23 June 2022

Elder Law: Medicaid Planning

Miller Johnson has Elder Law attorneys and staff who are specifically dedicated to helping seniors, vulnerable or disabled individuals, and their families in accomplishing their goals to protect themselves, their assets, and plans for the future.

Our Elder Law attorneys know, recognize, and understand the unique issues facing older or disabled clients and their families. Our lawyers will help you understand the process involved when working with government agencies such as the Department of Health and Human Services (DHHS) or the Veteran’s Administration (VA), and we will assist you with planning for the long term care needs of your loved one. Long Term Care, whether it be in-home care, Assisted Living or Full-skilled Nursing Home care, each involve varying levels of planning. Our Elder Law attorneys can walk you through the options available to you at each stage..  We will educate you on how to develop and implement a plan that helps protect you, your family and your hard-earned assets from the high cost of long-term care.

Our elder law attorneys are eager to assist you with:

  • Power of Attorney;
  • Guardianship;
  • Conservatorships;
  • Medicaid Qualification;
  • Medicaid Appeals;
  • Veterans Administration Benefits;
  • Special Needs Trust;
  • Care Contracts;
  • Lady Bird Deed;
  • Elder Abuse

Medicaid Planning FAQs:

  1. Is there a difference between Medicare and Medicaid?

Yes.  Medicare is the federal program for senior citizens aged 65 and over and disabled individuals.  You are automatically enrolled at age 65.  In contrast, Medicaid is a need-based government program available to individuals with low income and low asset levels – there is an asset and income test.  Medicare does not pay for your long-term care needs such as assisted living or full-skilled nursing home costs. Medicare will pay for rehabilitation under certain parameters, but once it has been determined that nursing home care is necessary, the patient must look to other options. Medicaid is a different need-based option most commonly associated with paying for full-skilled nursing home care. But there are various Medicaid programs for differing levels of care needed, whether in home or in an assisted living facility. There are qualification thresholds and prequalification requirements that can be very confusing. Before a loved one enters a nursing facility, you would greatly benefit from a sit-down with one of our Elder Law attorneys to educate you on what to look for as you move through this new stage.

  1. What is Medicaid Planning? And why would anyone want to plan for Medicaid?

The reality is, the cost of long term care is so high, that a year or two in a nursing home could fully deplete the average retirement account, making Medicaid assistance necessary.

Someone who would otherwise qualify for Medicaid may be denied for some reason due to spending habits in the five-years prior to their Medicaid application, or other asset holdings or transfers may be causing a kink in the qualification process. This is referred to as the five year look back period, and therefore, the idea is to be sure expenditures are made on the proper things during this time period. If they are issues with this, an attorney who focuses on Medicaid qualification helps the applicant to deal with any issues and obtain eligibility.

Additionally, there are often family circumstances, such as asset protection, or a family member with special needs, that warrants the need to protect some assets, while obtaining Medicaid qualification for the patient.

  1. What is a Guardianship, Conservatorship and Power of Attorney?

A guardianship is a court-appointed process for naming an individual to handle the care and custody of another. The process of a guardianship is began by a family member, friend, or other interested person who requests that a judge grant someone else the  legal authority (i.e. decision making authority) over someone who is found to be incapacitated. The common definition of an incapacitated person: Any person whose decision making process is impaired by reason of mental deficiency, physical illness or disability.

A conservatorship is a court-appointed process for naming an individual or entity to handle the financial affairs of another. The process of a conservatorship is often began by the guardian of an incapacitated person, or another family member, friend, or interested person. Once a judge orders a conservatorship, that person or entity named will have legal authority over the incapacitated individual’s assets.

A guardianship and conservatorship are both court proceedings that require ongoing supervision and annual reporting to the court. Most often, both of these legal proceedings can be avoided by the implementation of a Financial Power of Attorney and Medical Power of Attorney. Both of these are documents that are signed by an individual nominating someone else to handle their care (Medical Power of Attorney) and their finances (Financial Power of Attorney) while they are still competent to do so. This process involves an attorney and can be done in the attorney’s office. These two documents are beneficial for varying reasons, but most importantly because the individual gets to name who they want to take care of them and their ‘stuff’, and not a third-party judge. Also, a huge benefit of having these prepared is that the documents are far less costly than the guardianship/conservatorship proceedings discussed above, and it does not involve any court proceeding or ongoing oversight and reporting.

It is our opinion that these two documents – the Financial Power of Attorney and Medical Power of Attorney are the most important part of your estate plan, because if you do not prepare or implement one before you lose capacity (dementia, alzheimers, coma, etc..) the only option is to go to probate court to begin a Guardianship and/or Conservatorship proceeding, which will each cost you more than 5x that of the documents themselves when planned in advance. The process of the court proceeding itself takes time and energy from an already emotionally-spent family.

Additionally, once a conservator is appointed, it becomes quite difficult to Medicaid plan, or protect assets for Medicaid qualification. Powers of Attorney make Medicaid planning possible when the patient is unable to do it themselves.

  1. What is a ladybird deed?

A Lady Bird Deed, also referred to as an Enhanced Life Estate Deed, in short, is a legal tool we use where the owner of real estate essentially puts a beneficiary designation on their real estate. So, like with your life insurance, upon the owners passing, their death certificate is filed with the Register of Deeds in the county where the property is located, and the property automatically becomes the property of the person they listed on their Lady Bird Deed. The great thing about this document is that it allows someone the ability to pass their real estate to another without having to go through probate. The property does not become part of someone’s estate and therefore avoids probate. Another advantage to a lady bird deed is that it is revocable. The original owner can still do whatever they wish with the property during their lifetime. They can mortgage it, sell it, renovate it, etc. It does not limit the original owner.

There are other advantages and disadvantages to these types of deeds, and there are changes taking place in other states on how these types of deeds are treated. So, it is very important that you speak with an attorney before you implement one of these to ensure that your needs are being met and that you aren’t opening another can of worms.

  1. What are common signs of Elder Abuse?

The list is not all-inclusive, but signs include depression, fear, and isolation of an elderly person, sudden depletion of financial resources; cash payments for undocumented services, odd purchases, hasty requests to sign legal documentation, personal property given away, requests to use personal collateral for third party loans, and requests to change estate planning documents.

  1. Why is it important to have a Care Contract?

A Care Contract is a formal Care Agreement that is memorialized in writing when an elderly person is paying for care from another person or business.  The Care Contract allows payment for in-home care services, and assists the patient in a later-filed Medicaid application.  This is especially important to have in place when looking at possible future need for nursing home care. When a Care Contract is drafted properly, all payments for care will not be classified as divestments for Medicaid purposes.  A Care Contract is often used by family members paying for care to other family members. To be recognized and treated as a proper care contract for Medicaid purposes, it is essential that you speak with an attorney about it before you establish one. There are certain requirements to be a qualified care contract and not be later questioned by the Department of Health and Human Services (DHHS).

If you have any questions or would like to discuss Medicaid planning, please contact the author or another member of the Estate Planning practice.