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Medicaid Asset Protection Strategies: Fact and Fiction

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Medicaid myths and misunderstandings about long-term care coverage and Medicaid asset protection are abundant. The belief that individuals with significant financial means will never need Medicaid coverage and the idea that all assets must be exhausted before Medicaid coverage becomes an option are among these fictions.

Private payment of long-term care can quickly exhaust substantial financial resources, as mentioned in the first blog of this six-part series. But there are legal and ethical ways to preserve resources that allow the person in need of care and the remaining spouse or family to retain a quality standard of living.

Spousal considerations for long-term care patients receiving Medicaid benefits were the topic of the previous blog in this series. This article will focus on ways families can take action, preferably in advance, to protect family assets from Medicaid spend down and eligibility requirements.

Medicaid is a federal program that is administered by states. West Virginia (WV), Kentucky (KY), and Ohio (OH), as well as other states, have state rules that apply to Medicaid recipients and their families. A Medicaid planning attorney in WV, KY, or OH can help you identify Medicaid myths and provide the most accurate guidance as to rules and regulations that apply to residents in the Huntington, WV tristate area.

Medicaid Myths and Medicaid Asset Protection

Common, harmful myths related to Medicaid and asset protection include the belief that people who seek to protect their assets are greedy or that children of parents in need of long-term care are acting only in the best interest of their inheritance.

In fact, Medicaid asset protection is intended to secure income and assets for the duration of a person's life for the purpose of ensuring quality of life for the individual in question as well as for a spouse and other family members. A Medicaid planning attorney in WV, KY, and OH can help you and your family determine what financial strategies are ethical, legal, and best suited for your specific situation.

Use of Trusts in Medicaid Asset Protection

One important aspect of Medicaid and asset protection is determining what income and resources are exempt or non-exempt from Medicaid eligibility evaluation and spenddown or reimbursement requirements. Trusts can fall into either category, depending on the way the arrangement is structured.

In a revocable trust, the owner or creator of the trust retains control of the assets in the trust. Therefore, revocable trusts are typically subject to Medicaid evaluation and regulations.

Irrevocable trusts, trusts over which the creator does not have control but that grant such authority to another trustee, can be exempt from Medicaid asset calculations when properly established. This type of trust can protect assets and ensure your long-term care when structured appropriately. A Medicaid planning attorney in WV, KY, and OH can assist families in the tristate in establishing these trusts within the legal framework of state and federal laws.

Medicaid Myths: Asset Transfers

Among the many Medicaid myths is the notion that asset transfers are illegal under federal statute. While there can be penalties such as delays in eligibility associated with the transfer of assets by individuals applying for Medicaid, there are options available. Consultation with a qualified estate planning attorney can help potential Medicaid recipients evaluate the pros and cons of the various asset transfer possibilities.

One way an attorney can help is to ensure that your power of attorney documents are properly drafted and executed. Mistakes in the specifics of the authorities granted can make a difference in the details of how a person's estate may be managed and dispersed.

When asset transfers are part of your estate and elder care plan, care must also be taken to understand filial responsibility laws and how these law affect family responsibility for nursing home care payments.

Medicaid Asset Protection and Filial Responsibility

WV, KY, and OH, along with many other states, have laws in place that allow long-term care facilities to attempt to recoup costs of a parent's care from adult children. While this is not a common practice, lawsuits have even been filed, and won, to recover debts from adult children whose parent required long-term care.

Filial responsibility laws are old laws that predate the existence of Medicare, Medicaid, and Social Security. As these programs came into existence, filial support laws basically became dormant in states where they were not repealed. However, with medical and long-term care costs soaring and facilities receiving less in payments from government programs, there have been cases of companies using these laws to assert family responsibility for nursing home care.

In some of these cases, though not all, fraudulent financial conduct or inappropriate asset transfers were the fault that allowed the care facility to claim family responsibility for nursing home care. This is another reason consulting a Medicaid planning attorney in WV, KY, or OH is advised for families considering long-term care options.

Medicaid and Asset Protection: What Is Estate Recovery

In additional to planning elder care to prevent claims of family responsibility for nursing home care, an estate plan should also consider the possibility of Medicaid seeking expense recovery through the estate after a Medicaid recipient's death.

In fact, federal law requires state Medicaid programs attempt to recover some of the costs of care. When a recipient is over the age of 55 and has received care in a nursing home or home-based long-term care services, states must attempt to obtain reimbursement for related expenses. Trusts in an estate can even be accessed to reimburse these costs under certain circumstances.

Don't let Medicaid myths prevent you and your family from making the best decisions possible regarding Medicaid and asset protection. A Medicaid planning attorney in WV, KY, and OH can assist families in structuring estate and elder care plans in a way that best protects the assets of the family and assures the highest level of care and quality of life if a family member requires long-term care.

If your family would like to discuss Medicaid asset protection strategies with an experienced, compassionate attorney, contact Anna M. Price at Jenkins Fenstermaker, PLLC at (304) 523-2100, toll-free at (866) 617-4736, or complete her online contact form today.

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