Crisis Medicaid & Nursing Home Planning
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Louisiana Elder Law Attorney & Medicaid Planning
No One Knows What the Future Will Bring
Quality of Life. Quality of Care. Asset Protection.
Is it time for you, or a loved one, to go into a nursing home?
Most people answer, “No, because who wants to think about such things! The reality is that 70% of Americans over the age of 65 will need long-term care. When you get right down to it, that’s 7 out of every 10 people who will need the support of a retirement community or nursing home.
Planning Ahead Can Make a Significant Difference in Your and Your Spouse’s Quality of Life.
Know The Rules. Know Your Options. Contact Us Today. We Can Help. (855) 213-6400
Trusted. Experienced. Focused on You.
Contact us today to start planning with confidence.
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How much will long-term care cost?
The average cost of nursing home care is $108,405 per year (Genworth Cost of Care Survey, 2023). If costs increase by 3% per year, the average costs in 20 years will be $195,791. It’s essential to do the math before you need long-term care.
Very high-income or high-net-worth individuals can self-fund long-term care costs. For the rest of us, planning is crucial to avoid nursing home poverty!
How will you pay for long-term care?
Here are five (5) ways to pay for long-term care.
- Pay yourself (if you can afford it)
- Someone else pays (your children or long-term care insurance)
- Medicare (pays nothing after 100 days)
- Aid and Attendance Benefits (only for Veterans)
- Medicaid
Improper planning can lead to financial ruin. Over 6 out of 10 nursing home residents receive Medicaid, which covers over fifty percent (50%) of ALL nursing home costs in America (Morning Star survey, 2018). Long-term care planning, including Medicaid planning, may be necessary to ensure a surviving spouse is not left behind in poverty.
No matter what your age, it is best to be prepared for an unexpected health crisis or illness. The first step in any crisis medical plan is education. The more you know, the better you can protect your family.
Knowledge is power! Educate yourself by attending a FREE informational Workshop, or click the image to download our FREE brochure to help you begin the planning process!
Other Useful Articles
You Do Not Need to Wait 60 Months to Qualify for Medicaid!
Many people mistakenly believe it takes 60 months to qualify for Medicaid. These 60 months are often referred to as the “five-year rule” or the “five-year look-back period.” What this means is that Medicaid will review financial transactions that occurred within 60 months prior to filing a Medicaid application (the “snapshot date”) and impose a penalty (a delay in eligibility to receive benefits) for any transactions for less than fair value (i.e, gifts) that don’t meet an exception to the rules. Transactions more than 60 months before the “snapshot date” are not reviewed and therefore escape scrutiny, meaning a transaction occurring 61 months before the snapshot date is effectively off the radar.
When an unexpected health crisis occurs, we can still help! The art of proper planning is knowing the rules and leveraging exceptions. You cannot predict when a health crisis will happen, so it is very common for long-term care needs to arise without warning or time to prepare. Not all transactions within the look-back period trigger a penalty (a delay in receiving benefits). It is possible to qualify for Medicaid without penalty well within the look-back period, but only with guidance from an experienced, qualified Medicaid attorney!
Be careful! A nursing home or hospital that offers to file a Medicaid application cannot provide legal advice on how to protect your assets and is under no obligation to do so. Applying for Medicaid before qualification could result in being ineligible for benefits for more than 60 months. In fact, the potential penalty is unlimited even though the look-back period is only 60 months! Consult a qualified Medicaid planning attorney before applying. Medicaid law is complex, so not every attorney has the experience to provide competent advice. You
would not consult a general family doctor about a heart problem, so don’t make the same mistake with your lawyer.
Our Approach
Care, compassion, and understanding are at the heart of our elder law practice at Theus Law Offices.
With over 25 years of practicing law, attorney J. Graves Theus works hand-in-hand with individuals and families to address the legal issues and financial implications surrounding long-term care. Our attorneys address the legal issues and financial implications surrounding long-term care. Our experienced, competent, and insightful team addresses key areas, including:
- Long-Term Care Planning, including Medicaid
- Asset Protection
- Veteran’s Benefits
- Healthcare and Financial Powers of Attorney
- HIPAA Releases
- Advance Healthcare Directives
- Interdiction
Our attorneys will review your existing estate planning documents, recommend strategies to preserve assets, and assist with the Medicaid application process.
While planning for long-term care expenses well in advance is always advisable, if your loved ones already need long-term care, we can still help. While options may be more limited during a crisis, our attorneys will find solutions to pay for long-term care costs.
Knowing the devastating financial impact of the failure to plan is not enough. You must act, and there is no better time than the present. Ask us how we can help create a long-term care plan, special needs trust, or other legal structures to help preserve assets from nursing home poverty and ensure worry-free golden years.
Trusted. Experienced. Focused on You.
Contact us today to start planning with confidence.
Medicaid and Long-Term Care Terms You Should Know
At Theus Law Offices, we understand that legal terminology can be confusing. To help clarify, we’ve provided definitions of key terms related to Medicaid planning and long-term care:
Medicare
An entitlement program that provides healthcare benefits to individuals over age 65 or under 65 with certain disabilities, regardless of income or net worth. Medicare covers doctor visits and hospital care but offers very limited long-term care benefits—not exceeding 100 days and only for skilled nursing care.
