Medicaid Planning and the Medicaid Application Process
Fendrick & Morgan, LLC, has a strong concentration in the area of Medicaid planning and in assisting our clients with the ever-changing landscape of the Medicaid application process. Medicaid is a federal program, administered by the states, and is designed to give financial relief to families and individuals incurring significant long term care costs. In addition to assisting our senior clients and their families with the legal documents necessary to ensure that their affairs are in order, we also assist them with asset protection planning to qualify for this very valuable government benefit. We handle applications for such benefits in both New Jersey and Pennsylvania. Proactive planning is particularly important in light of the ever-changing and increasingly difficult standards to qualify for Medicaid benefits. The costs associated with long term care, whether it be in-home assistance, assisted living care or nursing home care, are prohibitive for most. As such, qualifying for Medicaid benefits is critical to maintaining a quality of life for the community spouse and other family members. This planning is particularly important when there is a healthy spouse who is remaining in the community and, perhaps, in the marital home. We want to ensure that you, and your loved ones, are able to preserve as much of your accumulated wealth as possible. Applying for Medicaid doesn’t need to be a nightmare.
Let us help you plan for your family and their future.
Life Requires Planning. . .
Today, a senior citizen (aged 65 or older) has a one-in-four chance of spending time in a nursing home facility. According to the U.S. Census Bureau, more than 5% of those 65 and older reside in a nursing home, assisted living or other continuing care facility at any given time. That rate increases with age, with almost 50% of those aged 95 and older residing in a nursing home. With nursing home costs averaging $10,000 per month or more, are you equipped to pay for your long term care costs as you age?
What Are Your Options? Nursing home and assisted living expenses can be paid privately. However, no one wants to see their life savings dissipated in their golden years to pay for long term care costs. In the alternative, such expenses can be covered by long term care insurance, Medicare, Veterans’ Benefits and/or Medicaid. However, only approximately 5% of all Americans have long term care insurance. We are strong advocates of long term care insurance, but understand that it may not be a viable option for some. Medicare is only a temporary aid to assist with such costs. Finally, less than one 1% of all nursing home residents currently receive Veterans’ Benefits. Therefore, the primary long-term alternative to help cover assisted living and nursing home expenses is Medicaid. The key to protecting your assets while maintaining a high level of comfort and care is to initiate Medicaid planning early. When you have the foresight to be proactive, we are best able to assist in preserving assets and still qualifying for Medicaid benefits. When an individual qualifies for Medicaid benefits, his or her income is directed to pay a portion of their long term care costs (with certain exceptions) and the balance of the long term care cost is paid directly by Medicaid. Thus, the benefit to the family is tremendous.
Be Proactive. Medicaid planning is planning designed to protect your assets within the confines of the Medicaid rules. At Fendrick & Morgan, LLC, we carefully design each client’s Medicaid plan in order to secure assets for the spouse and preserve a legacy for surviving children. Failure to proactively plan can result in the rapid dissipation of assets for the spouse and family, and may result in the “healthy” spouse being unable to maintain his or her standard of living. While it is important to be proactive in your planning, it may not be too late to protect some assets even if a loved one is already in a nursing home or assisted living facility. The rules for Medicaid eligibility are both strict and unforgiving. To help you navigate these rules, you need attorneys with experience and expertise in the area of Medicaid planning. At Fendrick & Morgan, LLC, we offer you both.
Our Plan. At Fendrick & Morgan, LLC, our approach to Medicaid planning is to combine our years of experience with skillful and creative drafting to produce a customized plan for each client that best meets their individual needs. But, first we listen. We listen to your concerns, your needs and your desires. Then, relying on the extensive education and experience of our attorneys, we create the appropriate vehicles to protect your assets in the event that you or your spouse requires long term care. You are our number one priority. Not only do we work hard to qualify you for governmental assistance, when appropriate, but we also make sure that your estate planning documents (i.e., your Wills, Living Wills, General Durable Powers of Attorney and Trusts, if applicable) are all in place. Above all, we focus on providing the highest level of professionalism and service at all times. When you need a Medicaid planning attorney in New Jersey, look no further than Fendrick & Morgan.
Medicaid Planning and Applications. We perform a comprehensive evaluation of your unique family and financial situation. Based on this evaluation, we provide planning recommendations designed to preserve your estate for your spouse and heirs, to the greatest extent possible. In addition to planning for the possibility of future long-term illness, we can advise you and your family after such illness occurs. The rules of Medicaid eligibility are constantly in flux. As these rules become increasingly complex, there are pitfalls for the unwary, but opportunities for the early planner. We can guide you through the Medicaid maze and successfully apply for benefits on your behalf, or on behalf of your loved one.
For Example… Assume that Bob and Jane Smith, a happily married couple of fifty years have two adult children. Sadly, Bob, at the age of seventy-five, begins showing signs of memory loss. Ultimately, Bob may require care that Jane is unable to provide for him at home. Bob moves into an assisted living facility in New Jersey while Jane continues on in the marital residence, where the couple has lived for the last fifty years. The couple has assets, which include their marital home (which is in joint names), some checking and savings accounts, and retirement account assets. In addition, Bob has a modest life insurance policy. Combined, such assets total $350,000. Additionally, Bob receives both Social Security and a pension totaling $2,500, while Jane receives Social Security in the amount of $800 per month. Jane needs Bob’s income to pay the household expenses. The Medicaid rules provide that Bob, who is referred to as the “Institutionalized Spouse,” may not have assets in his name that exceed $2,000. The Medicaid rules provide that Jane, who is referred to as the “Community Spouse,” may not have assets which exceed an amount equal to the lessor of:
(1) fifty percent of the couple’s combined resources, valued as of the earlier of the Institutionalized Spouse’s first day of continuous institutionalization or the date of the Medicaid application, and
(2) the Community Spouse Resource Allowance (or, the “CSRA”) (currently, $119,520, and indexed annually for inflation).
We can counsel Jane regarding how to protect her residence and convert it to an exempt resource. We can further counsel Jane about how to spend down the assets in a manner that is for Jane’s benefit, rather than just paying Bob’s monthly nursing home expense. Where retirement account assets are involved, we can discuss the appropriate liquidation of those accounts or, the possibility of preserving the retirement accounts in their entirety. Finally, we can counsel Jane regarding Bob’s income, and how much of Bob’s income she may be able to retain. Where Bob’s income exceeds an “income cap” (currently, $2,199 per month), we can establish a special type of trust: a Qualified Income Trust (a “QIT”) to hold Bob’s income so that it does not jeopardize his benefits.
Benefits of Medicaid Planning
- Avoid dissipation of life-long savings and protect assets from nursing home and assisted living expenses.
- Allow surviving spouse to maintain his or her standard of living.
- Preserve estate for heirs.
- Appoint an individual to assist with financial affairs and end-of-life medical decisions.
- Plan and allocate finances for current and future medical residential needs.
- Create QIT for excess income, where appropriate.