Protecting Assets After Illness

Medicaid Asset Preservation in Time of Crisis

You should never assume that it is too late. Quite often you have legal options to save some or all of your life savings. The Koldin Law Center, P.C. can help you make the right decisions when you have a health care crisis.

Transferring Assets

By transferring assets to another person or to an irrevocable trust, you can protect your life savings. However, there may be a transfer penalty period of ineligibility which needs to be reviewed.

Under certain types of Home Care in New York State, there is no transfer penalty.

Transferring Assets to A Special Exempt Person

There are numerous special exceptions where there is no transfer penalty. Some examples include:

1. Healthy Spouse
   
   
2. You Have a Disabled Child (Supplemental Needs Trust)
   
   
3. Child Living With Parent
   
   
4. Dependent Relative Living With You
   
   
5. Co-Owner of Property is Living in the Property
   
   
6. Sibling is Living with You

Special Rules for Special People

1. Blind
   
   
2. Legally Disabled and Under Age 65 (Supplemental Needs Trust)
   
   
3. You are Receiving a Personal Injury Settlement (Supplemental Needs Trust)

Special Rules for the Healthy Spouse

1. Is Your Income Below $2,610 Per Month?
   
   
2. Go to Family Court to Obtain an Order of Support
   
   
3. Go to Fair Hearing to Keep additional Life Savings

You Can Purchase An Annuity

Under the Medicaid Laws in New York State, the community spouse (healthy spouse) is entitled to retain a minimum of $74,820 and a maximum of $104,400 of the couple's life savings. The community spouse is also entitled to retain $2,610 of the couple's combined income. A single individual in a nursing home is entitled to retain $4,350 ($13,050 as of April 1, 2008) of his/her life savings and $50 per month of income. (These are 2008 figures). If the couple's or single person's resources exceed $74,820 or $4,350 ($13,050 as of April 1, 2008), then the excess normally must be spent on the cost of care before Medicaid eligibility can be established.

The excess resources can be protected by purchasing an annuity. By purchasing an annuity, you are converting your life savings into an income stream. Any monthly payments you receive from the annuity are considered income and will be subject to the income contribution rules, but will not be subject to the resource depletion rules. Medicaid must be designated as the primary beneficiary of the annuity to be reimbursed for its expenditures. Any funds remaining after the Medicaid Agency has been reimbursed may be distributed to your designated beneficiaries.

The annuity contract must fully comply with Federal and State Medicaid laws and regulations.

There are both advantages and disadvantages to this asset preservation option as compared to the other alternatives discussed in the Medicaid section of this Web Site.

Special Assets

1. Family Business
   
   
2. Individual Retirement Accounts ( IRA, 401(k), Keogh, etc. )
   
   
3. Life Estates
   
   
4. Joint Assets