Elder Care Attorneys, Medicaid Lawyers and the Medicaid Planning Process

Last updated: April 25, 2019

 

What Elder Law Attorneys Do?

Elder law attorneys, also called elder care attorneys, estate and trust attorneys, or Medicaid lawyers, assist persons in preparing for long-term care and death. They assist seniors in a large and diverse array of legal tasks, which encompasses retirement planning, estate planning, creating wills and durable power of attorney, preparing for long-term care, appointing guardianship, creating trusts, and in some cases, Medicaid planning and appeals.

Not all elder law attorneys provide Medicaid planning services and not all Medicaid planners are elder law attorneys. It is important to find a lawyer or non-attorney, professional Medicaid planner that specializes in this area and is familiar with state law.

 

What Medicaid Attorneys Do?

Medicaid attorneys play a large role in both the Medicaid application process, as well as planning for Medicaid eligibility.

Medicaid Application Assistance

Medicaid lawyers, first and foremost, are able to assist Medicaid applicants with the application process, such as filling out the paperwork, providing supporting documentation, and filing the application. While this process can be labor intensive and complicated, in most states it is not required that the person providing assistance by an attorney. For this task, a professional Medicaid planner might be better suited, as it is generally more affordable than hiring an attorney. Learn about the various types of Medicaid planners here.

 

Assist in Meeting Income and Asset Limits

Where applying for Medicaid becomes more complicated is when an applicant is over Medicaid’s income and / or asset limit(s). All states set financial eligibility requirements, limiting the amount of income and assets that an applicant can have to be eligible for Medicaid. To see the eligibility requirements for the state in which you or your loved one resides, click here. Being over the income and / or asset limit(s) does not mean that one cannot become eligible for Medicaid. However, planning techniques to lower one’s countable income and / or assets are required, which is where a Medicaid attorney or Specialist Medicaid Planner becomes invaluable.

 

  Advanced Planning, While Ideal, Is Not Required
Medicaid planning is best done well in advance of the need for care, particularly if one has assets valued over $50,000. This is because Medicaid has a look back period. During this period, an applicant cannot gift assets or sell assets for less than market value in an attempt to meet Medicaid’s asset limit. The look back period is 5 years in all states except California (Medi-Cal has a 2.5 year look back). Violating the look back period can result in a penalty of Medicaid ineligibility for the applicant.

 

Implement Strategies for Protecting Income and Assets

Executing planning techniques for Medicaid eligibility with the intention of missing the look back period is ideal for healthy seniors. One such strategy that elder law attorneys can implement is a Medicaid asset protection trust. This type of trust not only prevents one from becoming ineligible for Medicaid due to gifting assets (if done prior to the look back period), but it also allows one to protect assets for spouses to ensure they can live independently or relatives upon the death of the Medicaid recipient.

Medicaid attorneys and specialists also assist with crisis planning, which occurs when a senior needs Medicaid benefits within 30-60 days. An option to meet the income limit in this case is a Miller Trust, often referred to as a Qualified Income Trust (QIT). In oversimplified language, income that is over Medicaid’s income limit is put into an irrevocable (meaning it cannot be changed or cancelled) trust to be used for very specific purposes. For instance, the medical and long-term care costs of the Medicaid recipient. The income that is put into the QIT does not count towards Medicaid’s income limit. Please note that not all states allow QITs.

 

Maximizing Income and Assets for a Healthy Spouse

For married couples in which just one spouse is applying for Medicaid, there are spousal impoverishment rules in place. These are intended to prevent the healthy spouse, also called a well spouse or community spouse, from having too little from which to live. Medicaid attorneys help married couples to maximize the community spouse resource allowance (the amount of assets the non-Medicaid applicant spouse is able to retain of the couples’ joint assets) and the monthly maintenance needs allowance (monthly income that can be transferred from the applicant spouse to the non-applicant spouse).

 

What Medicaid Attorneys Don’t Do?

