How to Get Medicaid Without Losing Everything
If you’re anything like the hundreds of Medicaid clients who have walked through our law firm’s doors, you’re probably thinking “Medicaid is not an option. It’s only for people who are completely broke!” While you are technically correct – an applicant needs to have less than $2,000 in assets to qualify for Medicaid – what you may not realize is that Florida is the best State to need Medicaid. This is because Florida has more strategies to protect your loved one’s assets while getting them the help they need. Let’s investigate some of the common ones.
1) Pooled Trusts. A pooled trust is a trust run by a non-for-profit company. You transfer your excess funds to this company and they use the money for you. This gives you the benefit of having your funds available and still getting the benefits you need. However, there are a couple downsides. First, whatever is left in the trust after you die is subject to Medicaid claims. Additionally, the Pooled Trust company charges for the services they provide.
2) Rental properties. Florida is unique in that it does not count rental real estate as an asset. It only counts the rental income against the monthly income limit of $2,313 (as of July 2019). The problem is that properties tend to have bills which Medicaid doesn’t let you keep money to pay. As a solution, there are companies in Florida who will sell partial interests in their rental properties and guarantee you a certain monthly income. You don’t need to worry about paying taxes, insurances, or property management companies. They take care of it all. The assets become illiquid, but at least you can preserve your legacy for your loved ones.
3) Personal Services Contracts. This is the most commonly used option by Elder Law attorneys. This is a way to keep your assets liquid, in the control of someone you trust, and still qualify for Medicaid. As we know, Medicaid doesn’t allow you to gift anything away within five years of applying for Medicaid. However, the personal services contract is a legal contract between a Medicaid applicant and an individual for the care and services which the individual will provide. What makes this especially effective is that the contract is based upon the life expectancy of the Medicaid applicant and the full amount can be paid in a lump sum. It has the effect of transferring substantial assets to another individual without a Medicaid penalty. The downside to this strategy is that because it is “earned income” it is reportable on the recipients tax return.
There are still many more options not discussed here. The best part of all? You can engage in these strategies even if your loved one is already in the nursing home.
This article was written by attorney Geoff Hoatson, CEO & Founder of Family First Firm.
To learn more about how you can protect your legacy and still qualify for benefits, visit us online at www.FamilyFirstFirm.com or call us at 407-574-8125.
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