Elder law is a combination of several areas of practice that involves estate planning, and long-term care or placement planning. It is referred to as “elder law” because it focuses on a client who is elderly or disabled. Elder law can involve the drafting of trusts, wills, or powers of attorney for the client. It might also involve planning for placement in a nursing home and preserving a client’s assets so that they can enter a nursing home with the use of Medicaid. Elder law often involves non-legal tasks, such as assisting a client in finding an assisted living facility or locating agencies that can help them obtain the necessary services and resources.
If an individual has a disability or sickness that has rendered them unable to function normally or handle their financial affairs, then they might need an elder law attorney. In many cases, an individual’s family members will seek an elder law attorney for the family member who is in need.
If a person needs long-term care, there will be three options available to them: pay for the care out of pocket, utilize long-term care insurance, or obtain Medicaid. Determining which option is best for a particular client is a big part of the practice of elder law.
Medicare covers the first 100 days of long-term care. If a client needs care for more than 100 days, then they will have to seek federal benefits through the Medicaid program. An individual’s primary residence does not count as an asset for purposes of qualifying for Medicaid as long as they lived at the primary residence for at least two years before entering a nursing home. Vacation or rental homes are countable assets that would disqualify someone from receiving Medicaid.
An individual will be able to keep some of their income if they apply for Medicaid. Medicaid is a means-tested federal program, which means that a person will not qualify for it if they have too much income or too many assets. The income test to qualify for Medicaid is easy; if a person can’t afford to pay for the monthly cost of nursing home care because they don’t have enough income per month, then they will qualify on an income basis. However, determining the amount of income that a person has will depend on several factors, the primary one being whether or not they have a community spouse. In other words, if one spouse is entering a nursing home and the other is not, then the spouse who is staying at the primary residence will be able to keep a certain amount of income in order to continue living outside of a nursing home. If an individual does not have a community spouse, then most of the income—with the exception of a small personal needs allowance—will go towards nursing home costs and Medicaid will pick up the balance, if the person qualifies.
As a general rule, an irrevocable living trust does not protect assets from Medicaid spend down. Assets in a trust account are just like assets that are owned in an individual’s name. When it comes to qualifying for Medicaid, there is one exception, known as the “Medicaid qualifying” or “Section D 4 a” trust. This refers to a special type of trust drafted based upon a particular section of the Social Security Act, wherein none of the assets would count for purposes of qualifying for Medicaid.
An individual can be on Medicare and Medicaid at the same time.
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