Think again if you thought Medicaid planning only included meeting strict income and asset limits for long-term care coverage. You will also need to demonstrate you need the level of care typically provided in a nursing home setting. These health eligibility rules are valid if you apply for nursing home coverage or a Medicaid waiver program for coverage in your home. Each state has a level of care requirement and its own criteria to determine if you meet the mandated level of care. It can get complicated because eligibility criteria are not always clear. Determining the level of care necessity usually includes:
The state evaluates the assessment of a Medicaid applicant and, in many cases, will require a doctor’s diagnosis. The assessment generally requires the applicant to answer a series of questions about their abilities to perform activities of daily living and any behavioral issues or cognitive problems. There are further questions regarding the applicant’s family and their ability to provide support. Qualified Income Trust or Miller TrustsMedicaid is designed to assist low-income individuals and those over the age of 65 to pay for nursing home care. People with significant assets may be disqualified from obtaining assistance for long-term care from Medicaid. However, one way to keep Medicaid eligibility for people with assets that exceed the eligibility threshold is to take advantage of Qualified Income Trusts. Establishing a Qualified Income Trust (QIT) or Miller Trust is one alternative for Texans who do not meet the income requirement for Medicaid. Assets that go over the threshold of Medicaid eligibility can be transferred into the trust. There is also a five-year “lookback” period for determining Medicaid eligibility. The lookback period is a set period of time before the person’s Medicaid application where the state agency reviews the financial transaction that the applicant has made. Furthermore, a Miller Trust can also be used to hold income instead of assets. Speaking to an experienced Medicaid planning lawyer can help you explore your options when it comes to qualifying for Medicaid benefits. Our team of estate planning attorneys at the Law Office of Whitney L. Thompson may be able to assist you with the process. Contact us today to schedule a consultation. Understanding Medical Services Covered by MedicareMedicare still covers the medical services you may need beyond nursing care along with institutional Medicaid. If you need to see a specialist or go to a doctor’s office, Medicare pays first, and Medicaid will cover your remaining costs like copayments, coinsurances, and deductibles. When applying for institutional Medicaid, consider the following:
Nursing home level of care, also known as nursing facility level of care (NFLOC), Is not an easily definable term as there is no formal federal definition. Each state has the task of defining the term, and rules are not always consistent from one state to the other. Generally, there are four areas of concern, though not every state considers all four; physical functional ability, medical needs/health issues, cognitive impairment, and behavioral problems. For those families with a loved one who requires more care than they can provide at home but do not require a high enough level of care to qualify for nursing home admittance, there is an in-between care type typically provided in assisted living. However, Medicaid coverage of this type of assisted living is very limited in numbers. Nursing homes are experiencing very limited capacity, and waitlists can be years. Medicaid is adapting to provide this coverage type in-home to those applicants who may meet NFLOC Medicaid eligibility requirements but not pose a danger to themselves or others in a home environment. Perhaps using this as a springboard as a potential nursing home residence is waitlisted for full-time care. Before applying to become eligible for Medicaid nursing home coverage, there is much to consider. Applications that are insufficient or incorrectly filed can create delays, and with limited space available, it can be several years on a waiting list before admittance can take place. The need is more significant than ever before for long-term care in a nursing home. Meeting your state’s eligibility requirements can be a long and complex series of providing documents, answering questionnaires, having assessments and reviews, and filling out and filing forms. The scope of the project can be overwhelming. To get to your best outcome, don’t wait. Proactive planning with an estate planning attorney will help you understand and address all criteria you need to act on to succeed. Please contact our Houston office at 281-214-0173 or the Bay City office at 979-318-5079 today and schedule an appointment to discuss how we can help you with your legal matters. Via https://www.wthompsonlaw.com/nursing-home-care-and-medicaid-eligibility/
