[WSBAPT] Trusts to Protect assets from Medicaid liens

[Jim Doran]

Those are substantive comments Amy.  Thank you.

Please attach the Q & A form.  That would be helpful for me to get abetter
understanding of this topic.

Jim

James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com
www.doranlegal.com

On Wed, Nov 18, 2015 at 1:35 PM, Lewis, Amy C. <ALewis at eisenhowerlaw.com>
wrote:

> Jim,
>
>
>
>                 I would add a couple of clarifications to your points
> below.  The $2,000 asset limit for Medicaid qualification is applicable
> only to a single individual or to each member of a couple if they are both
> applying for Medicaid.  If only one spouse is applying for Medicaid, the
> spouse not applying can have a minimum of $54,726 in “non-exempt assets.”
> This amount can be increased in some circumstances, with a maximum of
> $119,200.  I have attached “Questions and Answers on Medicaid for Nursing
> Home Residents,” which has more information on this.
>
>
>
>                 It’s not necessarily the case that Medicaid funded care is
> in a less attractive facility, but it may depend on timing.  Many of the
> higher end facilities will accept Medicaid payment, but not if you enter
> the facility as a Medicaid recipient on day 1.  Many of the better
> facilities require that you be able to self-pay for 1-2 years at the higher
> private pay rate before switching to Medicaid.
>
>
>
>                 I agree with the comments of others that you should
> consider partnering with someone who regularly practices in the Medicaid
> context.
>
>
>
> Amy C. Lewis, Attorney
>
> ESTATE PLANNING & PROBATE
>
> 1200 Wells Fargo Plaza | 1201 Pacific Avenue | Tacoma, WA 98402
> phone 253.572.4500 | fax 253.272.5732 | www.eisenhowerlaw.com
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:
> wsbapt-bounces at lists.wsbarppt.com] *On Behalf Of *Jim Doran
> *Sent:* Wednesday, November 18, 2015 1:10 PM
> *To:* Real Property Section
> *Subject:* [WSBAPT] Trusts to Protect assets from Medicaid liens
>
>
>
> Hello Interested Listmates:
>
> I appreciate the responses to the email questions I had about setting up a
> Trust to protect a clients' assets from the medicaid lien possibility.
> Here are my deductions from the responses.  Please tell me if I am missing
> something.
>
> First, the use of an irrevocable trust would be necessary.  That means the
> clients, trustors, would have to essentially divest their personal interest
> in the assets.  They could not "change their minds" or demand funds from
> the Trust or that an asset be sold and the income given to them.
>
> Second, if I recall right, a person can only have $2,000 in their bank
> account in order to qualify for Medicaid.  That would mean setting it all
> up pretty close to the bone.  And, let's say that a trust allowed for the
> Trustee to make small and incremental expenditures for the benefit of the
> trustors.  The trustors would want to keep a bank balance under $2,000
> which would mean pestering the Trustee for assistance.  the assistance
> would be at the discretion of the Trustee.    This could become quite a
> burden for the Trustee.  Additionally, who would be the Trustee is an
> important question.  Whoever it is will essentially have control of all of
> the assets put in the Trust.
>
> Third, do the clients really expect to use Medicaid? The State approved
> long term care providers are at the low end of the quality spectrum.  The
> statistics show that most people do not need long term care and that those
> who do usually need it for about 90 days.  These are statistics so they are
> not solid.
>
> Fourth, (I am not clear on this) the home is not subjected to the Medicaid
> lien while there is a spouse living in the home.  Therefore this Medicaid
> lien is only a concern upon the illness of the surviving spouse.
>
> Fifth, the clients may very well want to sell a property or liquidate an
> investment for their own enjoyment of life and they cannot do that with the
> assets in the irrevocable trust.  Again, to expect a Trustee to sell an
> asset and dole out some funds or good tot eh trustors on a monthly basis is
> not realistic.
>
> Finally, there are some tax consequences of having the assets in the
> Trust.  I do not know what these are and would leave that to a tax
> accountant.
>
> My conclusion is that an Irrevocable Trust to protect assets from the
> Medicaid lien is not appropriate if the clients have substantial assets
> inreal estate and financial investments, especially of they have investment
> income every month that they are living on.  It may be appropriate if a
> client has very little assets, such as their own home, and only social
> security and a small pension to live on month to month that will keep them
> below the $2,000 per person minimum to qualify for Medicaid.
>
> Did I get this right?
>
> Jim Doran
>
>
>
> James R. Doran
>
> Attorney at Law
>
> 100 E. Pine Street -  Suite 205
>
> Bellingham, WA 98225
> (360)393-9506
>
> jim at doranlegal.com
>
> www.doranlegal.com
>
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