Medicaid Planning

When an applicant is armed with knowledge of the Medicaid ICP rules (or employs Michael T. Heider, P.A. as their counsel) there are numerous planning strategies which can help preserve large amounts of their assets.

Of course planning strategies are specific to each applicant's particular situation.   Feel free to contact the Law Office of Michael T. Heider, P.A. for a free consultation today!

Income Planning Opportunities

Scenario #1 - Married Applicant with Annuity

Bill owns an annuity which pays him $600 per month in income.  Bill needs to go into the nursing home.  His wife receives over $2,000 per month in income.  Bill transfers the annuity to his wife.  Since the non-applicant spouse can have unlimited income, the $600 will not be counted against her and will not be forfeited to pay for Bill's nursing home.

Scenario #2 - Married Applicant with Rental Property

John and Susan own a vacation home in Ft. Meyers.  Susan is in need of nursing home care.  In the current real estate market, selling the house would result in a very low sales price.  Additionally, the funds would put John over the allowable asset limit ($109,560).  Instead they find a tenant who will pay a reasonable monthly fee.  Accordingly, the rental property will not be counted as an asset and the income can be given to Susan after transferring the house into Susan's name.  The transfer was accomplished under a Durable Power of Attorney.

Asset Planning Opportunities

Scenario #3 - Single or Married Applicant with Excess Assets

Steve and Amanda have $250,000, or about $140,000 over the allowable amount for Steve to receive Medicaid ICP benefits.  Their daughter, Jennifer, routinely helps them as a good daughter should (takes them to the doctor, cleans, cooks, etc.)  For these services, Jennifer may be paid a reasonable fee for that.  So long as Jennifer's payment is based on the actuarial life expectancy of Steve, then the money transferred to Jennifer would not disqualify Steve.  However, the payment would be considered income to Jennifer and subject to taxation.  Additionally, this strategy requires a valid Personal Services Contract.  This strategy can work for married or single applicants.

Scenario #4  - Single or Married Couple with Excess Assets

Medicaid ICP has a three year look back period (this is expanding to five years under the Deficit Reduction Act of 2005).  An applicant could gift all of their assets to a child or trust and wait for the look back period to pass.  So long as the applicant has no retained interest in the assets, the funds will not be counted against the applicant and there will be no disqualification period.   This requires advanced planning and relinquishment of asset control, which is not always a very attractive option.

Scenario #5 - Single or Married Couple with Excess Assets

An applicant may purchase a rental property to shelter excess assets.  For example, Adam, a single applicant has $300,000 in assets.  He is allowed to only have $2,000 and still qualify for Medicaid.  Adam could purchase a rental property for $300,000 and just give up the income on the property each month.  Further, the property can be titled so that it passes directly to his heirs when he passes, rather than being subject to probate and possible Medicaid recovery liens.

Please note: The scenarios presented on this page are very general and can vary depending on the specific facts of each applicant.  Please contact Michael T. Heider, P.A. for a free consultation concerning your situation.