Qualifying For Medicaid: Reducing Available Assets

If you or your spouse finds yourself in sudden need of an extended stay at a nursing home, you may be faced with significant costs that can quickly deplete your savings. Qualifying for Medicaid is the best way to ensure that you can protect your assets, but the rules for Medicaid eligibility can be tricky to navigate. Reducing your available assets so that they fall under the qualification limit for Medicaid is essential to maintaining your eligibility.

Reducing Available Assets

As explained in our blog entry on assets and Medicaid qualification, in order to be eligible for assistance in the state of Missouri, an applicant must have no more than $5,000 worth of available assets and their spouse must have no more than $137,400 in countable assets. If you or your spouse are over this limit, then your Medicaid planning will focus on converting your available assets to either excluded assets or to income. Which approach you take will depend on the specifics of your situation. Your Medicaid planning attorney will be able to help you decide what the best course of action is to take.

Immediate Annuities

For couples where one spouse is in a nursing home and the other still lives in the community, immediate annuities can be a very helpful option when it comes to qualifying for Medicaid. In an immediate annuity, you give a certain sum of money to an insurance company and they then pay it back as a monthly income for the remainder of the individual’s life. The best way to deploy this strategy is for the spouse of the person in the nursing home to set up an annuity that pushes their available assets below the $137,400 limit. In other words, if the spouse’s countable assets are over the limit, they will transfer the difference between their assets and the limit to the annuity and receive it back as a monthly payment, while not incurring a penalty when it comes to Medicaid eligibility.

For a new annuity to qualify as a tool for Medicaid eligibility, it must meet certain conditions. For example, it must be irrevocable, non-assignable, and non-transferable. This means that the owner cannot remove the funds except via monthly payments, and that it cannot be transferred to anyone else. It must also be actuarially sound and term certain, and must name the state as a remainder beneficiary.

The Importance of an Experienced Attorney

Qualifying for Nursing Home Medicaid can be tricky, but it’s the best way to ensure that you can retain your hard-earned assets. If you or your spouse’s available assets are above the legal limit, it is essential that you reduce them in a responsible manner. Working with an experienced elder law and Medicaid planning attorney is the best way to ensure your financial well-being.

Contact The Law Firm of Christopher W. Dumm

At The Law Firm of Christopher W. Dumm, we have many years of experience helping our clients successfully apply for Medicaid assistance. Contact today and start protecting your and your family’s assets. Call us at 417-623-2062 or fill out the form below.