Medicaid – Crisis Planning
The law now requires a five year look back when applying for Medicaid. That means that you are required to provide 5 years of financial materials. Most transfers made more than 5 years from the date of the application are not counted against you. It does not mean that you cannot make transfers if you don’t have 5 years to plan.
Crisis Planning – Crisis Planning involve situations where you or a family member is about to go into a nursing home or is already in a nursing home.
Gift and Promissory Note Strategy – A gift and promissory note plan is designed to protect as much of your hard earned assets as possible and pass it on to your family. Under this technique, the senior makes a gift of approximately fifty percent of his or her assets and also makes a loan of the balance. The gift causes a penalty period; the loan repayment together with social security, pension, any other periodic payments and a retained account of up to $14,250 covers the nursing home costs during the penalty.
The amount of the gift will determine the number of months the applicant is ineligible for Medicaid coverage. When the plan is appropriately structured, the penalty period will end at the same time the loan payments are completed. Thereafter, the nursing home resident will be Medicaid eligible.
The result of this plan is to transfer approximately fifty percent of your assets to your loved ones instead of utilizing all of them to pay the nursing home expenses. Our law firm can provide you with experienced, knowledgeable attorneys necessary to plan and protect your assets.