“Can’t I just put Mama’s assets in a trust and then apply for Medicaid?”
We hear this question maybe weekly. Unfortunately for these families, qualifying for Medicaid is not that easy.
Medicaid Asset Limits
In Georgia, you cannot own more than $2,000 of countable assets to be eligible for nursing home Medicaid. For a thorough discussion on countable assets, please click here: https://hurleylaw.wpengine.com/exempt-and-countable-assets-single/ or here. These limits leave many families wondering what to do. Nursing home care can be extremely expensive (it averages $8,500 in the Metro Atlanta area). In an effort to preserve some assets, families consider many different options.
Trusts and the 5-Year Look Back Period
Yes, you can certainly move all of your loved one’s assets into an irrevocable trust in order to meet the $2,000 asset limit and then apply for Medicaid. This strategy, however, has consequences. Moving money into a trust is considered a transfer, just like a transfer to another person, and is subject to the 5-year look back period. The look back period states that for every $6,768 transferred during the 60 months prior to the Medicaid application being submitted, there is a 1-month penalty period during which Medicaid will not pay for your loved one’s care. So, if you transfer $67,000 into a trust, you will have a 10-month period during which Medicaid will not pay for your care (care that could total $85,000 or more). Incurring a $85,000 bill to save $67,000 makes no sense.
Notice that the look back period goes back 5 years. If your loved one transfers their money into an irrevocable trust 61 months or more before applying for Medicaid, it will be as if those funds never existed. Engaging in proactive planning for future long term care expenses can save a tremendous amount of money.
Finding Options in a Crisis
Although we recommend that families engage in proactive planning, many avoid these difficult discussions and do no planning. Most families that call us are in a crisis, trying to figure out how to pay for long term care after their loved one has had a fall, serious infection, or difficult surgery; and they are usually trying to piece together a sustainable plan in weeks, not years. So, what options do families have if they are in a crisis and need Medicaid soon? The options for each family depend on their specific situation, and the Certified Elder Law Attorneys at Hurley Elder Care Law work with each family to develop a complete, comprehensive, customized plan to preserve assets and obtain Medicaid eligibility.
To get started on an asset protection plan for you or someone you love, please contact our office at 404-843-0121 to access a complimentary phone consultation.
To keep reading more about Medicaid Planning, please click here.
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