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How To Protect Your Assets From Medicaid Estate Recovery


A popular saying in the world of estate planning goes that the goal of your estate plan is to ensure that you do not outlive your savings.  In today’s economic climate, where most of us are in debt and those of us who have savings are unlikely to have them much longer, does this mean that you should craft a daredevil bucket list that will enable you to die an interesting death during the narrow window during which your savings account still has a positive balance?  No, and it also doesn’t mean that you will be out on the street if your retirement savings run out while you are still alive.  Medicaid pays for nursing home care and certain other medical services for seniors who are unable to pay for them out of their own assets.  The catch is that, after you die, Medicaid can file a claim for reimbursement from your estate after you die.  An Orlando estate planning lawyer can help you protect your assets from Medicaid estate recovery.

How Medicaid Estate Recovery Works

According to the law, Medicaid is not a freebie.  The government is not really giving you money for healthcare; you are just allowed to continue borrowing for the rest of your life.  After your death, the state can recover as much as possible of the money it spent on your Medicaid benefits from your estates, even if that means persuading the court to order your estate to sell some or all of its assets.  The federal Social Security Act requires that states do this in the case of benefits paid during or after 1993 to people above the age of 55 for any services with the exception of residential nursing care.  This means that, if Medicaid contributed to the cost of your prescription drugs or home health aide care after your 55th birthday, the state can seek reimbursement of these costs from your estate through Medicaid estate recovery.

Some assets are legally protected from Medicaid estate recovery; for example, your life insurance policy will always pay the payout to the intended beneficiary instead of diverting it to Medicaid. Likewise, if your spouse survives you, Medicaid will not try to recover any assets from your estate.  The best ways to keep Medicaid from helping itself to your estate are to own assets jointly with the family members who will eventually inherit them, to place assets in a revocable trust, and to buy long-term care insurance in order to avoid needing to use Medicaid benefits in the first place.  Even if you are currently younger than 55, an estate planning lawyer can help you protect your assets from eventual efforts by Medicaid to claim them.

Contact Gierach and Gierach About Asset Protection

An estate planning lawyer can help you safeguard your assets from Medicaid and creditors during probate, even if your current financial situation requires you to incur debts and claim Medicaid benefits.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.




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