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Getting a Texas Guardianship can be a complicated, stressful process. In most situations that require a guardianship, you will also be dealing with a traumatic experience, such as a death in the family or an ill family member. To make these situations less stressful so that you can focus on caring for the people you love, it is imperative that you plan for a few scenarios in which you will need a guardianship. The Role of a GuardianThe guardian’s role is to ensure that the ward and their estate are protected within the limits set by the court. It is important to keep in mind that a guardian’s role is dictated by the court and a guardian is not allowed to take any action that is not within what the court ordered upon their appointment. The guardian may petition for another order from the court to allow them to act in an expanded capacity if their ward’s disability or incapacity has progressed. The guardian also has to make an annual report to the court about the ward’s welfare, estate, and health. This is why it is important for the guardian to keep records that show any financial transactions and actions they have taken on behalf of their ward. One common myth about guardians is that they are accountable for any negative actions made by their wards. However, this is not true. A guardian will only be liable for the bad acts of their ward if they are also an accomplice to that action. Speaking to a skilled guardianship attorney may be able to help you learn more about guardianship and the specific roles a guardian may have. Houston estate planning lawyer Whitney L. Thompson has helped many families explore guardianship and provide solutions for their needs. Contact us today to schedule a consultation. Here are two different instances that will require a guardianship. An Adult Loved One Has Become Mentally IncapacitatedWhen an adult becomes incapacitated, they will need someone else to make decisions for them. It might happen because of an accident, old age, or illness, but the important thing is that you have the right person to make decisions in your place. If you do not name a power of attorney before incapacitation, your loved ones will have no choice but to try to name a guardian for you. The reason it is so critical to name someone before you can’t make decisions on your own is that it can cause serious harm to the family unit. Infighting is not uncommon for families dealing with guardianship issues for a loved one. Make things easier for your family. Plan for the unthinkable. An Adult Loved One Is Living with Limited AbilityThere are many reasons that an adult might be living with limited mental ability. They might have been in an accident or suffered an illness that left them with lower cognitive ability. They might have been born with special needs. Whatever the reason, they may require at least some help to function as an adult. In such instances, a limited guardianship could help. This type of Texas guardianship allows the individual to maintain a certain level of independence without risking their health, safety, or finances. A doctor may determine that they are capable in certain areas of life, like maintaining their health, but that they need help in another, for instance, finances. Plan for Your Texas Guardianship—Contact Me TodayIf you want to start planning for the future, get in touch with me today. As an expert on guardianship and other estate planning matters, I can help you find the right solution for your situation. Don’t wait until it is too late. Contact The Law Office of Whitney L. Thompson, PLLC today at (281) 214-0173. Via https://www.wthompsonlaw.com/texas-guardianship-you-can-plan-for-these-2-situations/ Guardianship for Individuals with Special Needs: 5 Reasons Its Important When They Turn 1810/6/2022 Most parents sit back and watch as their children turn 18 and leave home. But what about parents of children with special needs? If you are the parent of a child with a developmental or intellectual disability, you should really consider setting up guardianship of the person, estate, or both. Here are five reasons why. Individuals with Special Needs and Privacy LawsWhen your child with special needs turns 18, he or she is considered an adult under the law for all purposes. The reason that this fact is important is that all the rights that you had as a parent—access to medical records, finances, and any other documentation—no longer apply because your child is now a legal adult. For this reason, it is critical for you to become your adult child’s guardian, or to appoint someone else as their guardian. Without access to these types of documents or the ability to make critical decisions for your adult child, you will not be able to ensure that they are getting the help and care that they need. To make sure that there is no lapse in your ability to care for your adult child, you need to speak to a knowledgeable Texas guardianship attorney. They will help you to prepare for your child’s 18th birthday. Individuals with Special Needs and Criminal JusticeIn Texas, when someone turns 17, they are considered an adult under the criminal justice system. This goes for people with developmental and physical disabilities as well. While you cannot keep your adult child from breaking the law, you can protect them in the event that they need legal representation. As your adult child’s guardian, you can become an advocate for your child and make sure that they have legal representation, whether you hire an attorney privately or through the criminal appointment list in your respective court. Everyone deserves representation when they are suspected of a crime. Give your adult child with special needs the protection they deserve. Avoiding ExploitationUnfortunately, we live in a world where exploitation of the most vulnerable members of our society is far from rare. Adults with special needs are more likely to fall victim to fraud, physical