Planning Tools

While our planners have a large array of tools and strategies to assist you in achieving your Medicaid planning goals, the following is a summary of the top tools used to achieve eligibility:

• Medicaid Annuities – These are special annuities used in certain cases to help convert excess assets to income.  The Deficit Reduction Act (and its predecessor, Transmittal 64), define what type and kind of annuities will achieve this objective.  These annuities are the only way to protect countable qualified assets (e.g., IRA, 401(k), SEP, 403(b), Roth, etc.) from a Medicaid spend down.
• Funeral Trusts – Money put in a funeral trust can be excluded under the special rules that allow a patient to pre-pay for his or her funeral (and his or her spouse’s) before qualifying for Medicaid.  Funeral trusts allow for family to maintain the maximum choices available while using money which would otherwise have to be spent on nursing home care.
• Asset Protection Trusts – There are a number of asset protection trusts which can assist with the shifting of resources for the establishment of Medicaid eligibility   These are usually divided between the pre-planning trusts which maximizes the divestment penalty rules and crisis planning trusts which take advantage of rules that allow assets to be shifted to the community spouse or a disabled child.
• Special Needs Trusts – For younger patients who need care, a special needs trust can be an effective way to maintain Medicaid eligibility and preserve an inheritance or law suit settlement to enhance the disabled patient’s standard of living.  Self-settled trusts (i.e., those trusts created by the people who need to have their assets protected) must have a pay-back provision that reimburses Medicaid if there is any money in the trust when they die.  Often, parents or grandparents can set up a special needs trust for a disabled son or daughter which does not require a Medicaid pay-back provision.  This can be an effective way to pass inheritances to disabled family members without disqualifying them from Medicaid or requiring  Medicaid spend down of the inherited funds.
• Income Trusts – In addition to limits on the amount of countable assets a person can keep and qualify for Medicaid, several states (known as income-cap states) have a limit on the amount of income a person can have and qualify for Medicaid.  To assist those whose income exceeds the limit, an income trust can be used to transfer excess income.  The trust allows the patient to get qualified for Medicaid despite the excess income and the excess income is also paid out from the trust to the nursing home.

Call us or email us to see if any of our Medicaid planning tools can help you protect your assets!