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Medicaid Planning for Single Individuals

Medicaid planning for single individuals can be complex and requires careful considerations of various factors. The goal is typically to protect assets from being depleted by long-term care costs while ensuring eligibility for Medicaid benefits. Here are some key points and strategies commonly used:

1. Lookback Period: Pennsylvania, like most states, Pennsylvania has a Medicaid "lookback period" during which any gifts or transfers of assets are scrutinized for five (5) years prior to applying for Medicaid.  This does NOT mean that we cannot devise a plan to gift assets, it simply means we must understand the gifting rules and devise a plan to benefit the client, rather than harm the client.
2. Penalty Period:  If assets are gifted during the lookback period, Medicaid imposes a penalty period during which the individual is ineligible for benefits. The length of the penalty period is calculated based on the value of the gifted assets and the average monthly cost of nursing home care in the state.  We often use the penalty period to our advantage by devising a gifting to plan to purposely impose a penalty period.  This allows us to maximize the protection of assets and identifies a date certain in which the client will be eligible for Medicaid.
3. Exceptions:  Some gifts are exempt from penalties, such as gifts to a spouse, gifts of exempt assets (like a home), gifts to a disabled or minor child, or gifts made for reasons other than to qualify for Medicaid.
4. Asset Protection Trusts:  Placing assets into an irrevocable trust can protect them from being counted for Medicaid eligibility purposes, but there are rules and limitations to consider. The trust must be structured correctly and have a trustee who is not the beneficiary.
5. Spending Down Assets:  Spending excess assets on exempt items such as home modifications, medical expenses, hiring an attorney to assist with the Medicaid application process, or prepaying funeral expenses can reduce countable assets to meet Medicaid limits. 
6. Medicaid Compliant Annuity:  Converting excess assets into a Medicaid Compliant Annuity can provide a stream of income while reducing countable assets. The annuity must meet certain criteria to be considered exempt for Medicaid purposes.  Do NOT attempt to shelter assets using a Medicaid Compliant Annuity unless you are under the guidance of an experienced elder law attorney.
7. Real Estate Transfers:  Transferring a home to a sibling or adult child who has lived in the home for at least two years can be an exempt transfer under Medicaid rules.

It's crucial to consult with an attorney who specializes in elder law and Medicaid planning in Pennsylvania to navigate these strategies effectively and ensure compliance with state and federal laws. Everyone’s situation is unique, and the right approach will depend on various factors, including the value of assets, the level of care needed, and the individual's long-term goals.

How We Can Help

There are numerous opportunities, under the professional guidance and experience of the elder law attorneys at Zacharia Brown, to save money, protect a family home, and preserve life savings. Rather than depleting significant financial resources to pay for nursing home or in-home care costs, a far better choice is to retain Zacharia Brown as your legal advocate. They will guide you throughout the Medicaid eligibility and application process to ensure that you or a loved one will secure the long-term care that you need.