PROTECT YOUR ASSETS · PDF file Attorney Mark D. Munson, CELA* Shepherd Elder Law Group, LLC...

Click here to load reader

  • date post

  • Category


  • view

  • download


Embed Size (px)

Transcript of PROTECT YOUR ASSETS · PDF file Attorney Mark D. Munson, CELA* Shepherd Elder Law Group, LLC...

  • Attorney Mark D. Munson, CELA* Shepherd Elder Law Group, LLC

    August 9, 2018

    PROTECT YOUR ASSETS: Long-Term Care and

    Medicaid Planning

    Hutchinson | Overland Park

    * Distinguished as a Certified Elder Law Attorney by the National Elder

    Law Foundation, as accredited by the American Bar Association.

  • Asset Protection Planning

     Tax Planning

     Insurance Planning

     Limited Liability Entities

     Risk Management Planning

     Medicaid Eligibility Planning

  • Medicaid Eligibility


     What is Medicaid Eligibility?

     What is Medicaid Eligibility Planning?

  • Medicaid Eligibility


     Eligibility Criteria

    • U.S. Citizen

    • Elderly (age 65 or older), blind, or disabled

    • $2,000 or less in assets

    • Income less than the cost of care


     Asset Exemptions • Home up to $572,000 (if intent is to return)

    • Automobile

    • Personal property

    Medicaid Eligibility


     Asset Exemptions (continued) • Pre-paid funeral arrangements ($1,500 burial

    fund; $4,500 irrevocable trust account; up to

    $7,000 of irrevocable funeral plans and burial

    insurance for funeral services (with unlimited

    value for caskets, vaults, spaces, etc.)

    • Life insurance with no potential cash surrender

    value (i.e., term, group, Veterans, etc.) and life

    insurance up to $1,500 face value

    Medicaid Eligibility


     Income Exemption


    This means all income must go

    toward long-term care

    (except $62 monthly for personal needs allowance).

    Medicaid Eligibility

  • Medicaid Eligibility


     Eligibility Criteria

    • For the spouse in need of long-term care, the asset

    allowance and exemptions are the same as a single


    • The “Community Spouse” is allowed to keep

    additional assets and may be entitled to income

    from the spouse who needs long-term care.


     Asset Exemptions

    • Home (unlimited value)

    • Automobile (unlimited value)

    • Retirement accounts belonging to the CS

    (i.e., IRAs, 401(k)s, etc.) (KS only)

    Medicaid Eligibility

  • • In addition to the asset exemptions, the

    “Community Spouse” is allowed to keep $0

    to $123,600 in non-exempt marital assets,

    depending on the amount of the couple’s

    non-exempt marital assets.


     Resource (or Asset) Allowance

    Medicaid Eligibility

  • If a couple’s combined non-exempt

    assets are:

    Community Spouse

    may keep:

    $0 - $24,720 ALL

    $24,721 - $49,440 $24,720

    $49,440 - $247,200 HALF of the combined assets

    Over $247,200 $123,600


     Resource Allowance

    Medicaid Eligibility

  • What are Examples of

    Non-Exempt Marital Assets?

     Checking Accounts

     Savings Accounts

     Certificates of Deposit

     Stocks

     Bonds

     Mutual Funds

     U.S. Savings Bonds

     Non-Homestead Real


     Mineral, gas, and oil


     Life Insurance with Cash Value

     Non-Qualified Annuities

     Nursing Home Spouse’s

    Retirement Benefits (IRAs,

    401(k)s, etc.)

     Non-Retirement Investment Accts

     Inheritances

     Gifts from Family and Relatives

     Cash on hand

  • The remaining balance of $100,000 must be spent

    down before medical assistance will begin paying for

    spouse’s long-term care costs.


     Potential Problem

    Non-Exempt Marital Assets = $200,000

    Community Spouse Resource Allowance = ($100,000)

    Remaining Balance = $100,000

  • • The Community Spouse is entitled to have up

    to $2,030.00 of monthly income. To get to this

    level, income of the “nursing home spouse”

    can be given to the Community Spouse.


     Income Allowance


    John and Jane Doe are married. John is in the nursing home

    and has a monthly income of $1,000. Jane is still at home and

    has a monthly income of $800. Jane can have John’s entire

    monthly income of $1,000 given to her because $1,800

    (John’s monthly income of $1,000 plus Jane’s monthly

    income of $800) is less than $2,030.00.


     Income Allowance

  • EXAMPLE (continued)

    If John’s monthly income was $2,000 per month, only

    $1,230 could be given to Jane, and John would have to

    pay $708 toward his care at the nursing home. John is

    allowed to keep $62 per month as his personal needs



     Income Allowance

  • Medicaid Eligibility

    Any Questions?

  • Medicaid Eligibility


  • Planning for Incapacity

     Durable Power of Attorney

    • For property and financial decisions

     Power of Attorney for Health Care

    • For health and medical decisions

    • HIPAA

  •  Power to create trusts and make gifts

     Power to fund trusts and transfer assets

     Power to deal with retirement benefits -

    401(k)s, IRAs, etc.

    Powers to be Included in your

    Durable Power of Attorney

  •  Need to make sure that medical assistance

    eligibility planning can be accomplished if

    you are incapacitated.

    Powers to be Included in your

    Durable Power of Attorney

  • The number one goal and objective in any asset

    protection planning engagement involving Medicaid

    should be to protect the assets of the original

    owner(s) so that assets are available if needed and

    protected if not needed.

    Number One Asset Protection

    Planning Goal and Objective

  • How Do I Protect My Assets?

     The key to asset protection planning is

    getting assets out of your name so that you

    no longer have legal ownership over those

    assets so that they are not available to you.

  • How Do I Protect My Assets?

     If your assets are available to you, they

    must be used on your care, including long-

    term care costs.

  •  The only way to get assets out of your

    name is to give them away by making

    gifts. A gift is a transfer of assets where

    you do not receive anything in return.

    How Do I Get Assets

    Out of My Name?

  • Considerations When

    Gifting Assets

     Five–year look-back period.

     Determination of penalty period. (Calculated by dividing the value of gifts within the

    last five years by the average daily private pay

    nursing home cost in Kansas, which is currently

    $197.88) ($160.73 in Missouri)

  • Considerations When

    Gifting Assets

     Delayed penalty period start date

    (The need for asset protection after a gift has been made is now far more important than ever before.)

  • Delayed Penalty Period

    Start Date

     In the event a gift or gifts is/are made within

    the five-year look-back period, the penalty

    period for the gift(s) will not start until all four

    of the following conditions are met and


  • Delayed Penalty Period

    Start Date

     The Medicaid applicant is in the nursing home;

     An application for Medicaid is filed;

     The Medicaid applicant’s income is less than the cost

    of care; and

     The Medicaid applicant’s non-exempt assets/resources

    are less than $2,000.


    Four years ago, Jane Doe gave away (gifted)

    $60,000 to her children. Jane has a 303 day

    penalty period ($60,000 / 197.88 = 303) and is

    now in a Kansas nursing home. She has applied

    for medical assistance, her income is less than the

    cost of care, and she has $20,000 in

    assets/resources remaining.

  • EXAMPLE (continued)

    Jane’s 303 day penalty period will not start until

    the $20,000 she has in assets is spent down to

    $2,000 or less.

  • In order to get Jane through the 303 day penalty

    period, it is likely that the beneficiary or

    beneficiaries of Jane’s $60,000 gift will have to

    give that money back to Jane so she can pay for

    her nursing home care.

    EXAMPLE (continued)