As Medicaid attorneys, we help elders obtain Medicaid eligibility, because the program will pay for long-term care. Medicare does not pay for a stay in a nursing home, and a very significant percentage of seniors will spend their final days receiving this type of care. Since nursing homes are very expensive, Medicaid can preserve inheritances that have you always wanted to leave to your loved ones. Instead of giving your legacy to a nursing home, you can pass your assets along to your family members if you work with our firm to take the right steps in advance.
People With Disabilities
This is one aspect of our work as Medicaid attorneys, but there is another one. Since we do understand the Medicaid program thoroughly, we are well positioned to assist if you would like to provide for a person with special needs when you are devising your estate plan. Clearly, many people with disabilities cannot work, and some of them are children. Medicaid is a source of health care insurance for people with very limited financial resources, so many individuals with special needs are enrolled in the Medicaid program.
Since Medicaid is intended for folks that have a significant level of financial need, there is an asset limit. It stands at just $2000, but there are some things that are not considered to be countable, including a home and a vehicle that is used as a primary source of transportation. However, an infusion of countable assets could lead to a forfeiture of eligibility for Medicaid coverage.
There is another government program that many people with special needs rely on called Supplemental Security Income. It does not take a government benefit expert to surmise that SSI is a source of income for people that cannot earn money on their own because of their physical or mental limitations. Once again, this benefit can be lost if a recipient must come into a windfall of some kind.
Supplemental Needs Trusts
A solution to this type of situation from an estate planning perspective would be the creation of a supplemental needs trust. These legal devices are sometimes called special needs trusts. If you establish and fund a special needs trust for the benefit of a loved one, the beneficiary would not be allowed to directly receive cash distributions or prepaid gift cards. However, the trustee could utilize assets in the trust to satisfy the supplemental needs of the beneficiary.
The payments must be made to a third-party that provides a product or service. There are countless different types of expenditures that would be allowable under the Medicaid guidelines. These would include medical and psychiatric treatments that are not covered by Medicaid, along with dental work that the program will not cover. Educational expenses, courses that are not offered in a formal setting like music lessons, vacations, transportation costs, computers, and other goods and services can paid for by the trustee using assets that have been conveyed into the trust.
If a person with special needs was to come into money via a personal injury settlement or an inheritance that was left by someone that was not aware of the potential consequences, there would be recourse. A parent, a grandparent, a guardian, or a court could establish a first party special needs trusts for the benefit of the individual in question. When someone else establishes a supplemental needs trust with his or her funds for the benefit of another person, it would be a third-party special needs trust.
With a third-party special needs trust, the Medicaid program would not be able to seek reimbursement from assets that remain in the trust after the death of the beneficiary. However, if the trust is established with assets that were in the direct possession of the beneficiary, this would be a self-settled or first party special needs trust. Under these circumstances, Medicaid could seek to attach assets that remain in the trust after the beneficiary’s passing.
Attend a Free Seminar!
We invite you to join our Medicaid attorneys at one of our upcoming seminars. They are offered on a complimentary basis, but we do ask that you make a reservation in advance. To check out the schedule and obtain registration information, click this link: Mount Clemens, MI Estate Planning Seminars.