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Beware of Medicaid Pre-Planning Schemes

Mon, Feb 15, 2016 at 3:50PM

Medicaid is government assistance for long-term care. To qualify for Medicaid, one must meet certain requirements as to level of care required, income and assets. We normally do not suggest that our clients transfer assets, other than to the spouse, in advance, with the hope that the transferor will later qualify for Medicaid.

In Florida, to qualify for Medicaid after transferring assets to people other than the spouse, one must make the transfer at least five years prior to qualification. Transfers made within five years are deemed effective only once the person otherwise qualifies for Medicaid, not when actually made. Thus, if three years prior to application, one transferred assets to third parties, while they did not qualify for Medicaid, the transfer was deemed not to have occurred. We sometimes apply for Medicaid once a person otherwise qualifies, in order to be denied, to start the clock running.

We frequently see advertisements and seminar invitations for Medicaid qualification products.Sometimes, these products involve annuities that supposedly can be converted to Medicaid qualification annuities once the person needs Medicaid. Although certain annuities can be used for Medicaid qualification in some situations, buying an annuity in advance may not accomplish the intended goal.Buying a qualified annuity at the time Medicaid is needed is not considered a transfer of assets, so there is no need to do so in advance.

After examining clients’ assets and circumstances, we assist clients in determining eligibility for Medicaid and, if necessary, advising as to legal means of altering assets, in order to qualify. It is inappropriate to suggest that any type of annuity, trust, or other technique will automatically assure qualification.

If you receive information on Medicaid-planning techniques from a non-attorney, or anybody, prior to needing nursing home care, be very wary before purchasing a product.

Beware of Medicaid Pre-Planning Schemes

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