and emotional abuse, and other forms of exploitation than other adults. With a guardianship in place, you can continue to monitor your adult child’s finances and living situation to protect them from the bad people of the world. Individuals with Special Needs and Higher EducationAt one time, a person with special needs would not have had a chance to go to college. But times are changing. Many colleges and universities now offer programs and housing that are geared toward those with special needs. With a guardianship in place for your child with special needs, you can make sure that your adult child continues to have the support they need as they seek an education. Continue to Help Your Child with Special Needs Find Programs and ResourcesAs a guardian to your adult child with special needs, you can also continue to advocate for them by helping them find local programs and resources that will help them live independently. How Does a Legal Guardianship Work for Individuals With Special Needs?Guardianship is a legal process that the Texas probate court oversees. Guardianship is used as a means to protect individuals with special needs from abuse, exploitation, neglect, and other difficulties that they may face if they have to make important decisions about their life and finances If guardianship is requested, you are basically asking the court to take away the legal rights of an incapacitated individual (or the ward). A guardianship will bestow the legal rights to another adult, which is the guardian. In Texas, a person is legally incapacitated if they have a health condition that will render them unable to provide basic needs for themselves or unable to care for their financial and physical welfare. Guardianships are often used when a person is or becomes unable to handle their affairs because of a disability. However, the law distinguishes between incapacity and disability. A disability such as paraplegia does not mean that the person is legally incapacitated since paraplegic persons have the capacity to make decisions on their own. Incapacitation means that a person can no longer care for themselves or their financial well-being. In situations where a person is partially incapacitated and has the ability to care for themselves but is unable to manage their finances and estate, a guardian may have limited rights. It is important to understand your child or loved one’s needs and abilities before you apply for guardianship. Speaking to an experienced special needs guardianship attorney may also be able to help you understand the rights and responsibilities a guardian may have. Talk to Me about Guardianship for Individuals with Special NeedsWant to learn more about why you should consider a guardianship for your child with special needs? I would love to talk to you. Get in touch today. Contact a Houston estate planning lawyer from The Law Office of Whitney L. Thompson, PLLC at (281) 214-0173. Via https://www.wthompsonlaw.com/guardianship-for-individuals-with-special-needs-5-reasons-its-important-when-they-turn-18/ Older adults or persons with disabilities may require long-term care. This can include nursing homes or other assisted living facilities. Medicaid can help with this often overwhelming endeavor — but you might not know where to begin. However, if you know that you (or a loved one) will need care in the immediate or distant future, you can save yourself stress and worry by planning for Medicaid now. The first step is for you to find out if you meet the Texas state Medicaid eligibility requirements. Contact an experienced estate planning attorney before making any decisions. How Does Medicaid Help Me?For older adults and persons with physical or intellectual disabilities, long-term care can become expensive. They or their caretakers may not have the means to access nursing homes or extended care, despite their needs. Medicaid helps relieve that burden. It is a state and government program that provides free or low-cost health care services to individuals with need. Do I Qualify?Eligibility depends on a few factors, including income. Here is a brief overview of Texas state Medicaid eligibility requirements. You must:
You must also meet at least one of these conditions:
To learn more about the requirements you need to meet, visit the Texas Medicaid website. What if I Make Too Much Money or Have Too Many Assets?Your best option is to contact a knowledgeable Elder Law Attorney. They can tell you more about the income and asset rules for Medicaid. If you need help qualifying for Medicaid, a skilled Medicaid planning attorney can also help you with asset protection planning. Medicaid Eligibility Requirements in TexasIn Texas, there are certain requirements that one must fulfill in order to be eligible for Medicaid. These requirements are:
Secure Your Future Through Medicaid Planning TodayWhen you plan in advance for long-term care, you can raise the quality of life for yourself or the loved ones you care for while reducing stress. If you prefer an experienced lawyer to guide you through the Medicaid planning process, call Whitney L. Thompson, Esquire at (979) 318-5079. Via https://www.wthompsonlaw.com/nursing-home-care-do-you-meet-the-texas-state-medicaid-eligibility-requirements/ Estate Probate Lawyer: Estate Planning Is Not Scary but Failing to Plan Can Be a Nightmare8/15/2022 Estate planning is usually the last thing on our minds, especially if we’re young and healthy. Unfortunately, tragedy can strike us at any moment. Accidents and healthcare emergencies can emerge often out of nowhere. In the midst of a global pandemic, this is all the more relevant. Many people have never heard of an estate plan or don’t understand how it differs from a will. An estate plan includes a will — but that’s not where it ends. It’s a guide to distributing all your assets and protecting your family in case you pass away or become incapacitated. In addition to a will, you should also determine:
