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Medicaid Planning

Foley Estate Planning Attorneys

Nursing home care in Alabama can cost in excess of $5,000 per month, and in-home skilled nursing care can be even more expensive. If you or a loved one is facing questions about how to plan for the long-term care of a senior citizen, contact a Daphne estate planning attorney who can help you achieve your goals.

There are many tools that are available to protect and preserve assets when developing a long-term care plan. Some of these options include Medicaid nursing home benefits, long-term care insurance, veteran’s benefits, and reverse mortgages.

At Caldwell Wenzel & Asthana, PC, our attorneys are committed to preserving your assets and keeping you in the comfort of your own home for as long as possible. We do this through customized estate plans designed to provide you with financial security during your lifetime and the ability to leave legacies to your heirs when you pass away.

To learn more, contact us online or call us today at (251) 262-2279. Call now and schedule a free consultation!

About Medicaid Planning in Alabama

Medicaid planning is always a last resort when it comes to long-term care planning in Alabama.

Medicaid planning is not the preferred method for long-term care because:

  • It is a government program that offers no guarantee of future availability
  • The laws concerning eligibility for Medicaid are always subject to change
  • Qualifying for Medicaid is based on a financial means test and, thus, qualifying may require the “spending down” of assets

The basic eligibility requirements to qualify for Medicaid nursing home benefits in Alabama are:

  • A person must be aged 65 or older
  • Be a citizen of the United States or qualified alien
  • Be a resident of the state of Alabama
  • Have a continuing need for nursing home care

In addition to the basic eligibility requirements, persons seeking Medicaid benefits must meet the income requirements established under Alabama and Federal law. The first requirement in this regard is that a person must not have an income greater than 300% of the federal benefits rate published by the Social Security Administration. The state of Alabama publishes the official figure each year in its Medicaid State Plan for Medical Assistance (the State Plan). The limit for 2013 was $2,130 per month.

In addition to the income eligibility requirement, a person seeking Medicaid benefits must not have more than $2,000 in non-exempt assets. Generally speaking, examples of exempt assets include life estates, personal clothing, furniture up to $4,000, vehicles that do not exceed $4,500, certain burial expenses not to exceed $5,000, and rental property up to $6,000. Most other assets will be non-exempt or “countable assets” for the purposes of the Medicaid asset test.

If a person applying for Medicaid is married and his/her spouse is dependent on part of his/her income, Medicaid takes this into account through what is known as the “spousal impoverishment rule”. The rule essentially guarantees that a spouse of someone institutionalized in a nursing home and receiving Medicaid benefits will be able to receive enough of the institutionalized spouse’s income to have an income that equals 150% of the federal poverty level. This amount equaled $1,892 per month in 2013.

Moreover, the Medicaid regulations permit spouses to keep a certain amount of non-exempt assets in the case where one spouse applies for Medicaid benefits.

Call (251) 262-2279 for Help

If you or a loved one are currently in a nursing home facility or are interested in learning more about Medicaid planning for nursing home benefits, you should call us for more information. We may be able to help you save money and protect your assets through an estate plan customized for your specific scenario.

Non-Exempt Assets & Medicaid

Individuals seeking Medicaid benefits must not have more than $2,000 in non-exempt assets.

Generally speaking, examples of exempt assets include:

  • Life estates
  • Personal clothing
  • Furniture up to $4,000
  • Vehicles that do not exceed $4,500
  • Certain burial expenses not to exceed $5,000
  • Rental property up to $6,000.

Most other assets will be non-exempt or “countable assets” for the purposes of the Medicaid asset test.

Non-exempt assets include property such as bank accounts, cash, loans, annuities, life insurance policies, stocks, and bonds. Jointly owned property presents a potential issue for Medicaid applicants and their loved ones because the general rule is that an applicant is deemed to hold ownership of the whole account if she has unfettered access to the account. In Alabama, this presumption may be rebutted under certain circumstances and the Alabama Medicaid Agency will consider the following factors in the case of a rebuttal: Purpose of establishing the joint account, a showing of deposits and withdrawals on the account, and the statements of the other account holders.

If, after taking into account all of the applicant’s non-exempt assets, Medicaid determines that the individual does not qualify due to excess assets, the applicant will have to “spend down” the assets in order to meet the asset requirement. Furthermore, an applicant will be penalized if he/she attempts to dispose of excess assets at below fair market value.

Qualified Income Trusts

If a person would otherwise qualify for long-term care Medicaid benefits, but receives too much monthly income to meet the Medicaid income test, Medicaid in Alabama will permit such a person to establish a “Qualified Income Trust”, sometimes referred to as a “QIT” or “Miller Trust”.

To establish a QIT, the Medicaid applicant would make an irrevocable declaration of trust and appoint someone (other than the applicant) as trustee. The beneficiary of the QIT must be the Alabama Medicaid Agency. Thereafter, all of the applicant’s income would be placed in the trust. The trustee would then distribute to Medicaid all of the applicant’s monthly income received minus all allowable deductions.

Creating a QIT can make a person eligible for Medicaid, who otherwise received too much monthly income to qualify because it allows the state to be paid back for at least a portion of the money that it pays on behalf of the Medicaid applicant.

Contact the Foley estate planning attorneys at Caldwell Wenzel & Asthana, serving Spanish Fort, Daphne, Foley, Fairhope and all of Alabama at (251) 262-2279 for a free consultation.

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