Medicaid Planning
When trying to pre-plan with tax-qualified funds, whether the planning is for Medicaid or VA benefits, we all know that the primary goals are to get rid of excess assets, while minimizing tax liabilities. A balance must be created between program eligibility and tax consequences, a task with which very little text and guidance is provided in order to accomplish. In a handful of states, retirement funds owned by an ineligible spouse or even an institutionalized individual are simply ...
Several of the most popular inquiries I typically receive in the Ask Dale section of this web site revolves around the community spouse Medicaid Compliant Annuity planning process. When is the right time to make the investment? How much should the community spouse invest? What benefit period should the community spouse opt for?
In that community spouse are typically not required to adhere to as strict income and resource requirements as their institutionalized counterparts, ...
In my practice of advising elder law attorneys regarding their clients' Medicaid and VA needs, if a case involves a trust and the need to accumulate income - no annual distributions, I typically recommend using a non-qualified fixed annuity as the investment vehicle.
The primary reasons why I make such a recommendation are that a fixed annuity offers safety of principal, a guaranteed return over a guaranteed period, and income tax deferral. Unlike a variable annuity which is s ...
I recently reviewed a Missouri Circuit Court of Appeals decision involving four community spouse and their purchases of post-Deficit Reduction Act of 2005 Medicaid Compliant Annuities as a means of spending down for Missouri's Medicaid program, MO HealthNet. The decision in the matter of J.P. et al v. Missouri State Family Support Division is dated April 20th, 2010.
The Missouri case revolved around Missouri legislature that was adopted in July 2007. Prior to the 2007 amendme ...
In Florida, Personal Services Contracts ("PSK"), which are also referred to as Caregiver Agreements, are widely used as a spend-down tool for Medicaid and/or VA benefits planning.
The PSK generally serves four purposes:
It reduces an applicant's countable resources to an acceptable level, which entitles the applicant to receive benefits;
It outlines the duties and obligations of the parties;
It establishes the compensation that will be paid to the caregiver; and
It dicta ...
I recently reviewed the letter submitted to the Center for Medicaid and State Operations ("CMS") by the National Association of State Medicaid Directors ("NASMD") that was dated March 10th, 2010. If you have not yet seen the letter, you may review it here.
The NASMD letter requested that CMS take the position that a Medicaid Compliant Annuity ("MCA") purchased by a community spouse "should be treated as a trust-like device, and that the entire amount used to purchase the MCA should be c ...
As we all know, Medicaid is the payor of last resort. Therefore, before Medicaid will provide any benefits on behalf of an individual, he or she must exhaust all outside funding sources, including monthly income from the Veteran's Administration ("VA"). With that in mind, how does a veteran qualify for both Medicaid and VA benefits?
In the recent case of In The Matter of Leon Schneider (N.Y. App. Div., 2 Dept., 2010 NY Slip Op 00971, Feb. 9, 2010), a New York appeals court ruled that the estate of Mr. Schneider must repay the state for the amount of Medicaid benefits provided on behalf of his wife, but only up to the amount of countable resources that he possessed above his community spouse resource allowance ("CSRA"), and by the amount that his monthly income exceeded his monthly maintenance needs allowance ("MMNA"). ...
In January of 2009, I worked with a Wisconsin elder law attorney who had a Medicaid case involving a husband and wife. In order to eliminate the spend-down amount, Ithe community spouse purchased a Medicaid Compliant Annuity from Employees Life Company (Mutual).
With the spend-down amount eliminated, a Medicaid application was submitted. The application was supplemented with three refusal letters, from companies that stated that they could not purchase the Medicaid Comp ...
With Krause Financial Services able to provide commercial Medicaid Compliant Annuities as short as 2 months, you may be asking yourself "How would my client EVER use such a tool?!" Such a short-term Medicaid Compliant Annuity is most often used in conjunction with a Gifting Plan, more commonly referred to as the Half-a-Loaf approach.
The goal of a Half-a-Loaf Plan is to allow the nursing home resident to give away approximately one-half of his or her spend-down amount, while retaining t ...
