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In the last issue of the SOUTHERN BUSINESS JOURNAL, this column discussed the financial and quality of life ramifications of planning for eventual death, with a will or a trust, but failing to plan for the alternative.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

What If You Live? (Part 2)

 

            In the last issue of the Southern Business Journal, this column discussed the financial and quality of life ramifications of planning for eventual death, with a will or a trust, but failing to plan for the alternative.

 

            As one ages, the risk of sustaining a debilitating accidental medical condition rises significantly.  Indeed, on any given day, the risk is greater that a person will need long-term-care than of dying.

 

            Because the cost of long term care is so expensive, many who require care in a nursing home eventually will need to apply for financial assistance through the Medicaid program.

 

            A year-old change to the Medicaid law has significantly increased the burdens on the financial security of middle-class families.

 

            Even though you, the reader, may not plan on going to a nursing home . . . even though you may have a spouse or children who say they will help care for you at home . . . even though you believe that you have everything taken care of . . . even though you may believe you have sufficient resources to self finance your long term care if need be . . . the reality may be far different . . . if you live.

 

            Because there is a lot of misinformation about the Medicaid program and how to self-qualify for those benefits, some foolishly transfer their assets or make other changes to the way they hold title to their home, bank account, or other assets.  Often these changes cause very long periods of disqualification from receiving financial benefits to help pay for long term care.

 

            For example, almost every gift or transfer of a home, money or other assets after February 8 of last year now will result in a Medicaid disqualification.  Thus a Medicaid "penalty" period will be imposed when you:

 

 

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  • 1. Help a grandchild pay for education.
  • 2. Help a family member with medical expenses.
  • 3. Help a family member who is out of work.
  • 4. Help a family member who is in a foreclosure action.
  • 5. Help a family member in a divorce matter.
  • 6. Help a grandchild who is purchasing a first home.
  • 7. Help a family member who is starting a business.
  • 8. Help a family member whose business is failing.
  • 9. Help with living expenses of a child.
  • 10. Help a family member get out of jail by posting bond.
  • 11. Help out a care giver child with the general living expenses of the parent living in the child's home.
  • 12. Help out a child who is caring for a parent in the parent's home.
  • 13. Pay for a family vacation.
  • 14. Contribute to a church.
  • 15. Contribute to a charity.
  • 16. Give cash to a perpetrator of a consumer scam not reported to police.
  • 17. Contribute to a high school or college.
  • 18. Are unable to provide written records to support the gift or transfer.
  • 19. Contribute to the support of a political party.
  • 20. Pay for a granddaughter's wedding.
  • 21. Pay for a child's emergency home repair.
  • 22. Convey your home to a family member.
  • 23. Convey the family farm or an interest therein to a family member.
  • 24. Sell a farm or business.
  • 25. Dispose of business interests at a discount.
  • 26. Co-sign for a consumer loan on behalf of a family member who then defaults.
  • 27. Loan money to a family member who then defaults.
  • 28. Give a gift for a birthday, anniversary, holiday, graduation, etc.
  • 29. Engage in tax planning by giving annual exclusion gifts.
  • 30. Give a child an ownership interest in a business.
  • 31. Add a child's name to a deed.
  • 32. Transfer assets to a Land Trust.
  • 33. Transfer assets to certain other types of trusts.
  • 34. Transfer a monetary award or winnings.
  • 35. Disclaim an inheritance.

 

 

            The list could go on much longer giving many more examples of the hazards created by the changes to the Medicaid law.

 

            My point is not to give an exhaustive list of traps . . . but rather to alert every one who reads this column to the potential danger that could come back to bite them.  Common, ordinary business, family, and estate planning decisions our readers may have made now create significant risks to their financial security . . . and the ability to maintain their dignity and quality of life.

 

            A knowledgeable and experienced elder law attorney can help a person and their family plan around these traps.  Delay works only causes the problem to get worse.  By being proactive, a family can preserve their financial security and what most people value most - their independence, dignity and quality of life.

 

            Richard Habiger is an elder law attorney.  You may contact him at 618-549-4529 or Richard@HabigerElderLaw.com.


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Phone: (618) 985-4529