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What is the Medicaid Five Year Look Back?

April 4, 2017

Filed under: Medicaid — Neel Shah @ 9:15 am

When planning ahead for your future, a common question that emerges with older adults has to do with Medicaid. This is because the cost of long-term care can be significant and you may need to rely on outside sources like Medicaid in order to afford the services you’ll need if you encounter a long-term care event. Medicaid is available to those individuals who do not have other sufficient assets in order to cover the cost of care. Since the federal government is sensitive to situations in which individuals might try to take advantage of federal help, they employ a number of strategies in order to ensure that the person applying is eligible to receive benefits through the Medicaid program. One of these strategies is the five year look back. Medicaid planning

You might be tempted to begin unloading all your assets as you get older to remove them from your estate as well as to increase your chances of qualifying for Medicaid if you should need it. If this move looks questionable, however, or if you make the decision too quickly without consulting with your estate planning lawyer, Medicaid may penalize you. This is not a situation you want to find yourself in, so it’s important to plan well in advance. The other downside of sudden decisions about your estate is that these could have tax consequences for your loved ones if you’re not careful, so it’s always well worth advance Medicaid planning with the help of an estate planning attorney.

You are ineligible for Medicaid if you transferred assets before applying for your benefits. The government will analyze whether you gave away assets in the five years prior to your application for benefits to determine whether or not you purposefully engaged in this behavior to minimize assets so you would appear eligible for the benefits.

There are legal and valuable strategies you can employ for the purposes of advance Medicaid planning. These should always be discussed directly with your Medicaid planning attorney.

 

Benefits of Advanced Medicaid Planning

October 20, 2016

Filed under: Medicaid — Neel Shah @ 9:15 am

Having a loved one experience a health event that may prompt more intensive care presents a lot of unique challenges for all family members. It can be a confusing and frustrating time with limited decision-making options. Given the rules regarding the Medicaid look-back period, it can be difficult to maximize asset protection and get the most out of planning ahead for Medicaid. 

The reality is that for many families, the first time they consider Medicaid planning is during a time when it’s too late to make advanced planning strategies work. No one wants to think about health deterioration for a loved one or themselves, however, doing so can help to ensure that someone does not have to spend down their own assets in significantly prior to qualifying for Medicaid.

Meeting with an attorney years before considering Medicaid has a lot of benefits. It allows you to consider how you’ll handle your assets now and increases the chances that you’ll be able to pass on assets to loved ones while also having some peace of mind about your own health needs. If you’re nearing retirement age, now is a good time to have an initial consultation about advanced Medicaid planning. This is because you’ll have more options and be able to have greater flexibility with your choices.

Why Do I Need to Think About Medicaid Planning Now?

June 16, 2016

Filed under: Medicaid — Neel Shah @ 9:15 am

If you are relatively healthy now, you may think that you can skip out on the process of planning ahead for long-term care, but this is a mistake. What happens in the event that you sustain an injury or an illness requiring nursing home care and you don’t meet the asset or income test for Medicaid. For far too many individuals, the option is to pay for care out of pocket each month in the nursing home until they have spent down their assets enough in order to qualify for coverage.Medicaid advance planning NJ

Monthly nursing home bills, however, can be more than $3,500 a month, meaning that your entire life savings can be decimated extremely quickly. It also leaves your loved ones, including a spouse, with no financial cushion or protection. It would be extremely frustrating and likely ashamed to feel that a lifetime of hard work and disciplined savings has gone to the waste, leaving your family without any form of protection.

There is also no need to spend majority or all of your assets on nursing home care prior to qualifying for Medicaid coverage. There are safe harbor provisions that allow you plan ahead and protect your assets, but in order to do this, you must approach the planning process well in advance. This is one reason why you need to set up a consultation with an elder law planning attorney who has a focus on Medicaid.

Planning now helps to minimize the chances of problems well into the future. If you have already encountered a long-term care crisis currently, it may be too late to take action, but planning ahead helps to protect your loved ones and your assets. Are you ready to start the process now? Contact our offices to set up a meeting.

 

Do I Really Need an Elder Law Attorney to Help with Medicaid?

May 18, 2016

Filed under: Medicaid — Neel Shah @ 9:15 am

Going through the process of helping a loved one qualify for Medicaid can be extremely overwhelming if you have never encountered it before. Even experienced individuals may find themselves confused by all of the various aspects required to qualify for Medicaid. This is why it is strongly recommended that you consult directly with an experienced elder law attorney when going through this process for yourself or helping an elderly loved one.

