September 2013
1.
Provide as broad
Power of Attorney authority as appropriate to permit transfer of assets
between spouses and investment in Medicaid-exempt assets, such as income-producing
real estate or Medicaid Compliant Annuities.
2.
Assure you have
an appropriate legal backup for the caregiver spouse. Multiple challenges and high stresses face
the caregiver. Many nursing home
placements occur when a health crisis overtakes the caregiver. Who is prepared to respond in that
circumstance?
3.
The caregiver
spouse can, and generally should, have a testamentary special needs
trust to provide for a surviving disabled spouse. Moving assets to name of caregiver spouse can
facilitate Medicaid qualification planning and provide special needs protection
for the disabled spouse if the caregiver spouse dies first. In some cases, wills with trusts for each
spouse and appropriate division of assets provides best protection for
uncertain order of death.
4.
Timing and
strategic use of non-exempt assets is critical to maximizing protection of
assets and income under Medicaid Spousal Impoverishment protections. Early evaluation of assets, effect on
Medicaid qualification permits the planner to identify of probable course action
for Medicaid qualification even though execution of the plan will often be
delayed until the point of need.
5.
Begin early to plan
for non-exempt assets that are difficult or expensive to liquidate. Examples:
tax-deferred retirement accounts, annuities and other assets with early
withdrawal penalties, non-income-producing real estate.
6.
A Retirement
Community or Assisted Living for the Community Spouse may prevent her/him from also becoming an
institutionalized spouse. Planning with
the Spousal Impoverishment protections in Medicaid law can help make this
possible through the “excess shelter allowance,” and maximizing the
assets protected for the Community Spouse.
7.
Since assets must
generally be moved to name of non-recipient spouse after Medicaid is
established, second marriages, his, her and/or our children situations, and
differing legacy plans present special challenges for legacy planning in
relation to Medicaid-wise planning.
Consider family agreement or other devices that will permit fidelity
to each spouse’s legacy plan despite Medicaid requirements.
8.
Caution
clients against simplistic solutions. Doing what the neighbor did, transferring the house to
the children or buying what the “single-solution” annuity salesperson offers
can be disastrous.
9.
Assure that
clients understand that gifts by the well spouse can disqualify the disabled
spouse for up to five years.
10. Protect the well spouse with long term care insurance or a Medicaid
contingency plan.
