onfused about what can be protected financially

M5M

We went to a CELA we heard speak at our local Alz Association.  I took with us our 20 year old will, trust, for review.  He said 3 things:

1. Put your house in the will since it is currently not, that will avoid probate for it.

2. Go back to original attorney ( they know each other, so I guess that was a positive input, but the original attorney is not CELA)

3. "If nursing/memory care is needed, you have the means to pay for it.  He quoted approximate cost for our area and said you can pay that every month, so that is what you will pay.  If the cost is above that, Medicaid will kick in."

I was under the impression that moving some assets can shield them from being counted in our ability to pay. What am I missing here?

We are going to see the original attorney soon. 

toolbeltexpert

M5m I was under the same belief, but Medicaid wants us broke. I am doing a spend down and hoping to be able to downsize and help fund my dw care. It isn't like I was prepared for this financially, so I am doing the best I can.  I really love the place where my dw, is its personal pay only. They do have Medicaid sn beds anyway. I quit stressing over this I made a plan that has different options as I go forward, so now it's just a matter time. 

I have yet to make a will, that is next on my to do list of financial things.

Joe C.

M5M, First everyone situation is different and the laws of what you can protect and how you do that are different in every state. In my state, MA, the house is protected as long as the custodial/well spouse is living it. The problem is none of us have a crystal ball and we do not know if we will need long term care down the road. Since we have children and would like to leave something for the the only option in MA is to put the house in an irrevocable trust. Other liquid assets have to be spent down to about $140K before you can qualify for Medicaid. There is an option to protect some funds in what MA law refers to as a Medicaid Trust but I’m not at that point yet so I’m not sure how that works.

My advice is to speak with a couple attorneys who is a CELA and see if they make the same recommendations. I my area I found they the CELAs with give you 1 hour free to review documents & make recommendations. I interviewed 5 CELAs and actually found dramatically different pricing and advice. Beware of attorneys who are pushing the “one size fits all” package and find the one who listen to you and tailors a package to your unique situation.

Ed1937

M5M wrote:

 He quoted approximate cost for our area and said you can pay that every month, so that is what you will pay.  If the cost is above that, Medicaid will kick in."

Do you think it's possible that you didn't understand what he was telling you? I'm not an attorney, but I'm pretty sure Medicaid will not pay unless you meet the criteria to qualify. Joe's post is right on the money. States do differ in qualification criteria, but certain things are standard, like spend down requirements. 

"I was under the impression that moving some assets can shield them from being counted in our ability to pay. What am I missing here?". You are not missing anything. Certain assets can be  manipulated so they are not counted as assets when it comes to qualifying for Medicaid. A CELA or Medicaid attorney will be able to help you here.

ghphotog

I spoke with a Medicaid attorney recently. She said the same thing. Medicaid will do a financial snapshot, I don't remember if we need to spend down before or after the snapshot, probably doesn't matter. I have the information at home I just need to review it. She said I will have to pay for at least 30 days out of pocket for either a nursing home, (correction, the nursing home would've be covered by Medicare if it's medically necessary) or I pay out pocket the first month of MC if my wife has never been in a NH or rehab for over 30 days prior.
I can keep 137,000 plus the house and one car is all I will be left with to live out the rest of my days. That's not much. But after the snapshot is done  the attorney said Medicaid will never take a second snapshot and I can reinvest, go back to work, etc.
She did say after the spend down and snapshot, put everything that's left in my name only including the house. We cosigned a lot of docs through the years.
We can spend down that money doing home repairs, vacations, pretty much anything but gifting it. I guess because it can be "gifted" back and Medicaid won't allow that.
When it's time the attorney will contact Medicaid on my behalf. She said she's never had Medicaid reject her applications.

Or I can gamble that I can take care of my wife by myself until almost the end. If my wife may not live a year or more then I would save a lot of money paying for a year out of pocket for MC rather than doing the spend down. It seems like a gamble.
We have some savings but MC will eat that up in a few years. One way to spend down I guess so either way.

Crushed

There is an incredible amount of confusion here

eg I can keep 137,000 plus the house and one car is all I will be left with to live out the rest of my days

NO   but
 If you don't put your state in your profile I cant help

becomes important between legally married couples where one spouse desires Medicaid and requires institutional care (skilled nursing facility / nursing home);  and the other spouse is relatively healthy (referred to as the “Community Spouse”) and does not desire Medicaid.

In this situation, there are laws in place that are designed to prevent the well / community spouse from being forced into poverty due to the very restrictive asset and income Medicaid qualification standards.

Typically, the Medicaid / institutionalized spouse’s monthly income goes to the facility handing his/her long-term care needs, less a "personal needs allowance" ($130.00 / month as of January 2022). The Medicaid recipient’s contribution (i.e. co-pay) is known as “cost of care” or "patient responsibility."

But, a portion (or all) of a Medicaid recipient’s income can be diverted to the community spouse (thereby reducing their cost of care) if the community spouse does receive enough income to cover certain living expenses. This is referred to as the "monthly maintenance needs allowance."

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Jella417

Keep in mind a will is only your wishes. With only a will the estate must go through Probate and a judge will decide how everything is divided. This allows family members to argue what the will says and again, a judge decides and can decide to do something completely different than the will dictates. 

I’ve been to an estate planner. Medicaid will look back 5 years when you apply so it’s important to get everything squared away immediately so you have 5 years from the snapshot date. We did everything immediately upon diagnosis but I cannot be certain we won’t need assistance within 5 years. No way to know how fast it will progress, time will tell. I have to work full time so I’m afraid the chances my DH can make it 5 years without needing some kind of daily supervision/help are slim. 

