Elder Care and Special Needs Planning Report

I. Recent Changes in Medicaid Eligibility Limits: Of Interest to Family Members and Nursing Home Admissions Personnel

Medicaid eligibility is limited to those persons whose gross countable income is at or below the “Income Cap,” an amount that changes in January each year. The Income Cap is set at 300% of the maximum SSI payment rate (the “SSI rate” or “Federal Benefit Rate” (“FBR”)). On January 1, 2009, the FBR became $674.00 per month, so the new Income Cap is $2,022.00 up from $1,911.00 for 2008.

Any Medicaid applicant whose gross income is above $2,022.00 will need to establish a Qualified Income Trust (“QIT” or “Miller” trust) and set up and fund a Trust bank account sometime during the calendar month that Medicaid eligibility is needed. Only the income received each month can be placed into the account. Determining gross countable income can be tricky without good information about the types of income received and the deductions being taken by payors. For example, some Veterans’ benefits are countable, but Aid and Attendance is not.

If you have any questions about establishment of the Qualified Income Trust, or have a client or loved one who needs to set up a Qualified Income Trust to be eligible for Medicaid, call my office to set up a meeting. At the meeting, I will answer questions about Medicaid eligibility and set up the Qualified Income Trust. In the meeting, I guide you through the details of how the trust works and the establishment and funding of the trust account.

Often a Medicaid applicant who needs a QIT also has other Medicaid-related issues that require counseling and planning. Such planning is best done with the help of an experienced elder law attorney. I am certified as an elder law specialist by the Tennessee Commission on CLE and Specialization. I can help the family work through the Medicaid eligibility issues and planning options when they come in to set up the Qualified Income Trust, which can save months of delay in qualification for Medicaid.

II. Married Medicaid Applicants Should Consult an Elder Law Attorney Early

Medicaid rules permit spouses of institutionalized Medicaid recipients to protect substantial amounts of the couple’s assets, including over $109,560 in cash assets for 2009. Advance planning is essential to protect the rights the family has under Tennessee and federal law. Many families of nursing home residents continue to use up their assets on private pay of nursing home expenses without doing any planning to protect assets for the spouse living at home. Nursing home administrators and family friends should urge the family of nursing home residents, or those who might need nursing home care in the future, to contact an experienced elder law attorney for an in-depth consultation for advance planning to preserve family assets. We find that in most cases our recommendations can protect significant amounts of assets, much more than the cost of the planning.

III. Disabled Persons Can Protect Assets while Qualifying for Medicaid

Most people do not realize that it is not always necessary to use up all a disabled person’s assets before he or she can qualify for Medicaid assistance. While normally a Medicaid applicant must spend down his resources to no more than $2,000 before becoming eligible for Medicaid, with proper planning, a disabled person under 65 years of age can protect assets in a special needs trust (SNT), with the assets being used to pay for supplemental needs of the disabled individual that are not being paid by SSI or Medicaid.

Whether the individual is in a nursing home or not, assets can be held in the SNT for the disabled person’s benefit. These protected assets could be savings or investments of the disabled person who is not eligible for Medicaid. Or the assets might be an inheritance or a settlement in a lawsuit received by someone who is already receiving Medicaid assistance and is in danger of losing Medicaid coverage because of the new assets. Planning for these trusts requires an attorney who is experienced in Special Needs Trust Law as well as Medicaid and Social Security rules. William King Self, Jr. is able to help with planning for special needs trusts, and individuals and their families are urged to call to set up a consultation.

Please Note:

William King Self, Jr., is a member of Apperson, Crump & Maxwell, PLC, law firm. He is a Certified Elder Law Attorney (CELA) as determined by the National Elder Law Foundation and is certified as an Elder Law Specialist by the Tennessee Commission on CLE & Specialization. Certifications of Specialization are available to Tennessee lawyers in areas of practice relating to or included in the areas of Elder Law and Estate Planning. Listing of related or included practice areas herein other than Elder Law does not constitute or imply a representation of certification of specialization under Tennessee law.

The Special Needs Alliance is a national not-for-profit association whose membership is limited to experienced attorneys who concentrate a significant portion of their practice in special needs planning for clients with disabilities, and their families. There is presently no nationally recognized certification of specialization in special needs planning, and membership in the Special Needs Alliance does not imply such a level of specialization. For more information, visit www.specialneedsalliance.org.

The materials found in this Newsletter are intended strictly as educational information about elder law and special needs planning subjects and should not be construed as legal advice. Each person's situation is unique and requires specific evaluation before advice can be given. Consult a reputable and competent elder law or special needs planning attorney regarding your own needs.