Many of the Medicaid planning strategies employed by QMC involve updated estate planning that fits within the overall asset preservation strategy. When revised estate planning is necessary as part of the Medicaid planning, QMC can guide you and, if necessary, refer you to a qualified elder law attorney.
Most standard estate planning strategies fit easily within a properly structured Medicaid plan. Preservation of assets from nursing home costs does not prevent a family from reaching all of the basic estate planning goals, such as avoidance of probate, executing healthcare powers of attorney, financial powers of attorney, transferring assets to loved ones and family members at death, avoiding estate tax, structuring gifting, executing living trusts or revocable trusts, establishing special needs trusts for disabled family members, etc. These goals are typically addressed by any qualified estate planning attorney, elder law attorney or law firm.
However, most of these strategies are not designed to preserve assets from long-term care costs or for the qualification for Medicaid benefits. When these types of benefits are added to the list of goals, new and different Medicaid planning strategies must be added to the mix. For example, one of the most common Medicaid planning tools employed are the Medicaid Asset Protection Trusts, or a MAPTs. These trusts are similar to living trusts, but are irrevocable. Additionally, the trustee of a MAPT is typically not the grantor; in other words, the person for whom the long-term care is necessary must give up control of the assets to another individual, typically a family member or a loved one.
For this sacrifice of trusteeship, however, many important goals can be met. These trusts are set up in advance of any potential nursing home care; the goal is to establish the irrevocable trust at least five years prior to the need for a nursing home care, reducing the care recipient’s countable assets at the time of the need for long-term care. The establishment of the trust will create a disqualification for Medicaid benefits for five years following the establishment of the trust, with the goal of getting through this penalty period without any need for a care facility.
Another estate planning strategy often employed to preserve assets is the establishment of an irrevocable special needs trust for a disabled child. For those families, married couples, etc. who have a child with special challenges, the Medicaid rules an additional opportunity exists to preserve funds, qualify for Medicaid, and provide for a disabled child. A special needs trust avoids any five year penalty period as the look-back rule does not apply to special needs trusts for children; a parent in need of nursing home care may establish a special needs trust and immediately file a Medicaid application with immediate Medicaid eligibility and no disqualification or look-back period. And these trusts can hold any amount of assets, even the parent’s entire financial portfolio with no asset limit: annuities, CDs, real property, etc. There are no exemptions. And these trusts are exempt from any estate recovery. They are permanent transfers for the benefit of a child in need.
All of these strategies require the legal advice of a highly trained elder law attorney or Medicaid planning attorney. These types of asset transfers must be handled in exact accordance with the Medicaid rules; the eligibility requirements are very specific. Some of the strategies can be executed by the professionals at QMC and some require a licensed attorney. But not to worry, QMC will guide you properly and will bring all the necessary professionals together to preserve the maximum possible amount of assets for the family.