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Medicaid Planning

Medicaid Planning is the process of engaging in an estate planning strategy that will later qualify an individual for Long-Term Care Medicaid Benefits.

Qualifying for Medicaid benefits for long-term care is riddled with complex rules and regulations and should not be attempted without the advice and services of an experienced elder law attorney.   In Arkansas, the general rule is that you can have no more than $2,000, an auto and a home in order to qualify for Medicaid’s Long-Term Care Program.  Because of the low asset requirements, many times, people are tempted to give away assets thinking that it will qualify them for Medicaid.  Unfortunately, giving away assets will usually only delay the applicant’s eligibility which is the opposite effect they wanted to accomplish.  The general rule of thumb is for every $4,700 you gave away, it delays your Medicaid eligibility by one month by assessing a one month “penalty” period for every $4,700 improperly gifted.  If done properly, however, with the help of an experienced elder law attorney, these eligibility delays can be minimized and in some circumstances eliminated altogether when done in accordance with the Medicaid rules.

For gifting away assets, there is a “Safe Harbor” for assets that were gifted away more than 5 years before applying for Medicaid.  Basically, upon applying for Medicaid, the State only looks back 5 years or 60 months to see if any assets were given away.  Assuming there are no gifts made within the 5 year period, any gifts made more than 5 years ago, will be ignored for the asset eligibility test for Medicaid.  This is referred to as the 5-year look back rule. 

Despite the complex and often confusing Medicaid eligibility rules, our office is able to assist individuals and families in developing long-term care plans to avoid depleting their assets should they become ill and need long-term care.   Also, for those individuals who are already in a nursing home, despite the lack of planning, our office can still help families preserve some assets and still qualify for Medicaid assistance before they run entirely out of resources.

Keep in mind that Medicaid planning is very fact specific and not all planning techniques work in every situation. Before giving away or spending down any of your assets, contact our office to schedule a FREE initial consultation to discuss Medicaid benefits, to review your planning options, and assist you in your planning needs.
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