Above, we discussed what tasks Medicaid attorneys do in regards to Medicaid planning, but it is also important to cover the tasks that they don’t usually do. One planning strategy that is used to lower one’s countable assets is to purchase an immediate annuity with an insurance company. An annuity takes a lump sum of cash and converts it into an income stream, generally for an applicant’s non-applicant spouse. In order to sell annuities, one must have a license to sell insurance, and in most cases, Medicaid attorneys are not also licensed insurance sales persons.

In addition, Medicaid attorneys generally do not sell irrevocable funeral expense trusts. However, they can do so through a partnership with a licensed insurance sales agent. This type of trust is a legal contract between the Medicaid recipient and an insurance company. It provides a way for one to “spend down” extra assets, while also setting money aside for future funeral / burial costs. Stated differently, as long as the amount of the funeral trust is under the limit for the state in which the Medicaid recipient lives, it is not counted towards Medicaid’s asset limit.

 

Is Medicaid Planning Legal?

Yes, Medicaid planning is legal in all 50 states. However, who can provide Medicaid planning assistance depends on the state and what types of planning services are offered. According to federal rules, Medicaid applicants are able to receive assistance filing Medicaid applications from anyone they choose, as well as hire anyone they choose to represent them in the case of an appeal for denial of benefits. However, it is illegal for persons who are not attorneys to practice law, which can be a grey area, as the definition of the practice of law can vary based on the state in which one resides.

Are there states that prohibit non-attorneys from doing Medicaid planning? At the time of this writing, there are five states that prohibit non-attorneys from doing some Medicaid planning services. In these states for these specific services, non-attorney, Medicaid specialists often partner with attorneys to provide services. These states are Florida and Texas and to a lesser extent, New Jersey, Ohio, and Tennessee.

 

Is a Lawyer Needed to get Medicaid?

The short and simple answer is no, a lawyer is not needed to get Medicaid. However, based on one’s marital status, financial holdings, and complexity of other relevant factors, it may be best to hire an attorney who specializes in Medicaid in the state in which one resides. Also, as covered above, it is illegal for non-attorneys to do some aspects of Medicaid planning in several states. For persons who have Medicaid cases that are fairly simple and straightforward, a Medicaid planner, also called a Medicaid specialist or a Medicaid Advisor, might be a good option.

Working with a professional Medicaid planner can be a lot more cost efficient than working with a Medicaid attorney. In addition, Medicaid planners might be better suited for certain tasks, such as providing assistance with filling out the application, gathering supportive documentation, submitting and following up on the application process, and saving money for the Medicaid applicant or the Medicaid applicant’s healthy spouse. This is because these tasks are generally the focal point for Medicaid planners. On the other hand, Medicaid attorneys often focus more on the legal aspects of Medicaid planning, such as creating Medicaid asset protection trusts or Qualified income trusts, which makes them the better option for this type of assistance.

  To find a professional Medicaid planner in your area, click here.

 

Cost of Elder Law Attorneys and Medicaid Planning

There isn’t a clear-cut answer as to the cost of hiring an elder care attorney for Medicaid planning purposes. Some Medicaid lawyers offer free consultations, while others charge an initial consultation fee or offer Medicaid planning conferences that range in cost from approximately $175 – $500. After the consultation / planning conference and gathering of the facts and needs, a price for services can be quoted. Medicaid planning fees can range from $1,000 to $12,000.The following factors can all impact the cost the cost of a Medicaid planning engagement. The more complicated the case, the higher the fees.

  • If the Medicaid applicant is single or married
  • Ages and health of spouses and children
  • Amount and types of assets and what is involved in the reconfiguration of income and / or assets to meet the limit(s)
  • Urgency for the need for Medicaid
  • Whether assets have been gifted in the past
  • If estate and incapacity planning documents need to be completed
  • If and when pre-planning has been done

The costs of hiring an elder law attorney or Medicaid planning specialist might seem high in the short-term, but in the long-term, doing so can protect many assets that would otherwise not be protected. Therefore, a Medicaid expert, whether an attorney or not, can save a Medicaid applicant and his / her family a lot of money and can be a very wise investment.

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