As a Houston estate probate lawyer, I’ve witnessed the consequences of failing to plan — which often burden a deceased person’s family. Regardless of what stage of life you’re in, here’s why planning your estate is a wise choice. Why You Need an Estate PlanThe consequences of not having an estate plan can be far-reaching for your family members and loved ones. Lacking an estate plan can lead to an unwanted distribution of your assets and disputes among family members. Estate Plans Protect Your End-of-Life WishesIn the case that you become incapacitated without an estate plan, several things can happen. If you’re in a coma or otherwise unable to make decisions, the state will choose who makes health care decisions for you. Your family will often be the ones responsible for making the heavy decision of whether to keep up with life support costs. Estate Plans Implement Your Wishes After You PassIf you don’t settle your wishes in legally enforceable writing and documentation, the state of Texas is free to decide what happens to your estate. Your assets don’t go to the government, but the law does decide who gets a piece of your estate and how much they receive. Without any sort of legal plan in Texas, your estate will primarily go to your spouse and surviving children. With no spouse or children, it goes to any surviving parents. Estate Plans Prevent Legal Disputes Among Loved OnesArguments and legal battles among loved ones are a common occurrence. Fights often ensue over who gets a piece of your money, belongings, and assets. Relatives can even sue your estate if they feel entitled to an inheritance they didn’t receive. Such disputes end in tension and can even end up breaking your family apart. The last thing you want to be worried about is how your family will fare financially after your passing. With an estate plan, you can give your loved ones one less thing to worry about in the wake of your passing. Texas Laws on Estate PlanningThe state of Texas has its own laws surrounding estate planning. In Texas, there is no state estate or inheritance tax, but there is still a federal tax for highly-valued estates. Without these taxes, the complications of the estate planning process are greatly reduced. Texas also does not require probate for estates that are valued at less than $75,000. Furthermore, it is important to keep in mind that Texas recognizes common-law spouses, as well as adoptive and illegitimate kids as having equal inheritance rights with legally married spouses and legitimate children. These are a few of the nuances of how Texas estate law can impact your estate plan. Understanding how estate planning works in the state of Texas and Houston is very important in helping ensure that your plan is foolproof. The Benefits of Estate PlanningA person’s estate plan is not just beneficial for them, but also for their family. Planning for the future is a way to ensure that the family is going to be protected even after unexpected events happen. The benefits of having a comprehensive estate plan include the ability to avoid probate, provide for your family, protect your assets, prepare for incapacitation and ensure your loved ones are cared for. Planning for your estate ensures that you and your loved ones are well taken care of. Estate planning lawyer Whitney L. Thompson has the knowledge and experience to assist you in drafting a legal and comprehensive estate plan. Get in Touch with an Estate Probate Lawyer TodayWhether you need to create an estate plan or update it, I can help. Contact us today so we can discuss your goals and come up with a solution for your estate plan. Via https://www.wthompsonlaw.com/why-you-need-an-estate-plan/ Government oversight of long-term care facilities is deeply problematic, according to a recent New York Times report. Inspection of rehabilitation facilities is inadequate, and we, the public, had best not rely on reporting inspection results. Speak with an experienced Houston estate planning attorney before you make any decisions. If your loved one needs more care than can be provided at home and trying to find a facility, be sure to do your due diligence. Visit the facility, talk to doctors, get references, and do everything you can to gather your data in deciding whether you would feel comfortable placing your elder there. You may have seen the rating system provided by the Centers For Medicare and Medicaid Services (CMS). CMS awards stars to healthcare facilities on “Care Compare.” The stars are intended to help you make informed decisions. The more stars, the better the facility is supposed to be. However, the website also advises that in addition “to reviewing the information here, you should talk to your doctor, social worker, or other health care providers when choosing a provider.” That is for sure. The New York Times report, published on December 10, 2021, is titled “How Nursing Homes’ Worst Offenses Are Hidden From