everything in a well-organized, indexed loose leaf binder so that it is easy for the Medicaid caseworker to review your application.

Contact an Attorney

Contact my office today to schedule an initial consultation. I have a home office in Kinnelon and a satellite office in Oakland for the convenience of my clients. Both offices are handicap accessible. I am available during regular business hours in Kinnelon and by appointment in Oakland.

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