Explain hiding assets from medicaid

[Anonymous]

My dad keeps saying that we need to put assets in a trust so that when it is time, he is able to qualify for medicaid. What I can't figure out is why someone would want to. If you can afford not to have to go into a medicaid facility and you've saved for a better place, why would you not want to do that? I'm obviously missing a connection somewhere and I can't get him to explain it to me in a way I understand.

[Anonymous]

Anonymous wrote:My dad keeps saying that we need to put assets in a trust so that when it is time, he is able to qualify for medicaid. What I can't figure out is why someone would want to. If you can afford not to have to go into a medicaid facility and you've saved for a better place, why would you not want to do that? I'm obviously missing a connection somewhere and I can't get him to explain it to me in a way I understand.

He’s correct that he needs to structure assets in order to avail himself of Medicaid (and there’s a look back period). I wonder if he understands that Medicaid beds are limited and you can’t use Medicaid for the facility of your choice?

[Anonymous]

OP - Your dad has every right to speak with an experienced lawyer who could help him decide on a future plan in terms of legal and financial considerations. It may be best to get a referral to an eldercare lawyer who could give him options should a major health event occur before the 5-year period ends, but still have assets protected as best as one can. The truth is that unless one is very wealthy that healthcare costs are only going to keep rising, and you can't just say when the end game will occur. There is a strict 60-month of five year look back on any transfer of assets. As the first response indicated, Medicaid beds are limited in most nursing home facilities - and, in fact, may even be so within a community. Even in a CCRC where one might be told there are so many Medicaid beds, one who lives there can only be given preference to slide into one when needed - if there is an opening.

[Anonymous]

Is your mother (or stepmother) still living? If so, it makes sense to figure our how preserve some assets for her care. Otherwise, I don't think it makes sense.

[Anonymous]

Maybe he doesn't want to bankrupt your future inheritance to pay for end of life care?

[Anonymous]

This is tricky and really depends on the amount of assets your father has. If you have enough to get into a nice place, some will convert you to Medicaid if you run out of money.

But also, he may not realize how bed the straight up Medicaid places are.

[Anonymous]

Anonymous wrote:Is your mother (or stepmother) still living? If so, it makes sense to figure our how preserve some assets for her care. Otherwise, I don't think it makes sense.

No she has already passed

[Anonymous]

Anonymous wrote:This is tricky and really depends on the amount of assets your father has. If you have enough to get into a nice place, some will convert you to Medicaid if you run out of money.

But also, he may not realize how bed the straight up Medicaid places are.

If you’re in a nice place and run out of money, would you have to transfer to a different facility?

[Anonymous]

Anonymous wrote:Maybe he doesn't want to bankrupt your future inheritance to pay for end of life care?

It’s his money. It should be used for his care.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Maybe he doesn't want to bankrupt your future inheritance to pay for end of life care?

It’s his money. It should be used for his care.

Correction. It's his money to do with as he wishes.

[Anonymous]

Anonymous wrote:Is your mother (or stepmother) still living? If so, it makes sense to figure our how preserve some assets for her care. Otherwise, I don't think it makes sense.

This is one of the main reasons people do this. If one spouse lingers for years on end-of-life care, the couple’s assets can be fully drained and it could leave nothing for the remaining spouse. In that scenario it makes sense to protect assets to ensure there are funds for the other partner.

There is a five-year lookback, so assets need to be set aside for that long before Medicaid kicks in. Asset limits are very low for Medicaid. It may make sense to protect some assets, so there are some funds available for spending if he ends up needing a Medicaid facility.

[Anonymous]

What your Dad is trying to do is protect assets from the state. If he puts the house in an irrevocable trust in the names of his kids (at least 5 years before needing care), the state can’t force him to sell the house to qualify for Medicaid. What usually happens is one person needs long term care (nursing home) but can’t afford to pay $10,000+ a month for care. To qualify for Medicaid coverage, you have to spend down your assets so you are considered “poor.” The state has a “look back” period into your finances. It used to be 3 years but is now 5 years to see if you are hiding assets that could go towards a family member’s care. If the house is transferred before the 5 year period, the state can’t touch it and your dad can keep that asset in the family.

[Anonymous]

He has to make an appointment with a lawyer specializing in eldercare finances. Because of the look back period, it has to be done sooner rather than later.

And then, if it turns out he doesn't want to, or cannot, be in a Medicaid facility, the money will still be there to pay for alternative care.

So I'm not sure why you're balking, OP. Usually the elderly are a lot less accommodating and refuse to let go of their assets.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is tricky and really depends on the amount of assets your father has. If you have enough to get into a nice place, some will convert you to Medicaid if you run out of money.

But also, he may not realize how bed the straight up Medicaid places are.

If you’re in a nice place and run out of money, would you have to transfer to a different facility?

Yes, unless they have a medicaid bed available.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is tricky and really depends on the amount of assets your father has. If you have enough to get into a nice place, some will convert you to Medicaid if you run out of money.

But also, he may not realize how bed the straight up Medicaid places are.

If you’re in a nice place and run out of money, would you have to transfer to a different facility?

Yes, unless they have a medicaid bed available.

Some of the nice places have a couple of Medicaid beds and if they have one open when you need to be on Medicaid, they will put you in one. But it's not a bottomless pit. It's built into their financial model to have this set up.