Helping clients accumulate and protect wealth

Most of us do not realize that when the time comes for our parents or ourselves, there are few options in paying for in-home care, assisted living or long term/nursing home care needs.

The average cost of a nursing home in Ohio is around $7,000 per month with some facilities charging $12,500 a monthor more. Medicare, our country’s medical insurance benefit for those over age 65, will only pay for up to 100 days of care, and usually much less. After this time period, your options are to private pay or seek Medicaid Benefits. Will you have an extra $7,000 to $12,500 to spend each month for this care?

Medicaid is massively misunderstood benefit in America. It is a joint program between the federal government and the states which provides benefits for in-home care, assisted living and long term/nursing home care. Each county in Ohio has its own Medicaid office overseen by the Ohio Department of Jobs and Family Services.

To qualify for Medicaid, one must submit an application which shows countable assets below $2,000 and monthly income below $2,523 (the 2022 limit). However, these asset and income levels are subject to detailed structuring so that even a person having over $1,000,000 in assets can, with careful planning, qualify for Medicaid.

The common thought that one must be poor to qualify for Medicaid is absolutely wrong. How can this be true? Ohio Medicaid regulations allow a married couple to shift assets and income from the spouse needing assistance to the healthy spouse. Also, certain assets like a home, car, wedding rings, medical equipment and the like are exempt from counting towards the Medicaid limit. Single and widowed person have similar planning options.

You may have heard that one must “spenddown” all of their assets to get under $2,000 to qualify for Medicaid. Many people in the medical field may suggest this to you. But this is untrue. In many instances our planning can shield all of a person’s assets from being counted by Medicaid and also protect those funds from being captured down the road.

Medicaid has a program called Medicaid Estate Recovery which seeks to recover Medicaid benefits from one’s assets after they die. For instance, Medicaid can place a lien on one’s house which must be satisfied before that house can be eventually sold. Our planning seeks to minimize or eliminate this possibility.

Our Medicaid planning seeks to achieve three goals; 1. Qualifying one needing benefits for Medicaid, 2. Keeping assets inone’s family and not subject to Medicaid “Spenddown” and 3. Shielding as much of the assets as possible from Medicaid Estate Recovery.

Medicaid qualification can be met by almost any Ohioan; however it takes careful planning with a qualified Elder Law attorney. Our firm is experienced in Elder Law and Medicaid planning and has helped many Ohio families meet Medicaid qualifications while saving their legacy for the family.

What is a Medicaid Trust?

A Medicaid Trust is a part of an estate plan which seeks to allow almost anyone to avoid Medicaid asset limits.  It is a completely proper and legal planning strategy.  

Assets are transferred into the Medicaid Trust and after five years, all the assets in the trust are ineligible for inclusion in one’s assets for Medicaid qualification purposes.  There are many different planning techniques using Medicaid Trusts and your exact situation will determine the proper plan. 

For example, if you transferred your home to your children four years ago, you may be completely ineligible for Medicaid. However, in this situation and many others, we can help restructure your assets and income and qualify you for Medicaid.  

The Medicaid system aims to avoid fraud in situations where transfers of assets are made purposefully to avoid the Medicaid asset limits.  However, careful planning, long term and in a crisis situation with a Medicaid Trusts can legally and properly transfer and rearrange your assets to provide maximum protection. 

The Benefits of Medicaid Trusts

Low Cost

Unlike long-term care insurance, this kind of trust will not require a big expenditure to set up. Long-term care insurance only grows more expensive as you get older, and the prohibitive coverage restrictions mean that you can’t guarantee that you’ll be covered even if you decide to take on the cost. It will protect your assets and save you money in the long run.

Protect Assets from Spend Down

In order to qualify for Medicaid, you’re required to “spend down” your assets. An irrevocable Medicaid trust will allow you to hold on to these assets and get the assistance from Medicaid that you need. Your family members will be able to keep the precious heirlooms or valued assets after you’re gone.

Adhere to the Law

You want to protect your assets to ensure that they’re distributed according to your wishes. Unfortunately, unless you protect them with this kind of trust, failing to report these assets when it comes time to apply for Medicaid is illegal— in fact, it’s considered to be fraud. It gives you the protection you want in a legal and fiscally responsible manner.

Is This Right Fit For Me and My Loved Ones?

Close to three-quarters of Americans over the age of 65 will require some form of long-term care assistance at some point. Even though long-term care isn’t on the horizon for you right now, it’s likely that you’ll need it eventually. Why not prepare for the inevitable? Forming this specific trust will simply dissociate you from your assets, enabling you to get the assistance you need as soon as you need it— without losing the assets you hope to pass on to loved ones some day.

While long-term care insurance might sound like a safer bet, it’s a bet that will cost you a lot of money in the long run. Choosing this kind of trust will give you the protection you want without the hefty price tag that’s routinely attached to long-term care insurance.

How Do You Plan For End of Life For a Loved One in Hospice or Palliative Care

Looking for solutions for your loved one? Our free guide can help you in planning and managing legal affairs.

How Does a Medicaid Trust Work?

Transfer Assets to Trust

The Grantor (i.e., the person or persons to whom the assets belong) transfers the assets to a Medicaid trust. There is a five-year “look-back” window, in which you’re permitted to transfer assets to the trust or “sell” assets to family or friends for below market value prior to applying for long-term care. If you don’t transfer or sell your assets within five years before you enter a long-term care or assisted living facility, transfer of these assets might not be permitted.

Apply for Medicaid Assistance

Medicaid covers long-term care costs for people who do not have the funds available to pay for their own care. However, this coverage will only begin after the Grantor has completely depleted their assets. This kind of trust legally disassociates the Grantor from their assets so Medicaid coverage can begin.

Health Care and Long-Term Care Facility Costs

Medicaid will pay the costs associated with health care, ranging from doctor visits all the way to nursing home and at-home health care. This coverage will last until your death.

Distribution of Assets

After your death, your beneficiaries will be awarded all of the assets in your Medicaid trust. They will not be required to reimburse Medicaid or the long-term care facility or at-home care professionals.

What If I Need More Than a Medicaid Trust?

Obtaining the services of an experienced elder care attorney is a step in the right direction. An elder law attorney will help you navigate the challenges related to issues that arise as you and your loved ones grow older. The Ohio Center for Elder Law and Trusts specializes in Life Care Planning and Elder Care Planning, ensuring that our clients are properly cared for and their loved ones are protected in the event of their death. The Ohio Center for Elder Law and Trusts is a member of Elder Counsel, an organization that focuses on providing quality elder law education. When you’re ready to discuss the many challenges that accompany aging, let’s talk.

Would you like to start the conversation about Medicaid trusts and life care planning?

Talk to an expert. Call us at 614-310-3110 or fill out the form to schedule a consultation.

Best Time to Call