Are you applying for Medicaid? An elder lawyer can help.
Maybe your situation is simple and you can handle the application yourself.
Maybe you think that the nursing home will help you. Nursing home staff are rarely trained in Medicaid. A nursing home has no interest in helping you preserve assets. A nursing home typically advises families to “spend down,” paying its higher private pay rate, until only $2,000 is left.
Some nursing homes have referral arrangements with co-called Medicaid planners. These go by various names. Some are local. Some operate in several states. Most have a side hustle in selling one financial product or another. All advertise that they can save a couple half the money.
Wouldn’t you rather save it all?
In Texas, you can save your home from Medicaid Estate Recovery and keep it out of probate by recording a Transfer on Death or Lady Bird Deed. Only a Lady Bird Deed carries a warranty of title. Only a Lady Bird Deed can be signed by an agent under a Durable Power of Attorney when the owner no longer has legal capacity to contract. Not only are Lady Bird Deeds drafted by lawyers, but an elder lawyer can also create a trust so that the home or other real property can pass to a group of people or to one person for life and then to another. This is important when it is not known for sure who will survive you or when there is a group of people but one person should be in charge.
Texas is a community property state. Medicaid, a national program, ignores this. It does have a spousal protection allowance which will allow the spouse who is not entering a nursing home to keep half of a couple’s assets, up to a certain amount. That amount, $126,400 in 2019, may not be enough for the spouse to pay property taxes for years to come. How long can your spouse really afford to stay in the family home?
Fortunately, because Texas is a community property state, the spouse entering the nursing home can transfer his or her assets to the other spouse, making them separate property. This is done in a Marital Property Agreement. Each spouse has their own attorney.
You may have a 401k. ERISA, the federal law governing 401ks and similar retirement accounts, requires that the retirement account pass to the surviving spouse unless that person has sent the plan administrator a letter foregoing their right or unless a court has issued a Qualified Domestic Relations Order (a “QDRO”) transferring the interest. While this typically happens during divorce, in Texas a lawyer can ask a court to issue this order without a divorce. This means that the retirement account may not only pass to the surviving spouse but also pass free of Medicaid Estate Recovery.
There are other ways an elder lawyer can help you with Medicaid planning and Medicaid applications. You can pay everything to the nursing home. You can hire a so-called Medicaid planner and save half your money for your spouse – up to $126,400 (2019), paying the rest to the nursing home. Or you can work with an elder lawyer to save it all.
It’s never too early to plan for your future. Schedule a Consultation. Call us at 800.295.3449.
Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.