MEDICAID & SPECIAL NEEDS
Many times individuals will require long term care. This can be long term nursing home care, home health care or other services.
To determine eligibility for many of the programs there is a means test. This means that the programs will look to whether the individual is earning under a certain amount and and has less that a certain amount in assets to be eligible for Medicaid and other related programs. It is important to plan well in advance to structure your finances to ensure you get the the maximum possible services
Medicaid planning is the legal process of arranging your property so that your assets go to your family (or other people or organizations that are important to you), rather than to pay the nursing home bills that Medicaid is set up to cover. The best time to do Medicaid planning is well before entering the nursing home, when time is on your side and choices abound, but it’s never too late to plan.
New York Medicaid Eligibility
New York, like most states, allows a single applicant to own only $15,450 (in 2019) in non-countable assets (a primary residence and some other assets don’t count) in order to be financially eligible for Medicaid. Other examples of assets that don’t count toward the $15,450 are certain life insurance policies and prepaid funeral and burial plots.
Setting Up an Asset Protection Trust
To ensure that one will be eligible for Medicare to pay for potential long term care it is important that
a Persons Assets is transferred to an Asset Protection Trust. There is both requirements as for how much assets one can own as well as how much income one can earn. By having ones income paid out to a Trust it will insure that the individual stays below the threshold required to be eligible for Medicaid
The 5 Year Lookback Period
This is an important example of why careful estate planning is critical. To be eligible for Medicare to fund long term care individuals transfer their assets to a Trust formed for that purpose. However if the assets are transferred less than 5 years prior to applying for Medicare coverage for long term care there can be stiff penalties. hence it is prudent to transfer those assets well in advance of such an event.
When an individual applies for nursing home Medicaid coverage, one of the key issues to consider when preparing the Medicaid application is whether any gifts or transfers by the applicant were made during the last five years. Medicaid requires applicants to disclose all financial transactions that occurred during the five years prior to the submission of the nursing home Medicaid application. This five-year period is known as the “look-back” period.
Special Needs Trust
In certain circumstances there is an incapacitated person (ie an individual with special needs) that requires potentially costly long term services. To be eligible for means tested government funding for these services it is important for that individual stay under a certain income and asset threshold. By setting up a Special needs Trust for that individual it is a great way to provide for that individual without disqualifying the special needs individual from critical government funding.
A special needs trust, also known in some jurisdictions as a supplemental needs trust, is a specialized trust that allows the disabled beneficiary to enjoy the use of property that is held in the trust for his or her benefit, while at the same time allowing the beneficiary to receive essential needs-based government benefits
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