We recently wrote about the importance of including nursing home planning within estate planning. For many people, this will include Medicaid planning.
It is important to realize that Medicaid, because it is administered by states, can have a unique approach depending on where you live. In New Jersey, residents who are also U.S. citizens or permanent residents and who are at least 65 years old may qualify for Medicaid benefits in an assisted living facility provided the applicant does not have more than $2,000 in countable assets and a monthly income at or below $2,094.
Assets that aren’t countable include a home valued at less than $786,000 in which the spouse resides, a primary vehicle, burial plots, certain annuities and irrevocable burial trusts. As much as $113,640 in countable assets belonging to either or both spouses can be allocated to the non-applicant spouse, though this amount may change from year to year.
In applying for Medicaid, one must provide proof of age, residency, marital status, and financial information regarding resources and income. One must show copies of all sources of income and assets for both oneself and one’s spouse. This includes bank, retirement, and brokerage accounts, as well as trusts, whole life insurance and CDs.
It is important to be aware of the five year look back period. Those who transferred significant assets in the last five years will to provide additional information to avoid a period of ineligibility based on the transfer.
While one does not have to have an attorney to navigate this process, but going without professional guidance may result in missed planning opportunities. An attorney who is familiar with the program and the best way to structure assets to fit within one’s estate plan is a great resource.
Source: nj.com, “Biz Brain: Consult a lawyer for Medicaid application advice,” Karin Price Mueller, October 21, 2012