Let's take a look, how to use Medicaid annuities. Suppose you are single and in the nursing home, and you have more than 100,000 U.S. dollars of "excess" assets. What can you do to qualify for Medicaid coverage in nursing home expenses?
You can safely give away everything, but mean that you would reserve for Medicaid for many months --- the so-called "punishment period".
For example, if you gave away $ 100,000, the calculation of the penalty periodYou need to be fixed annually by the amount of your gift of your state sanction dividers divide ", which is based on the average cost of a nursing home in your country and in the rule. So if your gift is $ 100,000, and the divisor $ 5,000, then there is a penalty period of $ 100,000 / $ 5,000 = 20 months.
If you really like the full $ 100,000 in order to gave away, say, your children, you would without Medicaid coverage in nursing home costs which for 20 months, based on our prior assumptions. Well, who iswould you pay for this 20-month period? That's right, the children! And it may take the entire $ 100,000, you just gave them your spending for the period covering the penalty, so that the children with nothing at the end! So much for that approach.
Instead, the "half-a-bread view" approach. Here's how it works: Instead of 100%, and wound up with nothing for your family members as described above you, they now give 50% and the remaining 50%. But ifYou quit, you will not qualify for Medicaid, because you can remember having a lot of money, 'you only $ 2,000 in countable assets, not $ 50,000!
So you would have to spend $ 50,000 on your care until it's gone, and then you can apply for Medicaid. But at this point would suggest that the gift you have 10 months counts against you (like all the gifts that made you) in the last 5 years, as a rule, you force your children to you again until the U.S. $ 50,000, you pay, thereshe's gone. Hmmm, no better than the first approach ...
But this is yet another twist in this that must be followed for it to work. Because the penalty period begins to run only when you are otherwise eligible for Medicaid, but for the gift to be imposed, you must U.S. $ 50,000 required to "make disappear", somehow. No hiding it and lying to the Medicaid worker is not what I had in mind. This will only do you get a huge fine and some time in jail, the food in theNursing home starts to look good for you in comparison!
The trick is to take that, you and 50,000 U.S. dollars required purchase of a Medicaid annuity, as described in Part 1. Then you should immediately apply for Medicaid. You will not be sent because of the gift that is done you only, but now that you broke, the penalty begins to run. This means that it is somehow their own nursing cover for the next 10 months. That's where the rent into the game: one we hope will pay for the purchasedYou enough each month to cover your monthly expenses only for the punishment. Ideally, the pension should be stopped at the exact moment that your Medicaid eligibility begins. Result: Your children will have an additional 50,000 U.S. dollars if they had not had, you had done nothing. (And you were released from prison!)
Well, folks, that sounds easy, but I warn you: Do not try this on your own, without competent legal advice! There are a number of details that I omitted, becauseSimplification, and the rules of individual states vary on exactly how this can be implemented. Nevertheless, it can be a powerful technique to save your family thousands of dollars, under the right circumstances.
© 2007 by K. Gabriel Heiser
Attorney K. Gabriel Heiser has devoted his legal practice, Medicaid planning, elder law and estate planning for the last 23 years.
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