Have people been telling you that protecting assets after entering a nursing home is a pipe dream? Are they saying there is no way you can avoid a spend-down? Should you just give up? Well, let me tell you the story of a case I won recently and then you can make up your own mind.
David’s father, John, recently entered Park Manor in The Woodlands as a nursing home resident.
David started getting the bills of $5,100 every month from Park Manor. He recognized his father was about to lose his life savings real quick if he did nothing.
So David started looking for a nursing home Medicaid attorney.
He found me, like you just did. In short order we proceeded to successfully protect two-thirds of his life savings and get him Medicaid approved.
If you want to see how this is possible, keep reading.
What He Started With
Here is what John had when he came to me:
- 3 motor vehicles;
- $37,000 in an IRA;
- Around $94,000 in bank accounts.
This is pretty typical for what people start out with. Your family may be in a similar situation.
A $125,000 Problem
If you have been doing your research, then you can already spot the problem he had. His problem was the Medicaid asset limit. His Medicaid eligibility limit for assets was $2,000, but he had assets worth over $125,000. If he did nothing, he was going to lose all but $2,000 to the nursing home Medicaid spend-down. That’s a $125,000 problem.
An $80,000 Solution
He had more than $125,000 of assets he was going to lose. How could we possibly avoid this horrible financial devastation and protect his life savings from the Medicaid spend-down? He is already in a nursing home and in the look-back period so there is no hope, right?
Well, here is what we did to save him $80,000.
First, I gave him the option of protecting the entire IRA. We could accomplish that by changing it from its unprotected form into a new form that would not count against him for Medicaid. That would have saved him $37,000 right there with zero tax cost. However, he chose to liquidate the IRA instead and pay the taxes. We still protected a portion of the IRA, but we could not protect the whole thing once he decided to liquidate it.
Second was the vehicles. He wanted some family members to receive the motor vehicles he had. In order to achieve this goal we transferred title to those family members. This caused a penalty, which I will get into later.
Last was the extra cash. Remember, everything over $2,000 he was going to lose to the Medicaid spend-down. That left him with $125,000 in excess at risk assets after he liquidated his IRA.
So here is what I did with the assets he would not be able to keep anyway. He gave some of it to his children rather than lose everything to the nursing home bills. The cash gifts were a little more than $81,000. Unfortunately with his facts we could not protect more than that, but it is still a lot better than losing the $81,000 don’t you think?
“But Rich, what about those Medicaid penalties you keep warning us about?”
That’s a great question. Medicaid penalties are no joke for the inexperienced. However, I have been solving Medicaid issues for over 18 years now. I know some tricks. I know what works. And more importantly, I know what doesn’t work.
There was absolutely a Medicaid penalty in this case. The key to success is knowing how to handle the penalty in the most efficient way possible. We used the rest of his assets to deal with the penalty.
That does not mean he kept the $40,000+ in his bank account. That’s a rookie move. It would not even start the penalty running and would be a huge mistake. Don’t do that.
He Saves $3,000 Every Month
When he first came to me, this hard working man was losing a lot of money. An obscene amount of money actually. He was paying Park Manor in The Woodlands over $5,100. Every. Single. Month.
At the end of his case, I got his nursing home bill down to around $2,100. That amount is exactly what he could afford with his income. He is no longer losing money at $5,100 a clip, he now breaks even and his kids don’t have to worry about chipping in.
Compared to before he hired me, he now saves more than $3,000 every month. In the first year alone he is saving $36,000. As you can imagine, that is a huge relief for everyone involved.
He Protected Over $80,000 From the Medicaid Spend-Down
At the start of this case John was on the road to losing over $120,000. Basically his entire life savings. He would leave nothing for his kids except maybe $2,000 or less.
At the end of his case, I protected over $80,000. That is about 2/3 of his life savings. I cut his spend-down to $43,000 which is a lot better than the $120,000 spend-down he started with before me.
What About The Look-Back Period?
That’s another great question. We did all these transactions while being in the look-back period. The HHSC reviewed and scrutinized everything we did. And you know what? We won, easily. Why? Because everything we did is well within the rules and I know what I’m doing.
Do You Want to Avoid the Medicaid Spend-Down?
As you can see, with the right attorney people are beating the nursing home Medicaid spend-down every day in The Woodlands and Houston. If you want to be part of that group, then contact me today to get started. This family saved $80,000 or two-thirds of their assets, what can we do for your family?