the Public.” The report documents how federal and state investigators failed to record some severe nursing-home infractions – including abuse, neglect, over-medication, and endangerment of residents. If violations were cited, and even if they were upheld in a secret appeals process where only unopposed nursing homes are permitted to make their case, the stars on the “Care Compare” site did not reflect the proven violations. Some facilities with serious violations retained their glowing reviews regardless. The “Care Compare” star ratings are highly consequential to the nursing homes’ balance sheets. As the Times reports, there is a link between the number of stars awarded to a facility and the facility’s profits. In other words, the public relies on the stars, but visitors to the site have no way of knowing whether the stars do reflect the state of affairs at the facility. New legislation may help. The Nursing Home Improvement and Accountability Act was introduced in August 2021 by Senate Finance Committee Chair Ron Wyden (D-OR) and several other Democrats. Wyden’s bill aims to improve the quality of care and the oversight system for those facilities receiving government funds. The bill is in the first stage of the legislative process at writing. Of course, given a choice, most people would rather stay at home if possible. That option, too, however, is plagued with problems. Government money available for in-home care is presently stretched very thin. Thousands of elders are on waiting lists to receive funds through various programs. Care workers are among the lowest-paid in the nation. The standard of care inevitably suffers. The “Build Back Better” package, currently proposed by the Biden administration, has been slashed during negotiations in Congress. However, the current funds under discussion, $150 billion for elder care, would be a significant first step toward improving the outlook for so many who need support and health care at home. Congress is also considering extending a tax-relief provision that is presently contained in the covid-stimulus package, the American Rescue Plan, which passed in March 2021. The ARP provision permits tax deductions of $4,000.00 in care expenses per dependent for low- and middle-income families. Nursing Home Abuse in TexasTexas Nursing Homes must adhere to certain standards of care under the Texas Administrative Code. Residents of nursing homes have the right to receive the necessary care and services to ensure they live a high-quality life. This includes their social, mental, and physical well-being. Every resident should also have a care plan that outlines their needs for housing, medication, social services, equipment, and other necessities. Other standards of care are also required by Texas law. These include not giving residents any unnecessary drugs, keeping the medication error rate under 5%, providing a safe environment, and preventing bedsores. Nursing home neglect is when nursing homes fail to meet their obligations. Nursing home abuse, on the other hand, is the willful infliction or causing of physical, mental, and emotional pain. It may include sexual, emotional, or physical abuse. Texas law permits nursing home residents and their family members to hold nursing homes responsible for neglect or abuse. Some help for home care has already arrived with the ARP tax relief, and more may become. But if your elder needs more-intensive care in a facility, caveat emptor – and contact your representatives in Congress. The nursing-home improvement bill has a long way to go before it becomes law. Please contact a Medicaid planning attorney from our Houston office at 281-214-0173 or the Bay City office at 979-318-5079 today and schedule an appointment to discuss how we can help you with your legal matters. Via https://www.wthompsonlaw.com/the-importance-of-keeping-an-eye-on-nursing-homes-and-rehab-facilities/ In its simplest form, estate planning requires careful consideration. When you are the parent of a child with special needs, it’s even more critical that you make the right choices when planning for your family’s future. One of those choices is whether to set up a special needs trust. Before you make any decisions, speak with a qualified Houston estate planning lawyer. The decision is an important one if you want to continue supporting your child with special needs after they become a legal adult. Here are three reasons you should consider creating such a trust. 1. You Want Your Child to Continue Receiving BenefitsMany adults with special needs rely upon public benefits such as Supplemental Security Income (SSI) and Medicaid. If you want to continue to support your child with special needs after they turn 18 without jeopardizing their benefits, a special needs trust can help ensure that they continue receiving them. If you were to simply give them money to live on, they would have to report that as income, which could put them over the income limits for their benefits. When you set up a trust instead, you can protect those benefits. Because the trust holds the assets that you fund it with—whether it is property or money—your child does not actually own those assets. As the beneficiary of the trust, the income that they receive will not affect their benefits. However, the income that your child receives from the trust must be supplemental. As an estate planning tool, though, a special needs trust is a great way to provide your adult child with a higher quality of life. 2. You Want to Ensure the Funds Are Used Only as IntendedLeaving an inheritance to a child without the protection of a trust allows for abuse to occur. You might think that you leave your estate to a trusted relative with the stipulation that it be used for the benefit of your child. But too many times, this type of arrangement leads to bad decision-making and betrayal. Without the protection of a trust, the estate you leave behind is subject to misuse and can be seized for outstanding debts. If you want to ensure that the funds you leave behind are used how you intend them to be used, creating and funding a trust might be right for your situation. 