Everyone deserves to be able to age in dignity and comfort. Unfortunately, this does not come cheap, and the costs of in-home health services, assisted-living facilities, and nursing care can quickly deplete a lifetime of savings. While Medicaid can help cover these expenses, the program has strict financial requirements that leave many people out in the cold—even those who cannot afford care on their own and deserve a helping hand.
Fortunately, careful planning and guidance from an experienced Medicaid planning attorney in East Lansing can help you access these benefits without sacrificing the security of your assets. Contact Leydorf Law Firm, PLLC to learn more about what this entails and how we can help you enjoy your golden years to their fullest. Based in East Lansing, we serve the entire region, including Williamson, DeWitt, and Grand Ledge.
Medicaid planning refers to the legal strategies and tools that can help an individual or couple meet the asset and income requirements for Medicaid eligibility. Medicaid provides benefits that can help cover the costs of long-term care, including home health services. However, because Medicaid operates as a need-based program, applicants must have assets and income that fall below specific income and asset thresholds. Medicaid planning conducted with the assistance of an experienced lawyer from Leydorf Law Firm, PLLC allows East Lansing residents to meet those requirements while also allowing certain assets to pass on to family members.
Effective Medicaid planning should take into account the effect of the program’s five-year lookback rule. Under this rule, Medicaid will count any assets that a person has sold or transferred for less than fair market value in the five years before their application as part of their estate. Thus, assets subject to a non-compliant transaction may trigger a penalty, which can delay the start of Medicaid benefits and require individuals or couples to pay for long-term care expenses out of pocket.
Generally, Medicaid will take assets from a recipient’s estate after the recipient passes and sell them in order to recoup some of the costs of providing that person with benefits. The goal of Medicaid planning is to help an individual or couple qualify for Medicaid while also protecting certain assets from being used to reimburse the program upon their deaths. This can be done through a variety of strategies, including the following.
The term “Medicaid trusts” refers to specific types of trusts designed to reduce the assets in a Medicaid applicant’s estate while also protecting certain assets. In this legal arrangement, the person creating the trust, known as a settlor, places assets into the custody and management of a trustee, who must manage and distribute the assets according to the terms of the trust document and applicable Medicaid laws and regulations.
Any equity above the state exemption limit that a Medicaid applicant owns in their primary residence also counts towards the Medicaid asset limit. As such, the homeowner may want to separate themselves from the property’s value, which they can do by transferring ownership rights to the home through a life estate deed. This arrangement allows the former homeowner to continue living in their residence for the rest of their life, though the home is no longer an asset they can pass along to their heirs. Life estate deeds must comply with the five-year lookback rule.
Michigan also allows homeowners to protect their primary residences through Lady Bird deeds. A Lady Bird deed creates a life estate for a Medicaid applicant, who retains ownership of their home, and may continue to live in the house for the rest of their life. Upon their death, the Lady Bird deed automatically transfers ownership of the home to the named beneficiary, usually a surviving spouse or an adult child. Lady Bird deeds differ from traditional life estates because the Medicaid applicant retains ownership of the home, which also means that the Lady Bird deed does not need to comply with Medicaid’s five-year lookback rule.
Medicaid rules permit an applicant who wishes to move into a nursing home to transfer their primary residence to a healthy adult child who has resided with the applicant and cared for them for at least two years before their admission to the nursing home. The rules also allow an applicant to transfer their home to a sibling who shares an ownership interest in the property and has lived in the house for at least one year before the applicant’s admission to a nursing home.
An applicant can use countable assets to purchase a Medicaid-compliant annuity, which generates monthly payments that typically go to the applicant’s healthy spouse (i.e., one who is not receiving Medicaid benefits). However, an unmarried individual may also purchase an annuity whose payments will not exceed Medicaid’s income limit.
Medicaid regulations allow applicants to reduce their countable assets by spending them on qualifying expenses, such as the cost of installing disability accommodations, the purchase of medical devices and equipment not covered by insurance or Medicare, or to pay off a mortgage on a primary home.
When only one spouse in a married couple applies for Medicaid, the program’s regulations permit the healthy spouse to take certain exemptions from the couple’s income or countable assets, ensuring they can continue to support themselves financially. These exemptions may also reduce the applicant-spouse’s resources, which can help them meet the eligibility thresholds for Medicaid.
A carefully crafted Medicaid plan can help you to qualify for benefits and protect your assets, but creating one is no simple matter. To be safe, you’ll want experienced legal counsel to help you navigate complex state and federal regulations and to create enforceable legal documents. Turn to Leydorf Law Firm, PLLC to get help from a compassionate Medicaid planning attorney in East Lansing. Here’s why you can trust us with this important task:
Do you anticipate needing long-term care? If so, hiring experienced legal counsel for Medicaid planning can help you develop an effective legal strategy to address your needs. Contact Leydorf Law Firm, PLLC today for a confidential consultation with a compassionate and experienced Medicaid planning attorney in East Lansing. We look forward to meeting you, getting to know your concerns and goals, and helping you craft a plan to meet them.
Nick Leydorf is ready to help you with estate planning and elder law. Let Leydorf Law Firm, PLLC put our experience and diligent legal representation to work for you. Contact us today to learn how Leydorf Law Firm, PLLC can help you.
It’s never too early to get your plans in order. If you’re ready to plan for your future and protect your loved ones, reach out to Nick today to arrange your initial consultation with an estate planning attorney in East Lansing.
