Planning for Medicaid is not really something any of us have in the forefront of our minds when planning for our future and eventual retirement, and while many of us will never need it, it’s always good to know your options when it comes to Medicaid planning.
The following are the most frequently asked questions I receive regarding Medicaid and Medicaid planning.
What is a “Miller Trust” or “Qualified Income Trust”?
Medicaid has income eligibility requirements (in addition to resource limits and other requirements). The income cap for year 2019 is $2250 per month. If an individual, who is applying for Medicaid, has income over the cap, then a “Miller Trust” can be created to hold the income to pass such eligibility requirement. “Miller Trusts” are also known as “qualified income trusts” or as “QITs.”
Will I, as the spouse who lives at home be allowed to keep any of my spouse’s income if my spouse lives in a nursing home and is on Medicaid?
It depends on the income of each of you and what strategy is employed. If the income of the community spouse is greater than what is called the minimum monthly maintenance needs allowance (“MMMNA” is $3160.50 for 2019), then there are limited situations when we can divert income from the institutionalized spouse so that this income is above the MMMNA. Also, There can be a diversion of income to the community spouse so that the community spouse has income up to the MMMNA. However, it is best to not “spend down,” so this situation must be carefully reviewed with your experienced elder law attorney.
If we get my loved one on Medicaid, are we going to lose the family home?
Can I transfer or give away my assets to obtain Medicaid?
Can’t I always transfer $15,000 per year to my children without a penalty?
What are countable resources and non-countable resources?
Do the accounts that I own jointly with someone else count toward my Medicaid eligibility?
Do the assets of the community spouse count even if there is a prenuptial or postnuptial agreement?
Is buying an annuity the best way to protect all of my resources?
It depends on the factual situation. With the rule change that became effective as of September 1, 2004, “Medicaid annuities” became more popular when there is an institutionalized spouse and a community spouse, and their total non-countable resource income exceeds or is close to the MMMNA ($3160.50 for 2019). Before you make a decision, an elder law attorney should be consulted to consider all of the options. Be wary of anyone who advises this is the only option.