Medicaid Planning Lawyer in Greenville, TX

Helping Clients Understand Medicaid Eligibility Requirements and How to Plan for Long-Term Care

If you’re considering your long-term care needs and how you’ll pay for these expenses, it’s time to start thinking about Medicaid planning. While many assume that their private savings or Medicare plans will be enough, these resources can be exhausted much faster than you think. Medicaid planning allows you to prepare for the future and ensure your assets are protected.

If you may need long-term care, talk with an attorney as soon as possible about the legal process of Medicaid planning. Some strategies, such as transferring assets, are time-sensitive, and it’s essential to have experienced legal guidance to navigate this process. Call The Council Firm, PLLC, at 903-494-3380 to schedule an appointment to speak with a knowledgeable member of our team.

Why Is Medicaid Planning Important?

Medicaid is often an integral part of affording long-term care, but the strict eligibility limits for income and assets can make it seem out of reach. Medicaid planning is a way to protect as much of your assets as possible while still preserving your eligibility. This is a complex process, and attorneys who work with clients in this area are highly knowledgeable about how Medicaid works in Texas, including eligibility hurdles and how to overcome them.

Research shows that around 70 percent of people who live to be 65 will need some long-term care, and these expenses can add up quickly, eating into your lifetime savings and leaving much less for future generations after you pass. Everyone can benefit from Medicaid planning, even if you are still in good health or think you have enough assets to afford care on your own. You can never know what the future may bring, and being proactive and planning puts you in a far better position than trying to react when a situation is already occurring.

Proper planning involves working with an attorney who can conduct a full financial review and develop a customized plan that aligns with Texas Medicaid laws. An attorney can also ensure that any Medicaid planning strategies fit with your larger estate plan and your goals for the legacy you’ll leave behind.

What Are the Income and Asset Limits for Medicaid Eligibility in Texas?

The Medicaid program limits the assets and income a person can have and still qualify for benefits. The limits depend on the type of Medicaid services you’re using, but for nursing home care or a Medicaid waiver for home and community-based services, the income limit for a single person is $2,901 per month. The asset limit is $2,000. If you’re married and both you and your spouse are applying, the income limit rises to $5,802, and the asset limit increases to $3,000. If only one spouse applies, the single person limits apply, but there is an additional asset limit for the non-applicant spouse of $157,920, which can help preserve some assets.

However, these limits can still be confusing if you’re unsure what countable vs. non-countable income is. Almost all income will be considered countable, but there are some exceptions for certain VA benefits, such as the Veterans’ Aid & Attendance and Housebound Allowances.

These limits are adjusted regularly to account for changes in the cost of living and inflation, so verifying the current limits and which apply to your situation with an attorney is essential. If you’re over the limits, an attorney can recommend tools such as trusts or other spend-down strategies to help you qualify.

What Is the Lookback Period?

There is a five-year lookback period when determining whether you qualify for Medicaid in Texas. This means that the Texas Health and Human Services Commission (HHSC) will review your financials over the last five years to determine if you made any asset transfers that could impact your eligibility. For example, if you transferred a large amount of cash assets to your adult child one year before applying for Medicaid, those assets could potentially still count against you for eligibility purposes. There are some accepted exceptions, but these require specific circumstances, and it’s easy to get confused about what may or may not count.

An attorney can help you determine how to structure your assets and when transfers need to be made to ensure that they don’t affect your eligibility. In some cases, there may be penalty periods, which can mean you have to wait to get coverage under Medicaid. However, the earlier in the process you meet with an attorney, the better. In general, it’s best to start thinking about Medicaid planning in your 50s at the latest, even if you’re not yet to the point of needing care. This ensures you have plenty of time to identify your goals, determine a strategy, and enact that strategy without having to worry about being in the lookback period.

How Can You Protect Your Assets in Medicaid Planning?

Medicaid planning is unique to the individual and their financial situation and goals, and there are various strategies and tools that can be used as part of comprehensive estate planning. One of the most commonly used is an irrevocable trust called a Medicaid Asset Protection Trust, which is specifically designed for this purpose.

Because the trust is irrevocable, the ownership of the assets is transferred out of the grantor’s estate as soon as the trust is funded. This means that those assets are not considered when determining eligibility for Medicaid. However, the trust must be created and funded prior to the five-year lookback period.

Depending on what assets are used to fund the trust, this can be extremely financially beneficial for the applicant. For example, if the primary residence is placed in the trust, the person can continue to live there. If investment assets are used to fund the trust, the person is allowed to continue to receive income, such as dividends, from those investments — they just cannot be sold. There are some exceptions to what assets can be used to fund a Medicaid Asset Protection Trust, so it’s always important to discuss this option with an attorney to ensure you understand how it could work in your situation.

Other potential strategies to protect assets include spending down excess assets to pay for home modifications or to prepay for a funeral. You may also be able to transfer excess assets to family members or charities.

Medicaid planning is a long game, and starting early is the best way to protect your assets and ensure that your legacy is preserved for the next generation. Contact the law office of The Council Firm, PLLC, at 903-494-3380 to get the process started and speak to an elder law attorney.