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©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.
Can Medicaid require assets be spent down before a person becomes eligible?
A: The Medicaid rules are designed to make individuals spend down the following assets to certain limits before they can qualify: cash, bonds, savings, stocks, life insurance cash values and real property. With proper planning and competent advice, all of these assets can be preserved.
Q: We’ve been privately paying for nursing home care for my mother for the last two years. Are there still planning strategies available to preserve assets and qualify sooner for Medicaid?
A: Yes. The fact that you’ve been privately paying does not preclude you from taking advantage of asset preservation strategies.
Q: My mother gave us $10,000 last year. Does this make her ineligible for Medicaid?
A: It can make her ineligible. All gifts in the last five-year period are considered, and the amount of the gift determines the number of months of ineligibility. However, we can suggest ways to alleviate such penalty periods. Please note that some of the strategies used to eliminate penalty periods require an attorney to be involved to draft the necessary legal documents to eliminate the penalty period. Only members of the Florida Bar are permitted to draft these legal instruments. We are constantly referring our clients to attorneys for the purpose of assisting our clients with solutions to overcome penalty periods.
Q: If Medicaid has a five-year look back, how can you preserve assets?
A: Despite the fact penalties are incurred for recent gifts, sometimes it’s still possible to transfer the applicant’s assets while avoiding a penalty period. Some strategies permit assets to be transferred without being considered gifts, thus no penalty period is assessed by Medicaid for these asset transfers.
Q: What is an annuity and can it be used to preserve assets?
A: An annuity is an insurance product which has been used for over 10 years to preserve assets prior to applying for Medicaid. Thus, life insurance agents have been integrally involved in Medicaid Planning for well over 20 years. Some life agents have chosen to specialize in this arena. MIR is one such agency which focuses solely on Medicaid Planning. The Deficit Reduction Act of 2005 placed some limitations on the use of annuities. However, annuities are still in use today for Medicaid Cases here in Florida. Typically, excess assets above allowable limits are placed into the annuity and then it gets annuitized thereby creating an income stream for a fixed period of time. Once annuitized, the asset is gone and the individual receives a guaranteed income stream each month for a set number of years. Thus, the annuity is a way to “make the asset go away” without losing the financial benefit of the asset.
Q: Who should structure the annuity to make sure that it is done correctly?
A: Only licensed life insurance agents are permitted to sell annuities here in Florida. But not all life insurance agents are created equally. It’s usually best to find an agent that spends all or the majority of his time preserving his client’s assets prior to assisting them with the Medicaid application. The best agents are those that can perform two services: 1) asset preservation assistance using financial products and 2) application filing assistance. Medicaid Information Resource provides both of these services to our clients. Sometimes clients use life insurance agents or financial planners who have little or no experience with applying for Medicaid. Oftentimes this inexperience results in mistakes and denied applications. These mistakes can prove costly. Make sure anyone you use has considerable experience in this arena.
Q: Since the Medicaid annuity generates income, doesn’t this income get paid to the nursing home?
A: If the applicant owns the annuity, then yes, this income gets paid to the nursing home along with their other income as what’s called “Patient Responsibility”. However, when there is a spouse still residing in the community, the annuity can be structured in their name and the community spouse gets to keep 100% of the annuity income.
Q: Why is this planning so important?
A: The money saved from years of hard work can be depleted quickly when a family member requires long term care. The loss of lifetime savings can have a devastating financial and emotional impact on the entire family. With sound advice and planning, it is possible to preserve all your life savings, your family home and investments and still qualify immediately for Medicaid.
Q: Are any MIR employees attorneys?
A: No, we are not attorneys. We are financial planners. We do not practice law. Thus, we do NOT perform any of the following activities: drafting of legal documents, review legal documents or interpret Medicaid regulations. In fact, we depend on relationships we have with attorneys who we refer our clients to, to perform these matters on behalf of our clients. We are financial professionals with expertise in preserving assets and assisting our clients in submitting their Medicaid applications on their behalf.