When Veteran’s Benefits and Medicaid Planning Collide

There are very specific rules you must follow in order to qualify your loved one for nursing home Medicaid benefits. Some of these rules can have very severe consequences if you do not follow them. The best example of these rules are the ones governing penalties for transfers of assets during the Medicaid look back period. In the course of attempting to secure all available assistance for your loved one you may be looking at veteran’s benefits. If your loved one is already eligible for Veteran’s Benefits right now, then that is great; but if someone is telling you to make transfers or gifts with your loved one’s assets in order to create eligibility for Veteran’s Benefits then you need to know there is one big issue where the rules for Veteran’s Benefits and Medicaid eligibility collide – transfers.

Gifts and transfers of assets

The eligibility rules for veteran’s benefits do not have the strict framework that the eligibility rules for Texas nursing home Medicaid have. In many cases, a family attempting to obtain veteran’s benefits for a loved one will be advised by a veteran’s benefit planner (usually an individual not licensed to practice law or provide legal advice) to either make a gift or possibly create a trust with the purpose of reducing the amount of assets that are considered in the application for veteran’s benefits. When done properly, that strategy can and does work for veteran’s benefits, but it can lead to disaster if you are also planning on applying for Medicaid benefits within five years after the transfer.

The reason is simple, the Texas nursing home Medicaid rules impose a penalty for gifts or transfers to trusts that do not meet very specific criteria whereas the Veteran’s Benefits regulations do not currently impose a penalty. So you may be able to obtain a few hundred or even a couple thousand dollars each month in Veteran’s Benefits with a Medicaid disqualifying transfer, but in order to be fully informed you need to be aware that in the process of doing so you may be sacrificing Medicaid benefits worth more than what you obtained from the VA.

Think twice before sacrificing what may be critical nursing home Medicaid benefits just to obtain a Veteran’s benefit.  It may end up costing you more in the end. If you need to help a loved one qualify for Texas Medicaid and would like to do it right the first time with an experienced Woodlands Medicaid Attorney then give me a call at (832) 592-7913 and we can discuss your case. You might be surprised at how much of a difference an experienced Medicaid asset protection attorney can make.

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