One of the first things you need to do in order to qualify for Medicaid is to ensure that you meet the determination of needs score. This is what is used to determine whether or not an individual actually requires long term care in an official nursing home. This assessment can be determined by many different organizations. Additionally, the income eligibility requirement is critical for determining if your income exceeds the private cost of care. Qualifying for Medicaid can be extremely complex as there are numerous rules and regulations associated with this process.Medicaid elder law NJ

The income eligibility requirements and the resource eligibility requirements are some of the most confusing aspects of the process overall. In the event that you have tried to give away assets in order to qualify for Medicaid and you have given away these assets too soon in conjunction with your Medicaid application, the look-back period can be used to deny your eligibility for Medicaid. It can be a significant blow to discover that the government is refusing you Medicaid eligibility.

That is why it’s well worth your time to consult with an experienced individual who has a background as an elder law attorney. If any of this process seems confusing, that’s because it is. This is why you need an elder law attorney who has helped others determine their long-term Medicaid plans and other long-term care issues well in advance. You can help avoid confusions and frustration by working directly with an attorney. Ready to get started? Contact info@lawesq.net today if you have questions.

Should My Spouse Transfer All Of His Or Her Assets To Me To Qualify For Medicaid?

May 5, 2016

Filed under: Medicaid — Neel Shah @ 1:09 pm

It is a bad idea to have a spouse make a major transfer of assets if he or she is going into a nursing home unless you have consulted with an experienced attorney. All non-exempt assets held by the wife or husband are held together and then divided between the two spouses for Medicaid eligibility purposes. shutterstock_357404000

The spouse going into the nursing home could be disqualified from receiving Medicaid until his or her portion of the assets is reduced significantly. It is important to consult with an elder law attorney if you have questions regarding Medicaid. The lookback rule allows Medicaid to deny your application if you transfer assets for less than what would be considered fair market value within five years before your application for Medicaid benefits.

Remember that if you do give away your assets it can be impossible to get them back by legal action. Do not assume that passing on your assets to your loved one allows you to get them back in the future if your loved ones do not want to cooperate with this. Consult with an elder law planning attorney to learn more about your options.

What is Medicaid Planning?

April 26, 2016

Filed under: Long Term Care,Medicaid — Neel Shah @ 9:15 am

Medicaid planning involves a careful consideration of an individual’s assets to determine whether or not he or she legally qualifies to receive nursing home benefits for Medicaid. Many individuals who do not carefully consider this process or who do not have other significant resources to support them in their older years such as long-term care insurance, may have to use all of their personal assets and resources to support an individual who has suffered a healthcare event.shutterstock_322363940

It can also be very problematic for individuals who have no other resources because family members can feel the pressure of having to provide for a loved one who needs nursing home care. This is why it is a good idea to consult with a New Jersey Medicaid planning attorney. One of the most common questions considered in the Medicaid process is whether or not you should get rid of property.

Bearing in mind that Medicaid has a look back period to explore whether or not you have attempted to give away assets so that you may qualify for Medicaid, it’s a good idea to consider your Medicaid planning well in advance. This allows you to take advantage of legal strategies that can help prepare you to qualify for Medicaid appropriately.

Even if you are not yet concerned about your healthcare and your need for potential nursing home care, you should consult with a New Jersey Medicaid planning attorney now to learn about all of your options. Putting a plan in place well in advance is the best approach.

 

 

Materials You Should Have Before Applying for Medicaid

January 13, 2016

Filed under: Medicaid — Neel Shah @ 9:15 am

After discussing your Medicaid application and preparing for it in advance with your elder law attorney, there may be an appropriate time you should begin the application process. There are several things you should know about the Medicaid application process in order to set yourself up for success.

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One of the things that surprises most elderly individuals and their caregivers is the amount of documentation required for a Medicaid application. The more prepared you are, the easier it will be to submit this information and in the proper order so that you do not have any unnecessary delays associated with the application. The following items should be included with your application.

