Estates & Trusts, Asset Protection Planning, Wealth Preservation
Tax, Probate & Guardianships

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Where a loved one is either currently requiring long-term care (“LTC”) or on the verge of needing LTC; whether at home care, assisted living or a nursing home there are still planning opportunities available even though the 60-month look back for Medicaid will apply.  It is important that if the loved one lacks mental capacity then there must be a Durable Power of Attorney (“DPOA”) in place that allows the agent to undertake the steps necessary to engage in planning (e.g., having the ability to make gifts or enter into contracts on behalf of the principal).  If there is no DPOA, then a guardianship must be sought. 

Potential planning opportunities in a crisis situation include but are not necessarily limited to:

  1. Increasing the Community Spouse Resource Allowance. 
  2. Increasing the MMMNA. 
  3. Spend Down
    1. Prepaid Funeral;
      1. Must be an irrevocable prepaid funeral.
      1. Any excess fund must be paid to the State to reimburse for Medicaid benefits.
    1. Home Improvements;
    1. Purchase a car; and
    1. Purchase of household goods and personal effects.
  4. Purchase a Medicaid Compliant Annuity;
  5. Creation and funding of a Special Needs Trust. 
  6. Creating and funding of a Miller Trust. 
  7. Promissory Notes 
  8. Caregiver Agreements

Spousal Anti-impoverishment Provisions

In order to cause the non-institutionalized spouse (i.e., the spouse not needing nursing care) to have to become “poor” in order for the spouse needing long-term care to qualify for Medicaid, in 1988 Congress enacted certain spousal anti-impoverishment provisions, one of which is Community Spouse Resource Allowance (“CSRA”). Click here to learn more about CSRA.

First off, the CSRA only applies to the resource test and not to the income test when determining Medicaid eligibility.  As such, the non-institutionalized spouse is able to retain all the non-countable (or exempt) resources such as the home, a care, household goods and personal effects.  For purposes of the income test, the general rule is that whoever’s name is on the check will have that income counted against the income threshold (the 2021 amount is $2,382.00) for purposes of determining Medicaid.

In addition, there is a minimum monthly maintenance needs allowance (“MMMNA”).  The MMMNA may entitle the community spouse to retain a certain amount of the institutionalized spouse’s income in order to satisfy their monthly bills.

The above items are merely potential planning opportunities in a crisis situation and are meant for educational purposes only.  We urge you to contact our office to discuss your specific facts and circumstances.

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