Sage-Tips

How can I avoid spending down assets for Medicaid?

The five-year look-back rule prevents you from transferring assets at the last minute in anticipation of the need to qualify for Medicaid benefits. When you apply, Medicaid will review your finances for the five-year period, preceding your application, looking for asset transfers made for less than fair market value.

How does Medicaid know what your assets are?

Required documentation to be provided by the applicant to verify assets might include checking, savings, money market, credit union, and certificates of deposit (CD) account statements, life insurance policies, deeds or appraisals for one’s home and other real estate, copies of stocks and bonds, deeds to burial plots.

Can you hide money from Medicaid?

“Hiding” assets by not reporting them on the Medicaid application is illegal and considered fraud against the state, with both civil and criminal penalties.

Can Medicaid check your bank account?

Furthermore, a Medicaid agency can ask for bank statements at any time, not just on an annual basis. Because of this look back period, the agency that governs the state’s Medicaid program will ask for financial statements (checking, savings, IRA, etc.) for 60-months immediately preceeding to one’s application date.

How do you protect your assets from nursing homes?

How to Protect Your Assets from Nursing Home Costs

1. Purchase Long-Term Care Insurance.
2. Purchase a Medicaid-Compliant Annuity.
3. Form a Life Estate.
4. Put Your Assets in an Irrevocable Trust.
5. Start Saving Statements and Receipts.

Can nursing homes take all your savings?

It’s the intent – not the reality – that protects the home. This means that, in most cases, a nursing home resident can keep their residence and still qualify for Medicaid to pay their nursing home expenses. The nursing home doesn’t (and cannot) take the home.

How much money can be gifted before Medicaid?

The $10,000 annual “limit” on gifts to one person (now $14,000 in 2016) is a rule of tax law and has no relation to Medicaid law. There is no legal limit on the amount of money a person can give away. A person can give away a million dollars if she wants.

Can Medicaid take your house?

A Simple Answer: As long as either the Medicaid beneficiary or his / her spouse lives in the home, Medicaid cannot take the home or force a sale.

How can I protect my money and house from Medicaid?

Option 2 of the top ten ways to protect your money and house from Medicaid or a nursing home is using an asset protection trust – continued from above . You don’t have to give up all control over your property if you put it into a Medicaid asset protection trust. However, you do have to give up something.

Can a Medicaid asset protection trust be used for assets less than $100k?

Given the fairly expensive fees associated with the creation of a Medicaid Asset Protection Trust ($2,000 – $12,000), they are typically not used for assets less than $100,000. Should a family need to reduce one’s assets to qualify for Medicaid in amounts less than $100,000 there are other approaches.

What are the income and asset restrictions for Medicaid?

The income and asset restrictions for Medicaid are s. Unfortunately, if your asset value exceeds $2,000 or your income level exceeds the state limit, your application will be denied. Your only option is to spend down your assets and manipulate your income (lawfully) until you qualify.

What happens to assets in a revocable trust on Medicaid?

If the assets are in a revocable (can be changed or terminated) trust, Medicaid considers the assets to still be owned by the Medicaid applicant. This is because the person who created the trust still has control over the assets held in the trust.