  • Birth certificate
  • Marriage information
  • Social security award letter or social security card
  • Information about all loans owed
  • A copy of a residential rental agreement (if applicable)
  • Health insurance premiums and identity cards
  • All unpaid medical bills
  • Alimony statements or child support statements
  • Any cars owned
  • Pay stubs over the last six weeks
  • details of any pension plans where benefits are being received
  • Copies of tax return for the last five years
  • All life insurance statements and policies including any cash value accumulated within these policies

As you can see, the Medicaid application process can be quite extensive and may be a bit overwhelming. Planning in advance of options you have with your assets as well as qualifying for Medicaid can be an important first step to discuss with an elder law attorney.

Planning for Medicaid? Best to Include an Attorney

October 19, 2015

Filed under: Medicaid — Neel Shah @ 9:15 am

With an aging baby boomer population, concerns about paying for long-term care are front and center for many people right now. This has also led to a burst of programs marketed to individuals at or post-retirement, promising to help with the Medicaid qualification process. When engaging in this, you should consider setting up a meeting with an experienced elder law attorney to walk you through how this process works and what you can do to prepare legally.shutterstock_176062208

Medicaid planning is full of intricacies and strict government requirements, so someone with a background in helping others accomplish similar goals is prudent. As a potential Medicaid beneficiary, it’s also helpful for you to understand how this government program can support your needs for healthcare now and in the future.

Small mistakes can cost you in a big way, especially if you attempt to spend down assets without some insight from an elder law attorney. Since the federal program uses a look-back period to analyze how you might have disposed of any assets, an action you thought that might be helping you could actually delay the time period during which you become eligible for benefits. This is where an attorney’s counsel becomes so important: talk with your elder law attorney about what steps to take to better understand Medicaid and to legally qualify for it.

Top Myths About Long-Term Care Coverage Through Medicaid

May 19, 2015

Filed under: Long Term Care,Medicaid — Neel Shah @ 9:15 am

Usually, it’s Medicare that gets the bulk of news coverage, but Medicaid is still quite confusing for many people. Here are some of the most common misconceptions about Medicaid. shutterstock_129373694

You Must Be Poor to Get It

Medicaid helps people qualify for long-term care, and it’s true that you cannot have more than a specific amount of assets to qualify, but there are some exempted assets. Consult with your elder law specialist to learn more.

Medicaid Is Unnecessary Since Medicare Will Cover My LTC
Medicare only covers up to 100 days of skilled nursing care, so it’s not permanent. Medicaid is more likely to help a patient over the lung run.

Transferring Your Money to Your Kids Will Help With Medicaid Qualification

While it’s true that you don’t want to have too many assets in the Medicaid qualification process, you don’t want to assume that all your assets should be transferred to children. The reason is because there is a penalty period if Medicaid believes that you transferred assets in the years prior just to qualify for coverage.

Make sure you’re clear about how Medicaid- as well as Medicare- works when it comes to your long-term care. Contact an elder law specialist to get more details about this process. Contact us at info@lawesq.net

Fast Facts on Nursing Homes and Medicaid

May 15, 2015

Filed under: Medicaid — Neel Shah @ 9:15 am

Last week on the blog we discussed how, when done properly, Medicaid planning is just a piece of the estate planning puzzle rather than an underhanded way to skirt government regulations. Unfortunately, there’s still quite a perception out there that Medicaid planning is somehow dubious and trying to capture as much of the government’s money as possible. shutterstock_64598182

The crackdown on Medicaid planning opportunities isn’t really new, since Congress tightened the penalties for giving away money to qualify back in 2007. The average cost of a nursing home in America is $75,000 per year, and it’s even higher in New Jersey and along states along the Northeast. That being said, just one year in a nursing home could obliterate a parent’s savings. That’s where Medicaid planning comes in.

There are strict rules about transferring assets and giving gifts in the years before qualifying for Medicaid. Consult with an attorney so that you are fully aware of the best strategies to employ and the proper timeline to follow so that your loved ones are not hit with any penalties. Medicaid is there to help, but you must be willing to follow the rules and institute planning early if you intend to get the most out of this system. Consult your elder law attorney for more details. When you need an elder law specialist, we’re here to help- reach out to us at info@lawesq.net.

Is Medicaid Planning An Effort to Avoid Government Regulations?

May 5, 2015

Filed under: Medicaid — Neel Shah @ 9:15 am

For some reason, there’s a belief out there that Medicaid planning is against the law or in some way trying to circumvent the system. The reality is that this is not true at all. In fact, many attorneys and individuals invested in the Medicaid planning process have an expert level of knowledge about government regulations and the importance of working within these guidelines. Despite the fact that Medicaid planning can occasionally get a bad reputation as being unethical, the majority of people dedicated to this cause are committed to ethics and actually make the most out of planning within government guidelines. Law concept

Those who plan to qualify for Medicaid keep are looking ahead for the best way to do so, are simply following the rules of Medicaid just as those using tax deductions are complying with IRS regulations. At least that’s the perspective of ethics columnist Randy Cohen, who used to write for the New York Times.

The fact that long term care costs are increasing simply means that more people are interested in Medicaid planning and are seeking to understand their options more comprehensively. This doesn’t make planning unethical or illegal in any sense, in fact Medicaid planning represents an understanding of the importance of compliance. We’re waiting to help set your appointment: contact info@lawesq.net today.

Should I Just Give My Assets to My Kids To Qualify for Medicaid?

April 1, 2015

Filed under: Asset Protection,Asset Protection Planning,Medicaid — Neel Shah @ 9:15 am

In the event that you or your spouse are facing a long-term care crisis and are concerned about spending down your assets quickly in order to qualify for Medicaid, it’s important to be aware of some of the potential pitfalls of acting too fast without carefully considering your options.

Individuals who are not familiar with the Medicaid qualification process might think that it’s a safe bet to pass on assets to children in order to reduce the volume of assets linked to the individuals attempting to qualify. Passing on these assets to children may be done with good intentions, but it can actually do more harm than good if you’re not careful. canstockphoto1739163

One of the disadvantages associated with transferring these assets is that doing so gives you no control over them in the future. Imagine a scenario where the child is sued and all of the assets are taken. Although this can be disheartening to think about, it’s also important to consider that giving away too many assets in an attempt to qualify for Medicaid can actually trigger a penalty. Medicaid looks back at gifts over the previous five years to determine if an individual has attempted to disperse assets in order to qualify for the government program. Since Medicaid is geared towards low-income individuals, if it is found that you transferred assets too aggressively in an attempt to qualify, a penalty may be calculated to determine the amount of nursing home care that could have been paid for with that gift. The applicant will be ineligible for Medicaid during a particular period if this is determined.

While Medicaid is a critical program for most individuals facing a long-term care crisis, you need to apply for it and prepare for it under the guidance of an experienced elder law professional. Don’t take any actions until you’ve consulted with an expert- email us at info@lawesq.net.

Tips for Safely Spending Down Medicaid

February 26, 2015

Filed under: Medicaid — Neel Shah @ 3:02 pm

It’s not uncommon to discover that you have too many assets when you are first trying to qualify for Medicaid. In fact, as an increasing number of adults are helping aging parents, this is actually one of the biggest challenges in terms of preparing for long term care. In order to meet qualification guidelines, the applicant must have insufficient assets on their own.

First off, make sure you work with an experienced elder law firm so that you are aware what assets should be “spent down” and which ones don’t have to be counted to begin with. Household goods, some prepaid burial and funeral expenses, the home, personal effects, and others may qualify as “non-countable” personal assets and shouldn’t be spent down. An experienced elder law firm can tell you what assets should be spent and which ones should be left alone. sdf

Here are a few tips to help you get the most out of qualifying for Medicaid:

  • Payments related to non-countable assets may allow you to help improve your home, for example, which spending money that could count against you in terms of Medicaid. If your home is exempt, you may be able to make plumbing repairs that would be considered “allowable”.
  • Funeral and burial expenses may be “pre-paid”, thus taking care of an important need ahead of time. Work directly with your estate planning specialist and elder law professionals to determine your state’s limits.

Details are crucial in Medicaid qualification, so you should reach out for help as soon as possible to ensure that you are following guidelines. Contact our offices today at info@lawesq.net to learn more about Medicaid and other elder law issues.

 

Preventing End of Life Costs from Destroying Your Estate

May 19, 2014

Filed under: Asset Protection Planning,Elder Law,Long Term Care,Medicaid,Nursing Homes — Tags: , , , , , — Neel Shah @ 9:58 pm

It’s very rare that anybody has covered all possible risks in terms of their wealth management when it comes to income and cash flow, guaranteed income, cash, investments, and the connection between long term care and your estate. If you skip planning for long term care expenses, you may find that your other wealth management tools and strategies don’t hold up to the rising cost of healthcare.

Preventing End of Life Costs from Destroying Your Estate
(Photo Credit: colourbox.com)

The average cost per month for a long-term care facility is over $7,000. That’s why long term care planning is so essential. When a long-term care insurance policy is too expensive or not an option because you do not qualify.

There are alternatives, however. Structuring your estate in a particular manner can help you guard against the cost of long term care. Two common strategies are eliminating assets through trusts and transfers. This means that down the road, if you need to reduce your assets for Medicaid eligibility, you’ve already done most of the work. If you are confronted with a long-term care event before you have done this, you could find yourself having to “spend down” your assets anyways before government assistance kicks in, depleting your savings and forcing you to do it rapidly, which is rarely in your best interest. However, if you do it incorrectly, it has the potential to have a severely negative impact on eligibility and penalty periods. To learn more about trust planning, gifting, and other strategies to mitigate risk in estate planning, email info@lawesq.net or contact us via phone at 732-521-9455.

‘Gifting’ May Be Penalized By Medicaid

March 11, 2014

Filed under: Gifting,Medicaid,Nursing Homes,Spending Down,Trusts — Neel Shah @ 4:44 pm

While people can “gift” up to $14,000 each to anyone they want to each year without tax penalty, that tactic is not going to fly if it is being done to “spend down” in order to get Medicaid to pay for nursing home care.

Centers for Medicare and Medicaid Services (Me...

Centers for Medicare and Medicaid Services (Medicaid administrator) logo (Photo credit: Wikipedia)

If a person is “gifting” money to family or friends in order to spend down to reach the resource limit for Medicaid nursing home coverage, it better be done five years ahead of time, according to an article in the New York Daily News.

Gifts made within five years of applying are likely to disqualify the gift giver from obtaining coverage for a period of time based on how much was given. The larger the gifts, the longer the wait.

Medicaid will presume the gifts were made to get around the criteria for coverage.

The penalty period is likely to be in place even if the gifts were put into a trust.

Because Medicaid planning and the use of trusts is complex, the article suggests consulting with a qualified estate planning or elder law attorney.

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You have Options For Your or Your Loved One’s Long-Term Care Needs

January 29, 2014

Filed under: Elder Law,Long Term Care,Medicaid — Neel Shah @ 7:24 pm

As life expectancy continues to rise, so does the possibility that an individual will require long-term care at the end of his or her life. A recent article states that 7 in 10 Americans will require long-term care at some point in their lives. Unfortunately, as life expectancies rise, so do the costs of long-term care.

ElderlyWomanInGlasses

(Photo credit: Wikipedia)

Many families do not realize how high the costs of care are until they are trying to place a loved one in a facility.  Many studies estimate the cost to range from $8,000 per month to $13,000 per month.  At that point, it is too late to utilize any sort of planning or saving and the financial reality can be devastating. Therefore, it is important to have a plan to cover your long-term care costs. Below are three of the most common ways that people plan to pay for their long-term care.

1. Save and pay out of pocket: If you believe that you will be able to pay for your long-term care costs out-of-pocket, be sure to conduct some research to predict how much money you will need to save and account for contingencies.
2. Purchase long-term care insurance: Long-term care insurance is becoming a more popular method through which individuals pay for their long-term care costs. Importantly, be sure to purchase this early for the best rates.
3. Spend down your assets so that you apply for Medicaid: Medicaid is a needs-based program. Therefore, your assets must be below a specific threshold in order to qualify for benefits. If you are above the threshold, you may be able to carefully spend your assets down until you qualify for coverage.

Which is right for your family?

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Planning Now for the Potential of Alzheimer’s Later

December 11, 2013

Filed under: Incapacity Planning,Long Term Care,Medicaid,Spending Down — Neel Shah @ 9:00 am

More and more senior Americans are forced to deal with the devastating diagnosis of Alzheimer’s. Without planning, an Alzheimer’s diagnosis can be a devastating financial blow to an individual and his or her family. A recent article discusses how individuals can take control of their financial futures by planning now for the potential of an Alzheimer’s diagnosis later.

One potential way through which a person can get funds to pay for medical care is through Medicaid. Medicaid is a need-based program, so a person must meet certain income requirements to apply. If a person is above the threshold to receive Medicaid, he or she must spend-down assets in order to qualify. However, the spend-down of assets must be done carefully,with the oversight of an estate-planning attorney. Importantly, Medicaid employs a look back provision that will disqualify certain distributions of wealth if they occur within five years of a person’s application for Medicaid.

Often, Alzheimer’s patients require more care than Medicaid will cover. One option to fill the gap is through long-term care insurance. These insurance policies provide broad coverage for care received in a patient’s home, assisted living facility or nursing home. It is important to get long-term care insurance early, as rates go up as a person ages. Additionally, it may be difficult to find an insurer after a diagnosis of Alzheimer’s.

Considering Gifting Your Home? Read This Before You Give Away The Castle.

December 4, 2013

Filed under: Gifting,Home Protection,Life Estate,Medicaid,Spending Down — Neel Shah @ 9:00 am

Many parents want to believe that their children would never kick them out of their own home. However, the sad reality is that this has been the subject of more than one lawsuit. As a recent article explains, if you are considering gifting your home to your child or children, it is important to consider that possibility and other consequences.

First, the gift of a home is often a taxable gift. If a parent signs a deed gifting the house to their children, he or she should file a gift tax return as well. If this gift tax return is not filed, the parent may lose the ability to claim an exemption from the gift tax and may owe taxes on the transaction.

Additionally, gifting a house to children allows them to sell the house out from under the parent. The children can attempt to send the parent to a nursing home or simply evict the parent altogether.

Finally, gifting a home can have serious implications as far as Medicaid is concerned. Medicaid is a need-based program that employs a look-back provision of five years. Therefore, if a home is gifted within the five year period before a parent applies for Medicaid, the value of the home is considered in the parent’s assets. Therefore, depending on the value of the home, the gift could make the parent ineligible for Medicaid benefits.

Often, the ideal scenario involves a system whereby the value of the home is gifted, but the parent is permitted to live in the home for as long as they like or for a certain period of time.  Parents should consider using a combination of life estates and proper trusts to achieve these goals.

Long Term Care Planning: Understanding the Medicaid Look-Back Provision

November 13, 2013

Filed under: Elder Law,Long Term Care,Medicaid,Nursing Homes — Neel Shah @ 6:01 pm

For those engaged in the process of Long Term Care Planning, perhaps the most intimidating proposition is Medicaid’s look-back provision. This provision provides that certain assets that a person no longer owns will still count toward the calculation of his or her total assets to determine whether he or she qualifies for Medicaid coverage. A recent article discusses the look-back rules.

The Medicaid look-back period is the five years prior to that date upon which an individual applies for Medicaid benefits.  All transfers made during this period are subject to scrutiny by Medicaid officials. For the purposes of calculating benefits, it is as though all gifts made during this period never occurred. For example, if an individual gave his or her child $20,000 the year before he or she applied for Medicaid coverage, the government would likely count that $20,000 towards the person’s assets to determine whether he or she qualifies for Medicaid.

Some individuals try to avoid the look-back provision by setting up a trust. Although Medicaid officials do not consider a trust to be a part of a person’s assets, assets moved into a trust are considered. Therefore, if assets are transferred to a trust during the five-year look-back period, Medicaid officials will take them into account.

Individuals often mistakenly believe that Medicaid has an annual gift-giving exclusion similar to that of the IRS. However, this is not true. Although the IRS allows taxpayers to give gifts up to a certain amount without invoking tax consequences, there is no parallel in the Medicaid determination.

What is an Irrevocable Funeral Trust?

October 24, 2013

Filed under: Elder Law,Long Term Care,Medicaid — Neel Shah @ 9:00 am

One tool for those looking to spend down their assets in order to apply for Medicaid benefits is the Irrevocable Funeral Trust (“IFT”). Through an IFT, a person can set aside funds to pay for his or her funeral and burial expenses. Importantly, funds in an IFT are not considered to be part of a person’s estate for purposes of Medicaid qualification. A recent article discusses the basics of the IFT.

Importantly, an IFT should not be used by just anyone. High net-worth individuals who will not require Medicaid assistance, for example, would not use an IFT because they likely have sufficient funds or insurance policies that will cover medical expenses.

However, those who are worried about how to pay for their long-term care costs and do not have money earmarked for their funeral should consider an IFT. A person taking out an IFT will be required to pay completely in advance, and will not be permitted to take out an IFT for an amount that exceeds 125 percent of the average funeral cost.

Importantly, no medical underwriting is necessary for an IFT. Beyond the one-time payment to the insurance company, the insured party faces no expense from the trust.

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