Elder law, Medicaid planning and Special Needs Trusts: What happens when Medicare will not pay for long-term medical care costs?

Needs Based Government Assistance and Special Needs Trusts

It is never too early to start Medicaid planning. The goal is to focus on paying for long-term medical care and protecting your assets. By planning for Medicaid to pay for an amount of long-term care, it allows seniors to pass on their wealth while still maintaining long term medical care. With careful planning and the assistance of an attorney, you may be able to receive needs-based government benefits without having to deplete your assets, and ensure that and your children will be able to receive such government assistance if needed.

There are selected categories of people in Florida who may be eligible for Medicaid benefits, such as the elderly (age 65 and above), pregnant women, and people with certain disabilities. There are also a few other requirements to be eligible for Florida Medicaid, such as being a resident of the State of Florida, a U.S. national, citizen, permanent resident, or legal alien; having a financial situation that is considered low income or very low income; and owning assets below a certain threshold. If you are one of the selected categories of people who qualify for Medicaid, there is planning that can be done to help you meet the other requirements. However, there is a 5 year look-back rule regarding any uncompensated transfers that you make, so it is best to plan early and anticipate your future need.

Furthermore, it is important to ensure that your children who need government assistance will be able to receive government benefits. Parents typically want to leave their estate to their children, but if not planned carefully, a child’s inheritance may disqualify him or her from receiving government benefits. If a parent left a disabled child an estate exceeding the threshold of assets for any needs-based assistance, they would not be eligible for government benefits until those funds have been exhausted. Thankfully, an estate planning mechanism known as a special needs trust exists to help parents in this predicament. Special needs trusts can allow a child to benefit from his or her parents’ assets or a legal settlement or judgment without disqualifying them from receiving government benefits, such as social security and Medicaid.

Prior to the establishment of special needs trusts, parents would have to disinherit their disabled children to ensure their eligibility for public benefits. These trusts may be created when the grantor is alive or upon his or her death. The funds in a special needs trust can be used to provide services and goods that exceed the benefits offered by social security or Medicaid and could greatly improve a disabled child’s life. These can range from entertainment and transportation to experimental medical treatments, skilled nursing and private rehabilitation services.

A special needs trust can be an extremely valuable mechanism that ensures a severely disabled beneficiary has adequate care if their parent predeceases them. If you are concerned about your own eligibility for government assistance, or the potential care of a disabled loved one after your death, do not hesitate to contact the experienced attorneys of Chepenik Trushin LLP, Bart Chepenik, 305-613-3548, Brad Trushin, 305-981-8889, Ms. Jacqueline Schneider, Board Certified in Elder Law, 305-981-8889, who are ready, willing, and able to assist you with your estate planning, elder law and Medicaid planning needs, both in crisis moments and in proactive long term family planning.


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