In this article, you can learn about:
- What the look back period is for Medicaid
- What the qualification differences are between a single person and married couples
- What a spouse loses when the other goes into a nursing home
- What assets are exempt from Medicaid
- And more…
Can I Sell My House To My Child For Less Than It’s Worth When Medicaid Planning?
If your child is disabled, then you can sell your house to them for less than full value. In general, though, you cannot. Whatever the difference is between the fair market value and the actual price is going to be considered a gift and then that gift can be subject to a penalty. Therefore, it is not a good idea unless your child is disabled or blind or has certain criteria where they really need the home for a certain reason.
What Is The Lookback Period For Medicaid Planning?
There is a five-year lookback period in Louisiana. Medicaid will ask for 90 days of financial statements when you apply, but they expect you to go back five years and anything you did within the last five years has to be reported. You need to list them on the application and then depending on what is listed, they may ask for more information. There are times people can forget about a gift (such as a car to a grandchild that was worth $20,000) but that still has to be reported. So, filling out the application can be tricky.
What Are the Differences In The Medicaid Qualification Rules For A Single Person Versus A Married Person Whose Spouse Is Still Living Outside Of A Nursing Home?
The asset limits are different between a single person filing for Medicaid and a married person filing for Medicaid. A single person can only have $2,000 in the bank, whereas a married person can have $3,000 in the bank. They are also allowed to keep $137,400 in community assets.
Does My Spouse Lose Everything If I Go Into A Nursing Home?
Spouses are allowed to keep $137,400 in community assets. Spouses are allowed to stay in the home causing the family home to be an exception for Medicaid, allowing them to keep it. The only downside to keeping the house and not having any planning for it is when the person that was in the nursing home passes away, Medicaid will come after the estate to recover the value of that house.
For instance, if a person is in a nursing home for 5 years and Medicaid spent $120,000 on them, Medicaid will want that $120,000 back. Therefore, Medicaid will file a lien against the estate and try to get it out of the house. Estate recovery is something that you should watch out for. Although, if you plan ahead then you can do something with the house and wait to apply for Medicaid till the five years are up.
Are Trust Assets Considered For Eligibility In Medicaid?
Depending on the trust, the trust assets can be considered for eligibility for Medicaid. The trust will most likely be counted based on the following:
- How much control the beneficiary of the trust has
- Is the person that is applying for Medicaid the beneficiary of the trust
- How that trust is written
When Medicaid trusts are done, they are not usually made for the beneficiaries. If a trust is benefitting them where you can get income or you can get distributions, then Medicaid is going to count that against you. The one thing about Medicaid planning that some people learn about it and they decide it’s not for them, is that you do have to give up control of the assets that you put in the trust.
You can’t be the trustee and the beneficiary, so you have to appoint another person to be the trustee. This should be somebody that you trust that is going to use the money for the intended purposes.
What Assets Are Exempt From Being Counted Towards Medicaid Eligibility?
Your house or your personal residence is exempt from Medicaid eligibility. However, it is still subject to estate recovery after the fact. Other main items that are exempt are:
- A vehicle, up to certain values
- Life insurance of $10,000 cash value
- A prepaid funeral of up to $10,000
- Your personal belongings (furniture, clothes, etc.)
For more information on Eligibility For Medicaid Benefits In Louisiana, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (225) 465-1090 today.