Med­i­caid plan­ning

The Palm Beach Post - - BUSINESS - WEALTH MAN­AGE­MENT Keith Singer, JD CFP

Florida res­i­dents are el­i­gi­ble for free health care and nurs­ing home ser­vices if they pos­sess only lim­ited re­sources.

For Florida res­i­dents, non-ex­empt as­sets must be be­low $2,000 to qual­ify. Ex­empt as­sets in­clude one’s home, per­sonal be­long­ings, house­hold fur­nish­ings, an au­to­mo­bile, ir­re­vo­ca­ble burial trusts and cer­tain in­come-pro­duc­ing real es­tate. Any­one who is in­cur­ring sub­stan­tial health care and med­i­cal ex­penses will even­tu­ally be­come el­i­gi­ble for Med­i­caid once they spend down their as­sets.

If you try to di­vest your­self of as­sets by giv­ing your as­sets away to your chil­dren, Med­i­caid has a five-year look back that would ex­clude the ap­pli­cant from el­i­gi­bil­ity for five years from the date of the gift. How­ever, some peo­ple do trans­fer as­sets to an ir­re­vo­ca­ble trust as early as pos­si­ble in or­der to even­tu­ally gain Med­i­caid el­i­gi­bil­ity and still main­tain at least some lim­ited con­trol over the as­sets.

Nev­er­the­less, many peo­ple would like the op­tion of be­com­ing el­i­gi­ble for Med­i­caid with­out spend­ing down all of their as­sets or giv­ing them away be­cause they would not only like to re­ceive nurs­ing home ser­vices from Med­i­caid but they would still like to leave their chil­dren an in­her­i­tance. There­fore, Med­i­caid plan­ning may in­volve the con­ver­sion of non-ex­empt as­sets to ex­empt as­sets. For in­stance, one could move to a more ex­pen­sive home, buy burial plots for fam­ily mem­bers or even in­vest in in­come­pro­duc­ing real es­tate.

Mar­ried cou­ples have some plan­ning op­por­tu­ni­ties be­cause as­sets may be trans­ferred from the ap­pli­cant spouse to the non-ap­pli­cant spouse in or­der to make one spouse el­i­gi­ble. The spouse of some­one who is ap­ply­ing for Med­i­caid is al­lowed to own up to $123,600 of nonex­empt as­sets with­out dis­qual­i­fy­ing the ap­pli­cant spouse. With proper plan­ning and fore­sight, it’s pos­si­ble to be­come el­i­gi­ble for Med­i­caid to pay for nurs­ing-home care with­out hav­ing to spend down all of one’s as­sets.

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