What Medicaid Planning by an Elder Law attorney comes down to is finding a legal strategy to preserve an elder’s assets for his or her care using Medicaid benefits, while leaving his or her remaining preserved assets that were not needed to his or her estate. There are two major strategies used by attorneys to accomplish this, Legacy Trust Planning or Crisis Medicaid Planning, typically following a major healthcare event. I also draft Medicaid Planning Memorandums to help elders be advised as to options that can be taken to save assets with Estate Planning tools and following statutory law and Medicaid administrative code provisions.
Legacy Trust Planning
By establishing an irrevocable trust, an elder can gift their home and other assets to this trust with a trusted child or friend serving as Trustee and in five years time, none of the assets in the trust’s name will be deemed as countable by Illinois Medicaid. There are tax advantages and asset protection from Financial Exploitation inherent in this trust. It is the most comprehensive Medicaid Planning tool and can hold a wide variety of real estate and other assets.
Crisis Medicaid Planning
Provided the elder has the capacity to sign a new Power of Attorney for Property, half of their liquid assets can be saved quickly and half of the proceeds from real estate may be also saved, once the property is sold. There are Administrative Code Provisions and Statutory Laws that protects spouses, minor children or adult children with disabilities, to name a few. The most common asset protection is the Gift/Annuity strategy that allows an elder to save half of their assets and use the other half to leverage their admission into a desirable skilled nursing facility. The gifted funds can be re-gifted for the elder’s benefit in goods and services, with the remaining assets at the elder’s death passing to their estate.
Medicaid Planning Memorandum
By obtaining a Medicaid Planning Memorandum an elder will have knowledge of strategic options to employ to save their home or purchase a share of a child’s home. They may want to help one of their children obtain the family home or desire to live with one of their children while aging in place with dignity. They may want to make sure their spouse is fully protected from Medicaid liability and sheltered from contributions to their care, or to structure assets to be paid to their spouse as a part of asset protection planning and all of this is helpful knowledge when making decisions in later life.
