Can Returning Previously Gifted Assets To The Original Owner Help Them Qualify For Medicaid?

Many people operate under the misconception that they can gift assets to friends and family members in order to meet eligibility requirements for Medicaid. In reality, doing so within five years of applying for Medicaid could result in a denial of the Medicaid application. Fortunately, Florida Medicaid rules allow families to remedy this mistake by doing a full give-back of the assets. The worst-case scenario would be to give gift assets to a disabled child or third party who cannot return those assets. It is not advisable to transfers any assets in consideration of nursing home eligibility without first consulting an elder law attorney.

Can I Purchase A Medicaid-Qualified Annuity If I Do Not Have Elder Law Planning In Place?

Medicaid-qualifying annuities are not used as commonly in Florida as they are in other states. Under Florida rules, there are better annuity options for both spouses and non-married people who need nursing home care. Prior to the passage of the Deficit Reduction Act of 2005, Medicare-qualifying annuities were very commonly used as a means to protect assets. Once that law changed, the use of annuities was highly curtailed due to the legal effect and the ease of qualification for annuities. For annuity purchases within a five-year lookback period or annuitization of an existing annuity, the terms of the proposed annuity purchase should be reviewed with an elder law attorney.

I caution anyone who could require nursing home care within five years and is following the guidance of an annuity insurance agent in the purchase of annuities. Most annuity insurance agents do not assist people in the Medicaid application process and may not have the experience or authority to advise anyone on putting cash or other investments into an annuity; such advice, when given for the primary purpose of protecting assets from nursing home costs, enters the realm of law and should therefore be dealt with by an attorney.

Can Using A Gift And Loan Strategy Preserve My Savings And Expedite Eligibility For Nursing Home Care Medicaid Assistance?

While it is possible to use a gift and loan strategy to protect some assets from being used to pay for nursing home care, this is typically only done as a last resort. This is because the gift and loan strategy does not preserve as many assets as other Medicaid asset protection options. Most people who find that the gift and loan strategy makes sense are caregivers who are located out of state and have a parent located in a Florida nursing home whom they are not able to regularly visit. The gift and loan strategy is very complicated and must be discussed and diagramed with a lawyer in order to determine whether it’s the right option for a particular client’s situation.

Is There Something That Can Be Done To Protect An Unmarried Person’s Assets From Medicaid?

There are plenty of options available for a single person who wants to protect their assets from Medicaid. Medicaid is not just for married couples who are concerned about the spouse living at home. Many Medicaid rules and exceptions to Medicaid rules are conceptualized on the basis of protecting the person’s quality of life and quality of care within the nursing home, as well as protecting disabled beneficiaries and not creating a traumatic financial stress to their assets and retirement savings. Further, Medicaid rules do not penalize someone for spending their own money on themselves.

There’s plenty that can be done to protect assets, such as paying down debt, improving a primary residence, purchasing irrevocable pre-paid funerals, and so forth. There are also asset protection and asset transfer strategies, such as personal service contracts, pooled special needs trusts, income-producing real estate, and the gift and loan strategy. The appropriate option for a particular client will depend on the client’s family situation, the type of assets they own, and their goals and desires.

In the case of disabled or incapacitated clients, the wording of that client’s durable power of attorney is key. Therefore, as a pre-planning measure, a durable power of attorney needs to be reviewed and updated with the guidance of an experienced elder law attorney. If worded poorly, the durable power attorney can be used to deny asset protection actions at the time of need. Most estate planning attorneys who do not practice in the area of Medicaid law will curtail their durable power attorney to protect for other reasons, but not for Medicaid planning. Typically, Medicaid and long-term care planning should be considered as a general rule for people over age 70 with less than one million dollars in assets, but exceptions to this rule can be made depending on the circumstances.

For more information on Return Gifted Assets Back To Original Owners, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.

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