15 Oct
Estate planning for Medicaid is vital to protect your assets from long-term care costs. Plan in advance to avoid missteps, shield wealth, and protect your home and assets after Medicaid. Here’s what you need to know to guard your financial legacy.
What is the Medicaid Estate Recovery Program (MERP)?
Medicaid is the combined state and federal program that provides health coverage for eligible Americans who have a limited income. The Medicaid estate recovery program is known as MERP. It allows the state to recover monies it spent on an individual while they were in the program, but they are now deceased.
The state seeks to recover monies it spent on Medicaid benefits. But only specific ones. The Medicaid estate recovery program allows recouping payments made for: community-based services, an assisted living facility, and other long-term care assistance. This applies to recipients who were aged 55 or older, or who were permanently institutionalized. Other benefits received under Medicaid can be reclaimed as well. However, there are exceptions to the Medicaid estate recovery program. These can include hardship waivers, and surviving members of the family. A Medicaid lawyer or elder law attorney can help you navigate these nuances.
How Medicaid Recovery Affects Families
The Medicaid estate recovery program can require states to seek repayment of costs from the deceased’s estate. This can be devastating to families. Repaying the state for the long-term care of a loved one who received Medicaid funding can put an inheritance at risk. It can force families to sell the deceased’s home. Properties or other assets may also need to be sold.
The fallout of a life-changing event like this can negatively affect families. It can lead to significant harm with a great deal of distress. This includes:
- Loss of inheritance
- Financial hardship
- Unexpected bankruptcy
- Unintended homelessness
- Losing family property or wealth
Consulting with an elder law attorney helps families keep assets before they become part of recovery. An elder law attorney or Medicaid lawyer will help you understand what’s at risk. The attorney will discuss choices available to avert the risk.
Legal Strategies to Protect Your Assets Before Recovery
The most effective way to legally protect your assets is to strategize and implement a plan before recovery claims are made. A Medicaid lawyer or an elder law attorney can help make your assets challenging for creditors to access. One way is to devise legal barriers. Another is to set up ownership of a different entity. More ways of doing this include:
- Use statutory exemptions to shield your assets.
- Reroute excess income with a Miller Trust. It won’t be counted toward the Medicaid income limit. And, it can be used for medical expense payments.
- Creating a Medicaid asset protection trust (MAPT).
- Gifting assets.
Why You Should Work with a Medicaid Lawyer
Working with a Medicaid lawyer or an elder law attorney is invaluable. Their expert guidance will help you avoid costly mistakes. They can advise you as follows:
- Assist with Medicare, Medicaid, and Social Security planning.
- Assure Medicaid eligibility.
- Cover costs of in-home care, assisted living, convalescent home, and long-term care.
- Protect your assets with a Qualified Income Trust (QT), such as a Miller Trust, or Medicaid asset protection trust. This can be used to qualify for long-term care benefits for those over the Medicaid income limit.
Working with a Medicaid lawyer or an elder law attorney gives you peace of mind knowing you have an expert on your side. They are up-to-date on the changing landscape of laws and regulations impacting older adults.
Plan Early to Protect What Matters Most
Plan early to take the uncertainty out of decisions. It protects family members from having to struggle with them later, on their own. Instead, you can proactively plan the best steps to protect your assets, provide for your healthcare, and ensure a legacy for your loved ones. Make the educated decisions you need with clarity now. It will secure your legacy from what may come in the future.
MERP can be avoided or minimized with the right plan.
Take the initiative to create the right plan for your future with an experienced elder law or Medicaid attorney. The right strategy can help you avoid or reduce claims on your assets through the Medicaid estate recovery program, with tailored options that fit your needs. Planning early with a lawyer who understands the complex legal landscape affecting older adults is one of the most effective ways to protect your financial legacy. Our attorneys at Livens & Reed Attorneys at Law specialize in elder law and provide sound estate planning with a strong focus on Medicaid eligibility. Call us today for your free initial consultation. You’ll be glad you did.