3. A Special Needs Trust Allows Others to ContributeBy establishing a trust now, you can multiply the amount of support that your child with special needs can receive in the future. How? By encouraging others, such as grandparents, to contribute to the trust. Anyone who wants to help can give up to $15,000 per year without incurring the gift tax. What is a Special Needs Trust?A special needs trust, as defined by Texas law is one that allows someone with disabilities to set aside money for their care. The special needs trust allows an individual with a disability to still be entitled to all government benefits. A designation of guardianship should also be considered when planning for special needs trusts. A temporary guardian can be designated depending on the location of the successor guardian. Temporary guardians can take care of the child while the permanent guardian is in place. Temporary health care agents may be needed in the event that the parent needs someone else to transport the child to the hospital. HIPAA authorizations are required for disabled children. They allow for access to medical records if needed. Special needs trusts are specifically created to provide money for beneficiaries. It doesn’t really matter what the amount is. They are eligible for benefits regardless of the amount. We tell our clients that even if you have one million dollars invested in a trust for special needs, your child can still receive government benefits – provided that the planning is done properly. Two methods can be used to fund a special needs trust. When we establish a trust for special needs, the parents usually open a savings account and deposit small amounts each year. A special needs trust can be funded by beneficiary designation. A beneficiary designation is a way for parents to leave a specific amount to their child, such as a gift to the special needs trust trustee. Wondering Whether a Special Needs Trust Is Right for You?The decisions you make regarding your estate plan can have consequences in the future. Want to make sure that you are making the best, most educated choice that you can so that your child with special needs can enjoy the quality of life that you want for them? I’d love to talk to you. Contact The Law Office of Whitney L. Thompson today so we can discuss how to approach your estate plan. Via https://www.wthompsonlaw.com/3-reasons-to-you-should-consider-a-special-needs-trust/ Medicaid and inheritances can be tricky affairs, and mistakes can cost a lot of money. When a person is drawing Medicaid benefits and inherits money or property, that inheritance jeopardizes the benefits. The inheritance must be handled carefully to minimize expensive penalties. What “careful” means, though, can be misunderstood without the necessary expertise. The Right Steps for Handling InheritanceThe first and best idea is to call experienced elder law attorneys like us. (An even better idea is to call us well before any inheritance becomes a “problem.” The sooner you call us, the more money we can likely protect for you.) An Ohio attorney was recently suspended partly because he mishandled this Medicaid-inheritance issue. The mistaken advice was that to protect the benefits, the person who stood to inherit should “disclaim” or “renounce” the inheritance – in other words, give it away to someone else. Medicaid Rules and Inheritance ContextThat advice would have been OK in the tax context. It was not OK in the Medicaid context. The Medicaid rules count inheritances regardless of whether the recipient keeps them or passes them on to someone else. The bad result, in such cases, is that the person receiving Medicaid would be charged just as if he or she had taken the money, even if he or she gave it away, and the person’s benefits would be docked accordingly. This can be a very expensive misstep. The better result would be to consult us immediately. We can advise you on the necessary techniques to split the inheritance between the recipient and somebody else, like a child. If the right strategies are used, Medicaid would count the inheritance to an extent, but not as much as it would have if the recipient had simply given away the whole sum. An even better result would be if the person leaving the inheritance had consulted us first. We know how to structure that person’s financial arrangements, to protect the people to whom the person wants to leave his or her legacy. Elder law is a law unto itself. We know that complicated area of the law well and we have helped many people successfully meet the challenges it poses. Please contact our Houston office at 281-214-0173 or the Bay City office at 979-318-5079 today and schedule an appointment to discuss how we can help you with your legal matters. Via