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Medicaid Myths, Part 2
By Michelle Beneski, Esq.
Each month, the attorneys of Surprenant & Beneski, P.C. donate several hours of their time presenting seminars for various community groups and professional associations. We believe strongly that the best way to help the elderly is to clear up many misperceptions about the Medicaid program. These myths cause too many of society’s most vulnerable citizens to make mistakes that can cost them thousands of dollars or cause them to spend every last dime of their life savings before seeking help with nursing home and medication costs.
That’s why we’ve again chosen to write about the common Medicaid myths we hear in the community.
“I have to give away everything I own before I can get Medicaid.”
All Medicaid recipients are able to keep some of their assets and still qualify for benefits. The key is to understand what Medicaid considers an “exempt” versus a “non-exempt” asset in Massachusetts.
For instance, a single person in Massachusetts can keep a few items, including the house they lived in before going into the nursing home, one automobile, a specific type of prepaid funeral plan, personal belongings, and up to $2,000.00. The laws surrounding what a married couple can keep are even more complicated and vary depending on each individual’s specific set of circumstances. Generally a community spouse can keep up to $109,560 in 2009, in most cases.
That’s why it’s important to have an Elder Law attorney review your financial situation before you apply for benefits.
“I can only give away $12,000 per year or I won’t qualify for benefits.”
We frequently hear from individuals who have lost the opportunity to preserve thousands of dollars because they believed this myth. In fact, the $12,000 figure is an IRS rule regarding when a gift tax return should be filed and has nothing to do with Medicaid law. And in 2009, the amount increased to $13,000 per person per year.
The truth is that every state has different rules about the amount of money that seniors can give away without creating a long penalty period. When done correctly, the state allows individuals to give away far more than $12,000 a year.
In fact, Massachusetts has laws in place that allow individuals with a disabled child to give away all of their assets, including their home, and still qualify immediately for benefits. But this must be done with the assistance of expert legal advice.
“Our pre-nuptial agreement shows that everything belongs to my husband.”
The state does not take pre-nuptial agreements into consideration when determining Medicaid eligibility. All assets owned by either spouse are considered jointly owned and must be divided and spent-down exactly as they would if there was no pre-nuptial in place. The only way a pre-nuptial agreement is effective is if the couple actually divorces.
Proper estate planning and expert legal advice can ensure that the wishes of both spouses are honored regardless of which one needs nursing home care.
This information is for general informational purposes only and does not constitute legal advice. For specific questions you should consult a qualified attorney. This article was written by Attorney Michelle D. Beneski of Surprenant & Beneski, P.C. The law firm has offices in New Bedford, Mashpee and Boston that specializes in estate, tax, and Medicaid planning.
Michelle Beneski, Esq.
Michelle D. Beneski, Esq. is a partner in the Surprenant & Beneski, P.C. located in New Bedford, Massachusetts. The firm concentrates on Elder Law and Estate Planning Issues.
She is a frequent speaker and author on estate planning topics.
Michelle is a graduate of Pepperdine University School of Law, Cum Laude and holds L.L.M. in Taxation from the University of Florida, College of Law. She is a member of the National Academy of Elder Law Attorneys, Wealth Counsel and the Bristol County Estate Planning Council.
We meet with our clients for Free every three years to ensure the documents still work for them. Surprenant & Beneski, P.C. charges $500 for an initial estate planning consultation. However, this consultation fee will be waived if you reference this article.
If you would like more information on Medicaid planning, call for our Free Consumers Guide to Medicaid Planning or our free report 25 Ways You Can Mess Up Your Estate Plan or to make an appointment for a consultation, call our toll free number (800)929-0491 for a recorded message or call our office at 508-994-5200.
Feel free to contact Michelle at 508-994-5200 or visit www.myfamilyestateplanning.com
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