Medicaid Planning

Title XIX of the Social Security Act was enacted in 1965 and is a joint federal and state program whose purpose is to pay for the medical care of American citizens and permanent residents who are poor and who are aged, blind or disabled, or members of families with dependent children.

Medicaid Planning is when people to try shield their assets from government taking so that they can have the government pay for their care. However Medicaid Planning has been viewed by some attorneys as a moving target because eligibility and asset protection rules are subject to review and interpretation by government agencies that some argue believe that if people have assets they should not hide those assets which would require the taxpayers to pay for their care.

Medicaid Planning is a highly complex area that should not be considered lightly and must be done with the proper counsel of a well versed attorney. Below is non-exhaustive information related to Medicaid Planning and eligibility. It is possible that the information below may be subject to change almost as soon as they are written, therefore you must not solely rely on this information but you must meet with a qualified attorney.

Medicaid Eligibility

To be eligible for Medicaid you must have a medical necessity and be under the asset limit. An individual person can have up to $2,000 in assets and a married couple can have up to roughly $126,000. There are some assets that are countable towards these limits and some assets that are not.

Non-Countable Assets may include:

  • Real estate that is the couple’s primary residence (less than roughly $828,000 in equity)
  • One car
  • Funeral arrangements
  • Carefully drafted irrevocable income-only trust
  • Special needs trust established for one or both spouses created by a third party

Countable Assets may include:

  • Joint bank accounts and assets
  • Revocable trusts
  • Annuities that can be surrendered
  • Irrevocable trusts that allows either spouse to access principal

 

About the Author

Peter Moustakis
Peter Moustakis is the Managing Member of Sowerby & Moustakis, PLLC with locations in Massachusetts and New Hampshire. Peter has received an award related to estate planning, contributed to 2 family law publications and authored the book “Estate Planning and the Modern Family: Old School Meets New School. He is a former President, Vice-President, Secretary Treasurer and Education Coordinator of Business Networking International Commerce Connection in Wayland, MA. He is also the former vice chair of the animal law committee at the Massachusetts Bar Association and served on the New Hampshire Bar Association Ethics Committee. Peter believes that community service is important and has served on the Amherst town Ways and Means Committee for 4 years and was chair of the committee for 2 years.