Henry (named change to protect client confidentiality) contacted me about a year after his wife was first diagnosed with Alzheimer’s disease. In the year leading up to our first meeting he had provided her full-time care and watched as her condition progressed. Not only was Henry dealing with the physical and financial challenges of caring for his wife, but he was also processing the emotions that come with this situation and life transition. To say Henry was overwhelmed is an understatement.
Understandably, one of his biggest concerns was protecting and preserving his life savings. As his wife’s condition progressed it became apparent she would require full-time professional care, and Henry had started visiting skilled nursing homes with memory care units. It is not uncommon for monthly costs for a room in a memory care unit to cost $8,000 – $9,000 per month. Henry was worried he would have to spend all of his retirement money on her care, as well as his limited monthly social security and pension income – leaving him destitute in the years he had planned on enjoying comfortably. Henry was in need of a medical assistance plan.
Medical assistance (MA) covers a wide range of medical services for those who qualify based on income. MA long-term care pays for the skilled nursing home care of an MA patient. However, to qualify applicants can only have a limited number of assets. If the MA recipient is married, their spouse is permitted to keep a significant amount of assets and they may even be able to receive some of their spouse’s income, such as pension benefits or social security payments. With planning in place, spouses to not have to become impoverished by their spouse’s long-term care costs.
To become financially eligible for MA for long-term care, the applicant must have “Asset Eligibility.” Oftentimes individuals or couples need to reduce their assets in order to qualify. There are ways to reduce assets to achieve asset eligibility, but it must comply with MA guidelines or such asset reductions count again the MA applicant and result in a penalty period when they apply. Importantly, there is a 5 year look back period for “uncompensated transfers.” For example, if Henry gifted $200,000 to his children, and applied for MA for his wife 2 years later, his wife would receive a penalty period during which she would not be eligible for MA. It is important to make certain that any asset reduction is in line with MA guidelines.
Medical assistance planning starts with first identifying all assets and sources of income, and assessing what needs to be reduced in order to become eligible for MA. A strategic plan is set forth as to how to reduce assets in a MA compliant manner. It also addresses the needs of married couples with an eye toward keeping as many of the family assets in the family as possible.
Schromen Law, LLC provides compassionate representation for medical assistance planning. This helps individuals and couples to have a plan regarding their long-term care needs, and a map for what to expect as time progresses. Henry was able to implement a plan for reducing assets in a manner that protects his financial security while his wife becomes eligible for medical assistance to help pay the costs of her long-term care.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Schromen Law, LLC and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.