https://www.wthompsonlaw.com/medicaid-and-inheritances-planning-ahead-is-essential/ If you want to receive federal assistance through Medicaid for nursing home care, assisted living, in-home care, or adult foster care, you must meet the income and asset requirements. Due to these rules, many candidates donate their resources and money to qualify. An individual’s financial transactions are reviewed by the Medicaid administering agency during a look-back period before their application is accepted. If a transaction violates the look-back rules, the applicant will be penalized by losing Medicaid eligibility for a period of time. The period of time could be months or even years. Forty-nine of the fifty states have a look-back period of five years (or sixty months). The exception is California, with a thirty-month look-back period. This period of Medicaid ineligibility is a penalty period with no maximum. To determine the penalty period, Medicaid takes the dollar amount of assets transferred and divides it by the daily private patient rate of nursing home care or the average monthly private patient rate. There are certain look-back exceptions and exemptions, particularly for families in difficult situations. These are very often confusing options and often difficult to implement without the expertise of a Medicaid planning attorney. Certain common mistakes and violations can occur. Gifts – The federal government’s annual gift tax exclusion amount per recipient is $16,000 in 2022 via the estate and gift tax exemption. However, Medicaid does not consider this transaction exempt from its look-back period. Even birthday gifts or other special occasions like holidays or weddings may result in a Medicaid penalty. Gifting rules change state by state, making things even more complex. Lack of Documentation – If you transact an asset and receive a value equal to the fair market value without proper documentation, you may violate the rules of the look-back period. This situation is particularly relevant for assets with a government record like boats, motorcycles, or vehicles because of their registration requirements. Irrevocable Trusts – Many individuals incorrectly assume that an irrevocable trust (sometimes inaccurately called a Medicaid Qualifying Trust) is automatically exempt from the look-back period. Creating an irrevocable trust during the look-back period is considered a gift and a countable asset. Irrevocable trusts created before the look-back period are not countable assets. Because Medicaid is a federal and state program, look-back rules vary by state. Even the penalty divisor amount varies by state because the average cost of nursing home care varies. Some states calculate using a monthly average penalty divisor, while others use a daily average penalty divisor. In New York, the rules governing asset transfer under fair market value do not include home care, sometimes called community care. Instead, they only apply regarding nursing home care. Pennsylvania will permit an individual to gift $500 per month without violating the Medicaid look-back period. Understanding the nuances and differences between states and Medicaid rules is crucial to successful planning. Strategies to avoid violating Medicaid look-back rules and avoiding penalties can help families keep some of their assets while still qualifying for Medicaid. A Medicaid planning attorney can help you identify which strategy is best to implement in your circumstance. These strategies can be extremely complex and require professional help. It is easy to have a loved one disqualified, but very difficult to rectify the problem. Caregiver Agreements – Also referred to as Life Care Agreements, Elder Care Contracts, or Long-term Care Personal Support Services Agreements, the formal agreements permit compensation to the caregiver, spending down assets for services without violating the look-back period. These contracts between a caregiving relative, friend, or older adult permit a senior to receive necessary care that Medicaid does not cover while also providing the caregiver with needed compensation. This contract requires the services of an attorney to ensure its careful drafting. Medicaid Exempt Annuities – This annuity type is common to avoid violating the Medicaid look-back period. An annuity is a lump sum payment in cash by an individual in return for a monthly payment for the duration of that person’s life or a set number of years. These annuities are Medicaid compliant because they turn assets into income, lowering the assets of the Medicaid candidate below the Medicaid eligibility limit. Some annuities qualify, while others do not, be certain to choose the right product if the goal is Medicaid qualification. Irrevocable Funeral Trusts – This trust type sets aside a specific amount of money (within state limits) for the sole purpose of funerary and burial costs. This trust helps applicants spend down excess assets without violating the Medicaid look-back period. Undue Hardship Waiver – Filing an undue hardship waiver request occurs when individuals violate the Medicaid look-back period, but it renders them without basic needs like shelter and food. It is difficult to receive this waiver as there must be an effort to exhaust all avenues of asset recovery, including legal options. Recuperation of Assets – If previously transferred assets during the look-back period can be recovered, the previous penalty established