Protecting Your Assets from Probate and Long-Term Care by Evan H. Farr

Author:Evan H. Farr
Language: eng
Format: epub
Publisher: Allworth Press
Published: 2017-03-17T04:00:00+00:00

CHAPTER 16

WHY MEDICAID PLANNING IS ETHICAL

Medicaid asset protection is absolutely ethical and moral; in fact, it is the “right” thing to do if a family is concerned about the long-term care of a loved one. From a moral and ethical standpoint, Medicaid planning is no different from income tax planning and estate planning.

MEDICAID PLANNING IS JUST LIKE INCOME TAX PLANNING

Income tax planning involves trying to find all of the proper and legal deductions, credits, and other tax savings that you are entitled to—taking maximum advantage of existing laws. Income tax planning also involves investing in tax-free bonds, retirement plans, or other tax-favored investment vehicles, all in an effort to minimize what you pay in income taxes and maximize the amount of money that remains in your control to be used to benefit you and your family.

MEDICAID PLANNING IS JUST LIKE ESTATE PLANNING

Estate planning involves trying to plan your estate to minimize the amount of estate taxes and probate taxes that your estate will have to pay to the government, again taking maximum advantage of the existing laws. Similarly, Medicaid planning involves trying to find the best methods to transfer, shelter, and protect your assets to get the same benefits of lowering costs and keeping control of your money and benefits.

Like income-tax planning and estate planning, Medicaid planning requires a great deal of extremely complex knowledge due in part to constantly changing laws, so you need to work with an experienced elder law attorney who knows the rules and can advise you properly.

MEDICAID PLANNING IS JUST LIKE LONG-TERM CARE INSURANCE

For seniors over the age of sixty-five, Medicaid has become equivalent to federally subsidized long-term care insurance, just as Medicare is equivalent to federally subsidized health insurance. Congress accepts the realities of Medicaid planning through rules that protect spouses of nursing home residents, allow Medicaid asset protection via the purchase of qualified long-term care insurance policies, allow the exemption of certain types of assets, and permit individuals to qualify even after transferring assets to a spouse or to a disabled family member or to a caregiver child. To plan ahead and accelerate qualification for Medicaid is no different from planning to maximize your income tax deductions to receive the largest income tax refund allowable. It’s no different from taking advantage of tax-free municipal bonds. It’s no different from planning your estate to avoid paying estate taxes.

MEDICAID PLANNING IS JUST LIKE MAGIC

The “magic” that elder law attorneys are able to perform is not based on sleight of hand. Elder law attorneys do not “hide” assets. On the contrary, we provide total disclosure of everything we do to the relevant Medicaid agencies when we file the Medicaid application, as failure to provide full disclosure of all assets and all transfers would be a federal crime. The ways that elder law attorneys are able to shelter and protect assets may seem like “magic” to you, but that’s only because you don’t possess the legal knowledge and experience. It’s the same with magicians—the magic only appears to be “magical” because you don’t know how the trick is done.

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