It happens often to families today. They have to move a family member into a nursing home and it is never easy. You have to take someone out of their comfortable surroundings and move them into an area that they often do not want to go. Nursing home staff try to do the best they can to ease this transition, but it’s difficult.
Then comes the issue of paying for the nursing home. Often, the person must “private pay” until they use up all the assets they own and qualify for Medicaid. The resource limit is $2,000.00, so the person must have less than $2,000.00 to their name to qualify for Medicaid. There are two types of planning for this situation – pre-crisis and crisis. Pre-crisis is engaged in five years before a nursing home stay and can avoid the forced depletion of life savings and real estate. Crisis planning happens once the person has entered the nursing home and it becomes necessary to qualify them for Medicaid to save assets. This becomes very important when there is a spouse that needs the resources to continue to live or other dependents that require help from the person going to the nursing home. We know and understand the nuances and the law and can help families protect assets and provide for loved ones.
Most nursing home residents, at some point, apply for Long Term Care Medicaid. Be aware that a mountain of paperwork will have to be supplied to the Medicaid office prior to their determination of whether the Applicant actually qualifies. There is a lengthy application that must be completed, and additional information must be supplied. If the application is not complete or the proper supporting paperwork is not supplied it and cost you another month of private pay – typically $5,000.00 in Arkansas. The following is a list of the kinds of things that must be supplied when applying for Medicaid:
- Important Papers – proof of marriage; Copy of legal documents to show power of attorney or legal guardianship; probate documents from predeceased spouse;
- Income Verification – Proof of income such as the 1099 from the previous tax year; documentation showing gross income from retirement, pension, Veteran’s Benefits, annuities, mineral rights, reverse mortgages, proof of rental income received, statements from friends or relatives who give money to the applicant or their spouse, and royalties for the applicant and their spouse;
- Financial Means – Proof of any lump sum payments you received in the last three years from an insurance or lawsuit settlement, inheritance or social security; all pages of your and your spouse’s bank statements showing check images, account numbers, and all deposits and withdrawals; copy of annuity and last statement; last statement for CDs, IRAs, 401(k)s and retirement accounts (for applicant and spouse);
- Investments – copy of stocks and bonds, including account statements for both applicant and spouse.
- Real estate – proof to show the value of non-home real estate. Your home and the property attached to it is not a countable resource.
This is a partial list of the information to be supplied with the application. It is important to note that the application provides that if you purposely give information that is not true or if you purposely do not tell information that you are supposed to, you can by law be punished for fraud.
Don’t ever put your family in a position where they must lie on a Medicaid application. If you want to protect your assets from nursing home poverty, plan ahead and take advantage of legal strategies available to protect yourself from a financial disaster.
The Takeaway: plan ahead – the best bet is to structure your estate properly at least five years prior to entering a nursing facility. Contact Us if you have any questions, 501.891.6000.