I Have Too Much–I Will Never Be Eligible For Medicaid!
By: Anthony J. Enea, Esq.
Many are of the belief that because they have several million dollars’ worth of assets (including their home(s), savings accounts, and retirement monies) they will never qualify for either Medicaid Home Care and/or Nursing Home benefits. Depending on their individual circumstances, they may be right, however, it is far from certain that they are.
For example, most seniors do not realize that in New York State, the face value of their retirement assets (IRAs, 401Ks, 403Bs, etc.) do not affect their eligibility for Medicaid, and that only the required minimum distribution (RMDs) will be counted as income once they are receiving Medicaid benefits. With respect to Medicaid Home Care, one’s income, including RMDs, can be used for their care and living expenses—even for home care that is not covered by Medicaid. This is accomplished by the Medicaid applicant enrolling in a charitable pooled-income community trust.
Additionally, one’s primary residence is considered their “homestead,” and as long as the applicant, the applicant’s spouse, and/or the applicant’s children reside within the home or have the right to reside there, the primary residence will not impact one’s eligibility for Medicaid Home Care and/or Nursing Home.
Furthermore, most seniors do not factor their ability to transfer assets from one spouse to the other (a spousal exempt transfer wherein no period of ineligibility is created) and elect to do spousal refusal as a means of obtaining Medicaid. Spousal refusal allows the spouse who is not seeking Medicaid to advise Medicaid that they refuse to use their income and savings (including the assets transferred from the “ill” spouse) to support their spouse. This is commonly used when one spouse needs Medicaid Nursing Home Care but failed to engage in any Medicaid planning before the need arose.
Even if one’s assets are worth several millions of dollars, engaging in Medicaid asset protection planning and sheltering a portion of one’s life savings from the cost of long-term care makes an abundance of sense. Reducing one’s overall exposure to the cost of long-term care by utilizing a Medicaid Asset Protection Trust (MAPT) is an effective and viable planning option that should be strongly considered. It is of especially significant value if one’s home and/or vacation home comprises a large part of one’s estate. While a primary residence does not affect one’s eligibility, it is still an asset against which Medicaid could have a claim or place a lien for the value of the services Medicaid provided.
Although one may be technically a millionaire, nothing prevents them from taking steps to protect part of their life savings from the cost of long-term care.
*Anthony J. Enea is the managing attorney of Enea, Scanlan and Sirignano, LLP of White Plains, and Somers New York. He focuses his practice on Wills, Trusts, Estates and Elder Law. Anthony is the Past Chair of the Elder Law and Special Needs Section of the New York State Bar Association (NYSBA) and is the past Chair of the 50+ Section of the NYSBA. He is a Past President and Founding member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA). Anthony is also a Past President of the Westchester County Bar Foundation and a Past President of the Westchester County Bar Association. He is fluent in Italian. He can be reached at (914) 948-1500 or at [email protected]
