Morrison Law Group, PLC

Estate Planning | Business Planning

Attend a Free Workshop SCHEDULE A CONSULTATION

Offices in Metairie & Covington (504) 831-2348

  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • Estate Planning Pre-Consultation Form
    • Reviews
      • Our Reviews
      • Review Us
    • Request a Guest Speaker
    • Succession Pre-Consultation Form
  • Estate Planning
    • Asset Protection
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Incapacity Planning
    • Legacy Planning
    • Pet Planning
    • Probate and Successions
    • SECURE Act
    • Special Needs Planning
  • Medicaid Planning
    • Medicaid & Nursing Home Planning
    • Free Medicaid/Long-Term Care Calculator
  • Business Planning
    • Business Planning
    • Business Succession Planning
    • Family-Owned Businesses
    • Small Business Medicaid Planning
  • Resources
    • Estate Planning Resources
      • Estate Planning Definitions
      • Estate and Gift Tax Figures
      • Estate Planning Reports
      • Estate Planning Checkup
      • Is Your Estate Plan Outdated?
      • Incapacity Planning Definitions
    • Elder Law Resources
      • Are You A Caregiver?
      • Coping With Alzheimer’s
      • Guardianship & Conservatorship
      • Hospice Care
      • Elder Law Reports
      • Elder Law & Medicaid Definitions
    • Newsletters
    • Trust Administration & Louisiana Succession Resources
      • Bereavement Resources
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
    • Families of Children with Special Needs
    • Frequently Asked Questions
      • Estate Planning FAQ’s
      • Trust Administration & Probate Frequently Asked Questions
      • Legacy Wealth Planning FAQ’s
      • Frequently Asked Questions for Families Without an Estate Plan
  • Blog
  • Contact Us

How You Can Provide for Your Disabled Child and Still Qualify for Medicaid

September 17, 2021 by Ronald "Chip" Morrison

David and Amy have been happily married for over 50 years and are now well into their retirement years. They have two grown children. Their daughter Sarah is an engineer, while their son Allen has special needs and lives in a group home. Amy is very concerned lately because it looks as though both she and her husband will be living in a nursing home in the near future. She is unsure how that will affect Allen and the financial help they have always given him. The good news is that Amy doesn’t need to worry. David and Amy will be able to continue providing for Allen by using an exception to the normal asset transfer rules.

Amy’s Dilemma              

David has been living in a nursing home close to their family home since he suffered a stroke about six months ago. So far, David’s nursing home expenses have not adversely affected the couple’s finances thanks to the Medicaid “Spousal Impoverishment” rules which allow Amy to keep some of the couple’s assets and a portion of David’s monthly income while still finding David eligible for benefits. Amy, however, suffers from Parkinson’s disease which has progressed and she will be joining David at the nursing home in the near future. This has Amy worried about what will happen to their son Allen. He cannot work and has depended on Supplemental Security Income (SSI) and his parent’s financial support for his entire life. Amy is aware that Medicaid rules generally prohibit asset transfers prior to applying for benefits. How can Amy ensure the assets she and David have will continue to be used for Allen’s care and maintenance after Amy enters the nursing home?

The Five-Year “Look-Back” Rule

Because Medicaid is a “needs based” healthcare program, both income and asset limits apply to eligibility. The income limit is directly tied to the Federal Poverty Level. The asset limit prohibits an applicant from owning “countable resources” valued at more than $2,000 if applying as an individual or $3,000 if applying as a couple. Furthermore, the five-year “look-back” rule allows Medicaid to review an applicant’s finances for the five-year period prior to applying for benefits. Any asset transfers made during that time period for less than fair market value will usually be disallowed and the value of the asset imputed back into the applicant’s estate for purposes of determining Medicaid eligibility. If an applicant’s assets exceed the limit, a waiting period will be imposed, which is determined using a formula that divides the overage by the average cost of a month of long-term care in the state. For example, David and Amy have countable assets that exceed the limit by $80,000 and the average cost of nursing home care in their state is $5,200 per month. Therefore, a 15-month waiting period would normally be imposed before Medicaid would start covering long-term care costs. David and Amy would be forced to rely on their assets to cover their nursing home expenses during the waiting period. Amy is worried that there will be nothing left to continue supplementing Allen’s care and maintenance.

The Goods News – Exceptions to Medicaid’s Asset Transfer Rules

Although Medicaid generally prohibits asset transfers within the five-year period preceding an application for benefits, there are a few exceptions to that general rule. One of those exceptions is when the beneficiary of the transfer is a blind or disabled child or a Trust is set up for the benefit of a blind or disabled child. This means Amy can transfer the couple’s $80,000 in “countable resources” into a Special Needs Trust that is set up to provide supplemental income to Allen above and beyond what he receives from SSI. Knowing that she can transfer the $80,000 into a Trust for Allen’s benefit and still qualify for Medicaid benefits alleviates Amy’s concerns and allows her to focus on caring for David and her own health.

Morrison Law Group, PLC has devoted its practice to estate planning and elder law matters for more than 16 years and has been a Member of the American Academy of Estate Planning Attorneys since 2017. Morrison Law Group, PLC is one of only three firms in Louisiana to be admitted to Academy Membership. The firm has helped thousands of clients meet their estate planning goals and pass on lasting legacies to their loved ones. To learn more about how you can achieve your estate planning goals, please call (504) 831-2348 or contact us through our website.

  • Author
  • Recent Posts
Ronald
Ronald "Chip" Morrison
Ronald “Chip” Morrison, Jr. is a Board Certified Estate Planning Law Specialist as certified by the Louisiana Board of Legal Specialization. He is admitted to practice before all State courts in Louisiana. He is also admitted to practice before the United States District Court for the Eastern and Middle District of Louisiana.
Ronald
Latest posts by Ronald "Chip" Morrison (see all)
  • Estate Planning is Simple….Right? - February 7, 2023
  • What Happens in My Initial Estate Planning Consultation? - February 2, 2023
  • How to Leave a Mess to Your Heirs - January 30, 2023

About Ronald "Chip" Morrison

Ronald “Chip” Morrison, Jr. is a Board Certified Estate Planning Law Specialist as certified by the Louisiana Board of Legal Specialization. He is admitted to practice before all State courts in Louisiana. He is also admitted to practice before the United States District Court for the Eastern and Middle District of Louisiana.

Morrison Law Group, PLC

Subscribe Our Blog

Map

Morrison Law Group PLC (Metairie Office)MAP Gabb Morrison LLP (Covington Office)MAP
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • RSS
MORRISON LAW GROUP
law-pay

© 2023 American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy