How Medicaid Works

I attended a webinar that was offered to employees of my employer. The presentation was given by Barnum financial group. They talked about how Medicaid works. Any misinformation is the fault of the note taker.

Medicaid

65> primary fine of health insurance.
The average month call set by each recipient ranges from 9-13 K
To get Medicaid > you can have nothing in your name. if married can have 137 K. a home if relatives are there, once care, cash value of life insurance of $1500, and personal effects.

Long term care insurance:

If you sell your assets in less than 5 yrs. you do to Medicaid > you will need to pay something to the government. if you give your asset before 5 yrs. you won’t be fined. You have no more rights over your assets. Kids have the right to sell the house. If kids sell the house and if you have a high appreciation they will be fined for the house increase of worth. from what you paid> you remove the tax benefits. kids have to pay capital gain on the house.

Other info:

With a life estate: you can occupy the home
Transfer to protection trust: after 5 yrs. equity in the home should not be considered a Medicaid asset.
Parent has rights to reside in the home
No loss of step-up costs basis
No of star credit or other tax breaks
The property is protected from liens from the debts of the transferred

Cons:

Property is vulnerable to liens for the debts of the transferees.
Trustees: must manage the asset; they are the beneficiary. the trustee must approve a sale.
irritable trust > can be protected but an unrevolkible trust can’t be protected.

Transfers that are not penalized:

Given assets to a child who cared for a parent for over 2 years.
Given assets to a disabled child or a trust for a disabled child.
Give the home to a sibling who has an equity interest in any amount and in the home and lives in the home.

Testamentary Medicaid marital trusts:

Enbetteded into will. the recipient can use the funds as wished. the income and principal can be used for their benefit but the assets are protected for Medicaid.
Home equity: is exempt as long as the owner or spouse or minor or disabled child lives in the home.
Life use in a child’s home: when a parent and child combine homes, another strategy is for the parent to purchase a life use in the child’s home. this is a way for the parent to transfer funds to the child without a penalty period.
The parent must pay a fair market price for the life use. that is calculated based on the parent’s life expectancy. The parent must live in the home off at least a year to avoid the Medicaid penalty period. You then have a legal right to live in that home.
Check out the pros and cons to reverse mortgage. research
You may have a one-time appreciation tax exception > (check) you have to live in two of last five years in the home.
What singles should do? need to get a power of attorney.