Trusted by Three Generations

Trusted With Estate Planning by Three Generations


Planning for Long-Term Care & Protecting Your Assets

Medicaid can be a crucial resource for long-term healthcare, but the rules and regulations are complex. There is number of strategies that may allow you and your family to protect your assets while securing Medicaid eligibility. Our experienced attorneys can guide you through the intricacies of Medicaid planning and regulations in New Jersey and New York, ensuring you or your loved ones receive the care they need without sacrificing your home and other hard-earned savings.

Frequently Asked Questions About Medicaid Planning

Medicaid planning refers to the process of arranging your finances to qualify for Medicaid coverage for long-term care, while preserving your assets for your beneficiaries. It involves understanding Medicaid eligibility requirements and employing legal strategies to protect your assets. Medicaid LTC planning is a critical process for those seeking to manage the high costs of long-term care while preserving assets. It involves understanding complex Medicaid eligibility rules, restructuring assets, possibly setting up trusts or annuities, and planning asset transfers. The goal is to qualify for Medicaid, which can cover expenses like nursing home care, without depleting all the individual’s or family’s assets.

Long-term care can be costly, and Medicaid is a key resource for covering these expenses. Proper Medicaid planning helps ensure that you can receive necessary care without depleting all your assets, thereby protecting your family and securing your financial legacy for your loved ones.

Qualifying for Medicaid while preserving assets often involves strategies like creating trusts, spending down assets in a permissible manner, converting countable assets into exempt assets, and making certain transfers. It’s a delicate process that requires legal expertise to navigate.

Medicaid’s look-back period is a time frame during which all asset transfers are scrutinized. Currently, in New Jersey, this period is 60 months (5 years) for most asset transfers. Transfers made during this period may affect your eligibility for Medicaid and cause penalty.

A Medicaid Trust is a legal tool designed to protect assets while allowing an individual to qualify for Medicaid. Assets in the trust are not counted towards Medicaid’s asset limit, but the trust must be structured and implemented correctly to be effective.

Assets placed in a Medicaid Trust are generally not under your direct control. The trust is irrevocable, meaning it cannot be altered or revoked without the beneficiaries’ consent. Typically, your children or other close family members would be named as trustees and beneficiaries and the trustee and will be able to control the assets in the trust, as well as receive income generated by the assets and have access to the principal of the trust. The structure may vary depending on the state where you’re applying for Medicaid and your individual financial and family circumstances.

Your home may be an exempt asset for Medicaid eligibility, but proper planning is crucial to protect it from Medicaid estate recovery. Strategies may include transferring the home to a trust or a caregiver child, depending on your circumstances.

Gifting assets can be a part of Medicaid planning, but it must be done carefully due to the look-back period. Improper gifting can lead to penalties and a period of Medicaid ineligibility.

Risks include potential ineligibility for Medicaid if done incorrectly, penalties for improper transfers, and the loss of control over certain assets. Professional guidance is essential to minimize these risks.

The earlier, the better. Starting well before the need for long-term care arises, ideally more than five years in advance, allows for the most effective planning and avoidance of the look-back period and related penalties.

Frequently Asked Questions About Medicaid Eligibility

Eligibility for Medicaid LTC is not only based on financial criteria but also on the medical necessity of long-term care. Individuals typically must be 65 years or older, blind, or disabled and demonstrate a need for a level of care typically provided in a nursing home. Specific criteria for the level of care required can vary by state.

Income limits are set at a percentage of the Federal Poverty Level, which can change annually. In many states, the income limit for an individual applying for Medicaid LTC in New Jersey is $2,742 per month (as of 2023), but these figures can vary. For those with income above this limit, “spend down” programs or Qualified Income Trusts may be used to still qualify for Medicaid.

For an individual, the asset limit is often around $2,000, but it varies by state. Countable assets typically include bank accounts, stocks, bonds, and real estate other than the primary residence. Certain assets like a primary home (with an equity limit of $1,033,000 in New Jersey as of 2023), personal belongings, a car, and burial plots are usually exempt.

