As the top-rated estate planning lawyer in Montgomery County, PA, I hear plenty of common misconceptions about Medicaid, including what qualifies you, and how it might affect your personal assets. Let’s take a look at some of these misconceptions, dispel the rumors, find out the real truth, and see how it can affect you and your loved ones.
1. I cannot qualify for Medicaid if I give things away.
Consulting with an elder law attorney before transferring assets is the best way to avoid confusion. Generally, there are penalties for transferring assets, but there are certain exceptions to the rule. An elder law attorney can advise you what you are allowed to do based on your unique circumstances.
2. I will not be eligible for Medicaid for five years if my assets are given away.
Medicaid recognizes presents given to you within the last five years. Part of the Medicaid application requires answering whether you have made transfers to another person within the past five years before applying. An individual will receive a penalty if a transfer has occurred during this lookback period. An experienced elder law attorney can help to explain your rights and how the program works.
3. I am only able to receive Medicaid if I spend all of my money.
This is not an accurate statement. People who are both single and married are allowed to have specific assets and still qualify for Medicaid. Assets that are permitted are pre-paid funerals, household furnishings, one vehicle, and the family residence if the applicant or spouse of he or she still lives in the residence. A spouse can keep up to $126,420, and a single person can keep up to $2,000. An experienced Elder Law attorney can assist you in leveraging the protected assets and increasing the value of what you can protect.
4. I can only spend my assets on medical or nursing home bills.
Spending down for Medicaid eligibility is an art. There are ways to spend down your resources so that your spouse (or some limited other beneficiaries) can benefit and you can leverage specific resources to save more than the published numbers.
5. If I am already living in a facility, it is not beneficial to start Medicaid planning.
Assets can still be protected if a person is already residing in a facility. An individual can leverage allowances under the law and save more assets than one would think.
6. Once my spouse gets Medicaid, my personal retirement assets are secure.
Your assets are not secure just because your spouse received Medicaid, but guidance from elder law can assist in financial planning for a stable lifestyle.
7. If a living trust owns my personal assets, nursing homes cannot access them.
If a living trust owns assets, these assets are not protected from nursing home costs. A living trust owning assets can even jeopardize assets that otherwise would be protected. Different kinds of trusts can be utilized as protection for assets under certain circumstances.
8. Under Medicaid, I can give away money each year.
Under federal tax rules, an individual can give up to $15,000 a year per donee without needing to file a federal gift tax return. If the price of a gift exceeds $15,000, a gift tax return needs to be filed. However, Medicaid does not allow gifts of any amount; there are restrictions. To avoid penalties, contact an elder law specialist to learn more information.
9. My entire income must be used for my spouse’s nursing home bill.
Once a spouse is eligible for Medicaid, Medicaid does not consider the income of the community spouse. Sometimes, the Community Spouse is allowed to share some or all of the institutionalized spouse’s income.
10. I can file a Medicaid application by myself or with the assistance of a facility member.
Nursing homes have staff that will file a Medicaid application for you. These nursing home members usually do not review the information, highlight problems, or address them with the Medicaid agency in your state. If the application is denied, they will not remedy the issue. Even if the denial is the fault of the nursing home, they are not responsible for fixing it. When the application is denied, you will be liable for paying the nursing home at their normal billing rate until a Medicaid application is approved.
Hiring a Medicaid attorney in Chester County, PA, to complete your Medicaid application is the best option. Slutsky Elder Law will review the information, address any issues, and resolve them prior to denial.
For more information on common Medicaid myths, contact us today!