Ed1937

Under the 5 year lookback period (I think NY is 3 years), they will look back to that amount of time to see if you gifted anything, which is not acceptable. This means you cannot give your children or anyone else money or other assets because you would rather have it go to them than the government. If they find gifting, it can complicate things, and it must be repaid before they can be accepted for Medicaid.

Jo C.

Hello M3M; it is important to know that laws regarding Long Term Medicaid is different from state to state.  There are also two different kinds of Medicaid.  One is regular Medicaid medical insurance for physical health needs and it does not cover Long Term Care; and then there is Long Term Medicaid which covers long term care in a facility IF the person fulfills special Medicaid criteria for that state AND IF the facility has a contract with Medicaid.  What you are interested in, is LONG TERM MEDICAID.

If you go online to Mr. Google to research this topic, be SURE to use the current year - I would use 2023, AND the term Long Term Care Medicaid AND your state's name.  If you get old information it may well be no longer in place and you need the Long Term Care Medicaid, not anything else and it must be only for your specific state.

I know this all seems very complex, but I think you may have accidentally misunderstood some of what was presented in that meeting.   NOTE:  A Will simply outlines your personal wishes AND Wills go to Probate.

If you put your house and other assets into a Trust, THAT is the vehicle that keeps you from Probate. Big difference.

Financial accounts go into the Trust except for certain annuities or IRAs, 401s or 403s, they do not go into the  Trust; and are handled differently.  We did our  Revocable Trust and our house and all belongings and all financial accounts were placed in the TRUST except for our IRAs and 401.  That was kept outside the Trust per our Estate Attorneys advice and per laws as they are set up at this point in time. 

As for Medicaid Long Term Care coverage, there is no automatic coverage that steps in if you come up short.  First; one must be in a facility that has a contract with Medicaid; not all do - some facilities are Private Pay only. AND one must make an application for Medicaid Long Term Care AND fit the criteria for said coverage and be approved for Medicaid Long Term Care if criteria is met. 

If a person fits criteria for Medicaid Long Term Care BUT has a bit too much income, many states (but not all) have the ability to do a Miller Trust or Qualified Income Trust (same things); this sort of Trust is NOT the same as a regular Estate Trust, it is only a very small Trust for Medicaid Long Term Care using the monthly income. In this, Medicaid makes up shortfalls.  You can look this up and learn about it for future knowledge.

It is best to seek the advice of a CELA qualified attorney; if you use a separate Estate Attorney for your Estate Trust, then the two of them can consult with the other re your needs as appropriate.

As for a monthly, "Personal Care Allowance" that Crushed mentions, that is the money that a person in a care facility with Medicaid as a payor can keep for personal needs items like soap, shampoo, haircuts, etc. His link and figure is from the State of Florida and is a very generous amount allowing $130 a month.  In our state, which is California, the monthly Personal Care Allowance is, $35 a month. Huge difference and each state can have different amounts.

Please note that we here are not CELA attorneys or qualified Estate Attorneys; please do get professional advice one on one with your attorney specialist(s), this will steer you in the right and safe direction in the year 2023.

I send best wishes your way, this will all work out just fine with your attorneys advice.

J.

jfkoc

From Google;

• You cannot put your individual retirement account (IRA) in a trust while you are living. You can, however, name a trust as the beneficiary of your IRA and dictate how the assets are to be handled after your death. This applies to all types of IRAs, including traditional, Roth , SEP, and SIMPLE IRAs.

JoseyWales

I just want to add - don't listen to any of us.

I went to a CELA and got advice just after DH was diagnosed. I went for 4 years thinking I had things under control. Went to place DH and found out I hadn't taken care of finances as well as I could have. The first CELA I used gave me the same advice I usually hear here - spend down, no gifting, track money, etc. I then talked with a different CELA - who cost a lot more - and he protected all our retirement savings, no spend down and lots of other stuff I would have never imagined needed to be done. He was well worth that extra money I paid and I'm left in a much, much better financial position that I imagined at the start. I imagined I'd be broke. I'm not rich, but I'm not broke.

BUT each state is different. Each person has a different situation. Contact a few attorneys and find out what each of them say.

Ed1937

I think Josey's post is very important. Josey and I are in the same state, and the CELA I chose did all the things hers did to protect our assets as best he could. Checking with more than one CELA is good advice, as one of our members checked with different ones, and found a large difference in price for basically the same services. You might even get recommendations from a local caregiver's support group, but you'll have to ask for input. Just remember a CELA is what you want, not an attorney who handles all kinds of cases.

M5M

Oh, my gosh! A big THANK YOU to each with your various bits of wisdom.  I think I am going to print out the replies and add to my Alz notebook, so I can reread and be sure I get this right. 

I am in Texas and have come to realize I need to put my state of residence in my profile, apparently.  

One person pointed out my misstatement about "house in the will".....the house needs to be in the trust, not the will...I intend to address that with the attorneys when we go. 

DH and I are working on financial things together, although its such a challenge for him to follow the conversations.  I think it affirms his value to our marriage as things change. 

I have another question -about travel-I will post it separately, and look forward to some great advice there, too.  

Jella417

I completely agree to not just take advice here. Speaking to an attorney is a must. You’ll need an attorney who is certified in Medicaid law. The first Probate law attorney we spoke to insisted on this, explaining that Medicaid laws change frequently and only someone who specializes in it will be up to date on the current laws. Good luck.

LisaOA

I'm 56 and still working and am trying to maximize my IRA and 403b contributions. I'm not sure but I think $ in plans designated for my retirement are not factored into the asset count when determining how much we will have to spend down.

MaryG123

I found this helpful medicaid planning website.  Has anyone used the consultant finder function?  It appears to be an organization rather than private, but I’m not sure.

https://www.medicaidplanningassistance.org/types-of-medicaid-planners/