Exemptions are crucial in Medicaid planning. Besides the primary home, one vehicle, personal belongings, and burial plots, other exemptions may include life insurance with a face value under a certain limit, certain types of annuities, and assets in specific kinds of trusts. The rules for these exemptions are complex and state-specific.

Protecting a home from estate recovery involves careful planning. A house may be exempt if a spouse, child under 21, blind or disabled child, or caretaker child (who lived in the home for two years prior to the Medicaid recipient’s institutionalization) resides in it. In certain circumstances, transferring a home to these individuals may avoid estate recovery, but such transfers must be done carefully due to the look-back period.

The look-back period is a critical element in Medicaid planning. It’s a timeframe during which Medicaid reviews any asset transfers to ensure they weren’t done to qualify for Medicaid. This includes selling assets below market value or giving them away. Understanding and planning for the look-back period is essential to avoid penalties.

The standard look-back period is 60 months (5 years) in most states. However, it’s important to note that this period is not retroactive from the date of Medicaid application but from the date the individual is applying for and is eligible for Medicaid.

Violating the look-back rules typically results in a period of ineligibility for Medicaid. The length of this penalty period is determined by dividing the value of the transferred assets by the average monthly cost of nursing home care in the applicant’s state. This penalty can delay much-needed Medicaid coverage.

Gifting money or assets during the look-back period can lead to penalties unless they meet certain exemptions, like gifts to a spouse or a disabled child. Small, occasional gifts may not trigger penalties, but large gifts or asset transfers will likely be scrutinized. It’s important to consult with an elder law attorney for specific advice, as the rules can be quite complex.

Medicaid estate recovery is a process where the state seeks reimbursement from the estate of a deceased Medicaid recipient for the costs of services like nursing home care. The extent of recovery can vary by state, but typically includes all assets passing through probate.

Preparing for a Medicaid LTC application involves several steps: organizing financial documents, understanding your state’s specific Medicaid rules, and possibly restructuring assets. It often involves legal strategies like setting up trusts or annuities, spending down assets in a permissible way, and ensuring compliance with the look-back period.

Long-term care insurance is an alternative for those who can afford the premiums and want to avoid Medicaid’s strict financial limits. It covers long-term care services and provides more flexibility than Medicaid, which has stringent eligibility requirements.

The Medicaid Look-Back Period is a critical timeframe during which Medicaid examines any asset transfers to ensure they were not made to qualify for Medicaid. This period typically covers the 60 months (5 years) immediately preceding the Medicaid application. During this time, if assets were transferred for less than their fair market value (such as gifts or below-market sales), it can affect eligibility. The look-back period is not retroactive from the date of Medicaid application but starts from when the individual is applying for and is eligible for Medicaid. Notably, the rules and length of this period can vary by state, especially concerning transfers involving trusts.

If a violation of the look-back rules is found (i.e., if assets were transferred for less than fair market value), a penalty period is imposed. This period is a time during which the individual is ineligible for Medicaid LTC benefits. The penalty period is calculated by dividing the total value of the transferred assets by the average monthly cost of private nursing home care in the applicant’s state. For example, if $100,000 worth of assets were transferred and the average cost of care is $10,000 per month, the penalty period would be 10 months. The penalty period begins from the time the individual would otherwise be eligible for Medicaid, not from when the transfer occurred. This calculation varies by state, as the cost of care is not uniform across the country.

Yes, the income and assets of a spouse (community spouse) are considered in determining eligibility for Medicaid LTC. However, there are spousal impoverishment rules to protect the community spouse from being left without resources. These rules allow the spouse to retain a certain amount of assets and income.

Yes, Medicaid has specific rules for married couples. These rules take into account the needs of the community spouse, allowing them to keep a portion of the couple’s assets and income. The rules are designed to prevent the impoverishment of the community spouse while the other spouse receives Medicaid-funded long-term care.

Yes, the income and assets of a spouse (community spouse) are considered in determining eligibility. However, there are spousal impoverishment rules in place to protect the community spouse from being left without resources.