Medicaid
A joint federal-state program that pays for long-term care costs for individuals who meet specific asset and income criteria. Unlike Medicare, Medicaid has no age restriction, so with proper planning, anyone who needs long-term care can qualify.
Look-Back Period
A 60-month (five-year) period prior to the filing of a Medicaid application during which Medicaid reviews all financial records of the applicant. Any transfers of assets for less than fair market value during this period may result in penalties or delays in eligibility.
Crisis Planning
Planning to qualify for Medicaid when long-term care is needed immediately or within the five-year look-back period. Though options may be more limited compared to pre-planning, effective strategies can still protect significant assets even in a crisis situation.
Pre-Planning
Planning for long-term care expenses well in advance while you are still healthy. Pre-planning allows for more comprehensive strategies to protect virtually all assets without loss of control and preserves tax benefits like the step-up in tax basis at death.
Asset Protection
Legal strategies designed to safeguard your assets from being depleted by long-term care costs. This can include the use of trusts, transfers, and other planning tools to ensure your assets are preserved for you and your family.
Advance Healthcare Directives
Legal documents that specify your preferences for medical care if you become unable to make decisions for yourself. This includes living wills and healthcare powers of attorney.
Interdiction
A legal process in which a court appoints a guardian to manage the personal and financial affairs of an individual who is incapable of doing so due to incapacity or disability.
Special Needs Trust
A trust designed to provide for the needs of a disabled individual without disqualifying them from government benefits like Medicaid. The trust can pay for supplemental needs that are not covered by public assistance programs.
Step-Up in Tax Basis
A tax provision that adjusts the value of an inherited asset to its fair market value at the time of the owner’s death. This can significantly reduce capital gains taxes if the asset is later sold by the heir.
Long-Term Care Planning
The process of preparing for future healthcare needs, including nursing home care or in-home assistance. Effective planning helps protect assets and ensures that you receive the quality care you need without unnecessary financial hardship.
Nursing Home Poverty
A situation where an individual’s assets are exhausted due to the high costs of nursing home care, potentially leaving a surviving spouse or heirs with little to no financial resources. Proper planning seeks to prevent this outcome.
Book your FREE 15-minute initial consultation where you get your questions answered and you decide the next steps. No pressure. No gimmicks. No legal jargon. Just friendly conversation.
Frequently Asked Questions
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Medicare is an entitlement program that is not based on income or net worth. Specifically, it is a health care benefit for all individuals over age 65 and for those under age 65 who are disabled. Medicare covers doctor visits and hospital care, but only minimal long-term care benefits (not to exceed 100 days and then only for skilled nursing).
Medicaid is a joint federal-state program that pays for long-term care costs. Medicaid covers approximately 49% of all long-term care costs in the United States. Originally, Medicaid was a health benefit for the elderly. However, the program has been diminished, and eligibility is now determined by a means-based test, meaning only people with assets and income below certain limits qualify for benefits. Unlike Medicare, there is no age restriction to qualify for Medicaid, so with proper planning, anyone who needs long-term care can be eligible.
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The “lookback period is the period of time Medicaid will look at all financial records of a Medicaid Applicant. The look-back period begins on the date the Medicaid application is filed. The look-back period is sixty (60) months.
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NO!
An outright gift to a child results in loss of control and also puts your assets at risk. A “parked” outright gift by a parent to a child could be seized, sold, or involuntarily transferred upon the divorce, bankruptcy, or death of a child. A gift to a properly designed trust would allow the parent to retain control and access without jeopardizing eligibility for long-term care benefits.
Further, significant adverse tax consequences result from an outright gift. For example, if a parent donates assets (e.g., stock originally purchased for $10,000) outright to a child, the child will unnecessarily recognize taxable income if the assets are later sold (e.g., $100,000 – $10,000 = $90,000 of taxable income). Conversely, if the assets were donated to the child in a properly designed trust (includible in the estate of the parent for tax purposes, but excluded for purposes of Medicaid qualification), the assets would receive a step-up in tax basis on the death of the parent, resulting in little or no taxable gain on the subsequent sale by the child.
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Crisis Planning is the process of qualifying for Medicaid within the five-year look-back period. If you currently need nursing home care, a crisis plan will be required to qualify for Medicaid if you are not already financially eligible. Though options may be more limited than with a pre-plan, if you need help quickly, substantial savings can still be achieved with a well-designed crisis plan. Pre-Planning is the process of planning for long-term care expenses while you are still healthy. Virtually all assets can be protected with a proper pre-plan without any loss of control while also preserving the tax benefits of the step-up in tax basis at death.
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YES!
While planning for long-term care expenses well in advance is always advisable, if your loved ones already need long-term care, we can still help! While options may be more limited in a crisis plan, our attorneys will find solutions to pay for long-term care costs. Significant assets can still be protected even during a crisis-planning period, regardless of the five-year look-back period!
