Our firm recommends long term care insurance to help pay for their long term needs. Unfortunately, long term care insurance has only started to become popular in the last few years and many people facing a nursing home stay do not have this coverage.
Medicaid has become the long term care insurance of the middle class. Because Medicaid is a welfare program, to receive Medicaid benefits you are required to pass certain tests on the amount of income and assets that you have.
Medicaid Resource and Income Allowance
A single individual can have no more than $2,000 of countable assets in their name. A married couple can have no more than $111,560 of combined countable assets ($109,560 for the at home spouse and $2,000 for the nursing home spouse). The Medicaid applicant's income cannot exceed $2,022.
Medicaid also establishes a monthly income floor for the community spouse. This is called the Community Souse Maintenance Need Allowance. This permits the community spouse to keep a minimum monthly income of $2,739. A Dependent Family Member Maintenance Needs Allowance is $1,822. There is also a $50 allowance for the Medicaid applicant's personal needs.
What You Can Keep and What Must Be Spent
To qualify for Medicaid, applicants must pass fairly strict tests on the amount of assets they can keep. To understand how Medicaid works, we first need to review what are known as exempt and non-exempt (or countable) assets. Exempt assets are those which Medicaid will not take into account for eligibility. It is important to remember that although exempt assets do not affect eligibility, Georgia may exercise its rights under Georgia's estate recovery provisions and recover, at the recipients death, against the exempt assets the costs expended on behalf of the Medicaid recipient. (OCGA A? 49-4-147.1).
What You Can Keep (Exempt Assets)
The following are some examples of exempt assets: 1.The Home (with an equity value of $500,000 or less) 2.The home must be the principal place of residence. The nursing home resident may be required to show a written statement of "intent to return home," even if this never actually takes place. 3. Household and Personal Belongings such as furniture, appliances, jewelry and clothing. 3. One automobile. 4. Burial Exclusion Amount - $10,000 per person will be excluded. The burial exclusion amount includes the value of a prepaid burial contract. The face value of life insurance and any funds set aside for burial.
What You Can't Keep or What You Must Spend (Countable Assets)
Other assets are generally non-exempt. Basically, all money and property, and any item that can be valued and turned into cash, is a non-exempt asset. This may include:
- Cash, savings, and checking accounts, credit union share and draft accounts
- Certificates of deposit
- U.S. Savings Bonds
- Nursing home accounts
- Trusts (depending on the terms of the trust)
- Real estate (other than the residence)
- Boats or recreational vehicles
- Stocks, bonds, or mutual funds
- Land contracts or mortgages held on real estate sold
Where can you turn for that help? It is difficult for the consumer to be able to identify lawyers who have the training and experience required to provide expert guidance during this most difficult time.
Nursing home planning and Medicaid planning is an aspect of the services provided by elder law attorneys. Consumers must be cautious in choosing a lawyer and carefully investigate the lawyer's credentials.
In general, a lawyer who devotes a substantial part of his or her practice to long term care and asset protection planning should have more knowledge and experience to address the issues properly. Consider what memberships the lawyer holds in applicable professional associations. How many new cases the law office handles each month. There is no correct answer. But there is a good chance that a law office that assists with two cases a month is likely to be more knowledgeable than an office that helps with two cases a year. If the lawyer lectures to the public, attend a lecture.
Additional resources provided by the author
In general, a lawyer who devotes a substantial part of their practice to long term care and asset protection should have more knowledge and experience to address the issues properly. Consider what memberships the lawyer holds in applicable professional associations (i.e. American Academy of Estate Planning Attorneys at www.aaepa.com and National Academy of Elder Law Attorneys at www.naela.com).
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