A Medicaid planning attorney helps navigate complex eligibility rules, advises on asset protection strategies, assists with the application process, and can provide legal representation if necessary.

Milvidskiy Law Group P.C. is a comprehensive elder law and estate planning firm dedicated to guiding seniors and their families through a variety of legal challenges associated with aging. Our expertise covers a wide range of services, including wills and trusts, asset protection, elder care and Medicaid planning, estate and inheritance tax planning, trust and estate administration, business succession planning, special needs planning, and more.

Why Choose Us?

Why Choose Us?

  • Experienced Team: Our elder law attorneys are well versed in Medicaid planning and application process both in New Jersey and New York and will help you determine the best route for your unique situation.
  • Full-Service Elder Law Practice: Not only we assist our clients with Medicaid planning, but we help their families with Medicaid application process to ensure that your planning strategy is properly executed.

  • Exceptional Customer Service: Our experienced staff is available to answer your questions and assist you every step of the way. You don’t have to go it alone.

What Our Clients Are Saying

Milvidskiy Law Group P.C.5.0 Based on 61 reviews from ★★★★★ Highly recommend using the services of Milvidskiy Law Group! We were pleased with the level of service, knowledge and forward thinking. Mr. Milvidskiy offered creative and thoughtful ideas for us. Thank you!Elena A. ★★★★★ This firm was wonderful and I highly recommend them. They took the time to explain everything to me as I set up my Estare plan. They answered all my questions and did not pressure me into anything I didnt want it need. I feel very at ease and relieved that this was taken care. I also know they remain there if I have any questions down the road. All I have to do is call. Best thing I did this year!!susan C. ★★★★★ Mr. Milvidskiy and his staffs are so professional and helpful all the time. I recommend them highly to anyone.Phoebi L. ★★★★★ My experience with the Milvidskiy Law Group was a positive one. They were always available to answer any of my questions. If I did have to leave a message or email a question/concern they would always respond back in a reasonable amount of time. I would recommend this Law group!Teresa W. ★★★★★ My husband and I had a very positive experience working with the Milvidskiy Law Group. They were very knowledge and professional and an overall pleasure to work with. I strongly recommend using this law firm.barbara W. ★★★★★ The Milvidskiy team was incredible and I am so grateful for their timeliness, compassion, and patience during such a difficult time for our family. During our time at the hospital, many people talked to us instead of speaking with us, however, their legal team was the exception. I am very impressed with how they navigated the tense situation with some of our family members and felt that their empathy was heartwarming. I will be forever grateful for their help ensuring our grandfather's wishes were listened to and will be honored.Thomas B. ★★★★★ They were fast and efficient.Vanesa P ★★★★★ We were very impressed with the serviced we received from the Milvidskiy Firm. They were responsive and very professional. They delivered as promised. We highly recommend them! Their fees are quite reasonable.Rose F. ★★★★★ Estate Planning can be a complicated and technical endeavor for most individuals like myself and my wife. In additon, finding a competent Estate Planner can be equally difficult. However from the outset we were quickly assured that we had selected the right firm to handle all our Estate needs. Our attorney,Andre, and his assistant, Pamela, emphasized, that in order for a plan to be successful, it must be understood in it's entirerty and it needs to meet all the individual concerns of the client. In that vein technical aspects were explained in laymans terms and all our questions were not only encourgaged but answered fully to our satisfaction. We've had experiences with other law firms but by far we found the Milvidskiy Law Group to be Professional, Trustworthy, Experienced In the Law and Genuinely interested in the welfare of their clients. A1 in our book!!! Sal & Theresa MinieriSal M.js_loader

Disclaimer: Results may vary depending on your particular facts and legal circumstances.

Book a Discovery Call

Let’s get started.

Our Client Coordinators, Erica and Joy, are standing by. Fill out the form below to book your 30-minute call. These calls are free of charge, and designed to answer your questions, walk you through the process, and help you get started.