If qualifying for Medicaid and asset preservation are a concern, we can help the client prepare. Medicaid, unlike some other government programs, is not an entitlement program; if you receive benefits, the State of Texas wants to be reimbursed upon your passing. There are also income and asset requirements to qualify.
The income threshold to qualify for Medicaid is very low and, oftentimes, people make too much money to qualify but cannot afford to pay for the care they need with the income they have. A solution to this is the use of a Qualified Income Trust, or frequently called a Miller Trust. Income is directed to the Qualified Income Trust where a small allowance can be paid to the person and their spouse but the remainder goes to pay for their care and reduces their income to a threshold that qualifies for Medicaid.
The asset threshold to qualify for Medicaid is also very low. People are required to spend down their assets to qualify for benefits. One solution that helps some people is a Medicaid qualified annuity. This is a method of turning cash or other liquid assets into non-countable resource but provides an income stream.
The State of Texas has a Medicaid Estate Recovery Program (“MERP”) which attempts to get reimbursement after a person passes for Medicaid dollars spent on that person’s care during their lifetime. Medicaid will file a claim into the decedent’s estate for payment and typically the only asset remaining is the homestead. However, equity in a homestead can be protected. Sometimes people think they will just give away assets when they foresee a need for Medicaid in the future. The State of Texas anticipates people will try to do this so they have a five-year look back period. If assets are liquidated during the five years prior to the Medicaid application, there is a penalty period. The five-years look at gifts of interest in property during the look back period. A Transfer on Death Deed is a conveyance that takes place after someone dies and passes property outside of probate, thus protecting the homestead property and the equity in it for beneficiaries.
If someone is concerned about Medicaid qualification or protection of assets, we include that in the planning we do with them.
For more information on Medicaid Planning In The State Of Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (830) 625-9300 today.