Page 37 - Amarillo Senior Link Magazine 2020 Spring - Online Magazine

advance of need, the company may work more
readily with the agent when the time comes.

Don’ts (without the advice of a knowledgeable
attorney)

Anticipating the need for Medicaid, a
homeowner responding to some particularly
bad advice may convey his or her home to a
child. Several problems then arise: 1) Medicaid
penalizes the gift, 2) the homeowner loses
property tax advantages (homestead, over 65,
etc.), and 3) when the child sells the house, he
or she may incur significant capital gains taxes.
Conveying the home and reserving only a life
estate solves the second and third problems, but
the interest conveyed, the remainder, can result
in a lesser but still painful Medicaid penalty.
Similar bad advice may suggest to a potential
Medicaid applicant that “Medicaid will take
everything” and that he or she should “get
everything out of your name.” Making gifts
to become eligible may play a role in Medicaid
planning, but making the gifts of cash or other
property without effective advice likely will
create problems with Medicaid.
In almost all cases, a married person whose
spouse remains at home or otherwise in the
community, assisted living, for example, should
not apply for Medicaid without consulting
with a knowledgeable attorney first. In fact,
if possible, the consultation should take place
before the person’s admission to long term
care, during rehab, for example. Very few
people understand the Medicaid planning
opportunities available to the couple when one
spouse lives in the community.
For persons over 70 1/2 years old, Medicaid does
not apply most IRA’s against their countable
resources. This means that a person should not
spend down an IRA to get below the countable
resource limit, but beware, Medicaid treats the
Required Minimum Distributions as income,
which may be added to the person’s monthly
co-pay even though many people draw their
RMD’s only once a year.

Finally, do not accept without legal consultation
the phrase, “You make too much income to
qualify for Medicaid.”

Amarillo Senior Link 37