can be reconsidered. Some states will review all assets transferred to all people. Partial recovery of said assets may shorten the penalty period in some states but not in others. Though the returned assets will put an applicant over the Medicaid asset limit, these assets can then pay for long-term care as the applicant reapplies. The surest way to avoid violating a look-back period infraction and qualify for Medicaid is to consult a qualified Medicaid planning attorney before you gift or transfer any assets. If a violation has already occurred, a qualified attorney can also offer assistance to rectify what has gone wrong. The best option to avoid the Medicaid penalty period is to plan proactively. Please contact our Houston office at 281-214-0173 or the Bay City office at 979-318-5079 today and schedule an appointment to discuss how we can help you with your legal matters. Via https://www.wthompsonlaw.com/medicaid-penalty-period-avoidance/ Those who have loved ones with disabilities and wish to save money tax-free often create special needs trusts (SNTs) to supplement their loved one’s unique needs and quality of life while continuing to qualify for public assistance. With the ABLE Act (Achieving a Better Life Experience) of 2014, disabled individuals now have a second means of building assets while at the same time not jeopardizing federally funded programs such as Medicaid and Supplemental Security Income (SSI) or Social Security Disability Income (SSDI). Differences Between ABLE Accounts and Special Needs TrustsWhich financial strategy is better? The answer is, it depends. There are some significant differences between them regarding saving and spending rules. ABLE accounts and special needs trusts have different annual saving limitations. Depending on your circumstances, you might use both financial products. However, only one ABLE account is permissible for each disabled individual. While an ABLE account is easier to set up and manage, its primary disadvantage is contribution limits. The total annual contribution possible by a participating account funder is $16,000. Each state has an ABLE limit ranging from $235,000 to $500,000. Persons with disabilities who receive SSI are also subject to additional limitations. A special needs trust has no monetary limits; however, it is more complex to set up and manage. Some families set up an ABLE account for everyday expenditures and maintain an SNT for larger purchases. Similarities Between ABLE Accounts and Special Needs TrustsAn ABLE account has some similarities to an SNT as both are tax-advantaged savings vehicles for individuals with disabilities before the age of 26. The beneficiary, family, and friends can all contribute to the account, and neither an ABLE account nor SNT affects public benefits eligibility. For the beneficiary, funds within both financial products grow and distribute tax-free. But, an ABLE account has more purchase options than an SNT. Qualified Disability Expenses (QDEs) include:
In contrast, an SNT design is to pay for “extras” to make life more comfortable. Extras may include:
This narrower range of permitted expenses is why families will often establish both financial vehicles. Accessing Funds, Taxes, and ExpensesMoney in an ABLE account is easy to access. Many programs offer a debit card linked to the account so you can pay for items directly. In an SNT, the trustee needs to make the funds available to the beneficiary. This oversight by a trustee ensures the beneficiary must get permission before using a credit or debit card to purchase items or obtain cash that may not qualify for the SNT rules. A newer option for an SNT is a True Link debit card, a trustee-managed prepaid card. Still, purchases must not disqualify the beneficiary from government benefits programs. The person with disabilities conducts ABLE account ownership and management. Since the money in an ABLE account is tax-free, management is quite simple. However, they must ensure their expenditures qualify as a QDE. The trustee of the SNT is responsible for following the trust guidelines, keeping records of expenses, and producing tax information annually as the trust grantor pays taxes. When the person who owns an ABLE account dies, the money left is likely to be used for state Medicaid agency services reimbursement. A special needs trust is created with other people’s money (parent, grandparent), and as a third-party trust does not have to repay Medicaid after the beneficiary dies. Every family has different circumstances and needs. A disability planning attorney can explain the varied purposes of an ABLE account or SNT and how they can benefit your loved one. It may be that both financial products suit your planning needs to protect a loved one with a disability. We hope you found this article helpful. Please contact our Houston office at 281-214-0173 or the Bay City office at 979-318-5079 today and schedule an appointment to discuss how we can help you with your legal matters. Via https://www.wthompsonlaw.com/special-needs-trusts-and-able-accounts/ |
About UsHouston, Texas estate planning attorney The Law Office of Whitney L. Thompson is here to help with estate planning needs including trusts, wills, guardianship, and Medicaid planning. Attorney Thompson works hard to represent her client and ensure that they receive the best outcome possible. Call 281-214-0173 to schedule a consultation. ArchivesNo Archives Categories |