If you want to qualify for Medicaid, how should you prepare?
Individuals seeking to qualify for Medicaid may have several planning strategies available to them. For example, certain expenditures are allowable, such as remodeling a home to accommodate a wheelchair, purchasing a hospital bed or purchasing a new vehicle. The earlier the planning starts, the more options are available for families. There are two modes of planning. One is preplanning, which often involves the purchase of long-term care insurance (for insurable clients) and/or creation of a trust. The second is crisis planning, which occurs when a family member needs to go into a nursing home immediately.
Families should seek trusted experts to ensure that they understand the Medicaid laws and can develop a plan to protect assets so loved ones can qualify for Medicaid. Proper planning enables individuals to provide for long-term care of themselves and their spouses, as well as ensure financial security of loved ones.
What sort of documentation is needed for proper Medicaid planning?
Planning should include advance directives. There are two documents that should be considered. First, there is a living will. This document states the individual’s intentions and wishes regarding prolonging life in situations were there is no reasonable medical probability that life would continue without artificial means. Second is the health care surrogate, which allows an individual to name the agent (many times a spouse or child) who can make health care decisions for him or her if the person is unable to make those types of decisions because of mental incapacitation. It also allows the agent access to medical information otherwise prohibited by HIPAA. In addition, a durable power of attorney (DPOA) gives the person designated as an agent the power to make gifts, sell real estate, access bank accounts and do many of the things that individuals would not be able to legally do for themselves as long as he or she is mentally capacitated. The DPOA can be made effective upon signing or effective only in the event the person granting the power becomes mentally incapacitated.
How do guardianships work?
In the absence of proper planning, if someone becomes mentally incapacitated, a guardianship must be established. The guardianship process is costly and the control of the decision-making rests with the judge, not with family members. Once a guardian is appointed by the court, all expenditures on behalf of the incapacitated person must be approved by the court. Most judges will not authorize the giving away of the incapacitated person’s assets even if it means that the incapacitated person would not qualify for Medicaid and that the assets have to be used toward the cost of care. Therefore, the opportunity for planning to preserve assets for a spouse or other dependants left at home is lost.
In most cases, the cost of not planning is much higher than the cost of comprehensive planning. Families need a complete analysis and comprehensive planning to achieve the best possible result based on particular goals and objectives.
ANA M. VELIZ is an attorney with Katz Barron Squitero Faust. Reach her at (305) 856-2444 x149 or [email protected].