Asset Requirement

©Copyright 2009 Medicaid Information Resource, 3440 East Lake Rd, Suite 108,
Palm Harbor, FL 34685

MIR offers financial planning services designed to help elderly clients preserve their assets in safe investments so they may qualify for government financial assistance programs. MIR charges fees to assist elderly clients in submitting Medicaid applications, and we may receive commissions for annuities structured in the planning process. In 11 years filing Medicaid applications, we have never had an application denied.

We are not attorneys and do not offer legal advice or draft any legal documents. The decision to hire MIR is in no way equivalent to or a substitution for an attorney.

asset requirement A single individual can usually have only $2,000 of countable assets to qualify for Medicaid benefits. However, if the individual’s monthly income is less than $848, he/she can keep $5,000 of assets. In 2012 the Community Spouse is permitted to have $113,640 of countable assets. Not all assets are counted, however. Examples of countable assets include: CD’s, savings accounts, checking accounts, bonds, stocks and money market accounts. Below is a list of assets that are “excluded assets” since they are not counted by Medicaid.

Major Asset Exclusions:
Homestead – If the spouse or certain dependent relatives continue to reside in the home, the home is an excluded asset. Also, if the applicant intends to return to the home, the home is excluded.

Vehicle – One vehicle of any age; a second vehicle can be excluded if it is over seven years old (unless it’s a luxury model, antique or custom vehicle).

Life Insurance – If the total face value of all life insurance policies is equal to or less than $2,500, then the cash values of the policies are excluded. If the total face value exceeds $2,500, the cash values are counted. Term or group policies with no cash value are also exclused.

Recently, a new life insurance product has become available as an asset preservation tool for Medicaid cases. Feel free to contact MIR for more details about using life insurance to preserve assets.

Burial Funds and Prepaid Funeral Contracts – The full value of an irrevocable burial contract is excluded regardless of the amount. In addition to this unlimited prepaid funeral contract exclusion, there is a $2,500 exclusion for funds that have been set aside for burial expenses. Oftentimes a new bank account can be opened for this purpose (e.g. John Doe Burial Account). In addition, one burial plot is allowed for each family member.

Personal/Household Goods – Personal items in the home such as home furnishings are excluded assets.

Retirement accounts (e.g. IRAs) – the principal balance in an IRA may be considered an exempt asset as long as the individual is taking regular income distributions from their IRA account.

Properly Structured Immediate Annuities – assets placed into properly structured immediate annuities can be excluded. Annuities are frequently used as tools to preserve assets for the family. Medicaid has several new annuity requirements that must be met in order for the annuities to be excluded. These new annuity rules stipulate that the State of Florida must be named as the primary beneficiary before any family members or heirs. If the annuity is structured improperly, the family can permanently tie up assets and then be declined for Medicaid. Therefore, it is imperative that a knowledgeable life insurance agent/financial planner be involved to structure the annuities properly.

Ongoing Business Concerns – are sometimes excluded as assets provided they generate income for the applicant. The business income gets contributed along with the individual’s other income towards the cost of their care. This contribution of income is referred to as “Patient Responsibility”. Similarly, the value of rental property can be excluded provided the property has ongoing rental income.