Elder Care Attorneys, Medicaid Lawyers and the Medicaid Planning Process

Elder Law Attorneys, also called Elder Care Attorneys, Estate and Trust Attorneys, or Medicaid Lawyers, assist persons in preparing for long-term care and death. They assist seniors in a large and diverse array of legal tasks. This encompasses retirement planning, estate planning, creating wills and durable power of attorney, appointing guardianship, creating trusts, and in some cases, Medicaid planning and appeals.

Not all Elder Law Attorneys provide Medicaid planning services, and not all Medicaid Planners are Elder Law Attorneys. It is important to find a lawyer or professional non-attorney Medicaid Planner that specializes in this area and is familiar with state law.

What Medicaid Attorneys Do?

Medicaid Attorneys play a large role in the Medicaid application process and planning for Medicaid eligibility.

Medicaid Application Assistance

Medicaid Lawyers, first and foremost, are able to assist Medicaid applicants with the application process. This might include completing the paperwork, providing supporting documentation, and filing the application. While this process can be labor intensive and complicated, in most states it is not required that the person providing assistance be an attorney. For this task, a professional Medicaid Planner might be better suited, as it is generally more affordable than hiring an attorney. Learn about the various types of Medicaid Planners here.

Assist in Meeting Income and Asset Limits

Applying for Medicaid becomes more complicated when an applicant is over Medicaid’s income and / or asset limit(s). All states set financial eligibility requirements, limiting the amount of income and assets that an applicant can have to be eligible for Medicaid. See eligibility requirements by state. Being over the income and / or asset limit(s) does not mean that one cannot become eligible for Medicaid. However, planning techniques to lower one’s countable income and / or assets are required. This is where a Medicaid Attorney or Specialist Medicaid Planner becomes invaluable.

Advanced Planning, While Ideal, Is Not Required
Medicaid planning is best done well in advance of the need for care, particularly if one has assets valued over $50,000. This is because Medicaid has a 60-month Look Back Period. California Medicaid (Med-Cal) is an exception with a more lenient look back period of 30 months. During the “Look Back”, an applicant cannot gift assets or sell them for less than fair market value. If this has been done, the Medicaid agency assumes it was to meet Medicaid’s asset limit. Violating this rules results in a Penalty Period of Medicaid ineligibility for the applicant.

Implement Strategies for Protecting Income and Assets

Executing planning techniques for Medicaid eligibility with the intention of missing the Look-Back Period is ideal for healthy seniors. One such strategy that Elder Law Attorneys can implement is a Medicaid Asset Protection Trust (MAPT). If implemented prior to the Look-Back Period, the Penalty Period for gifting assets is avoided, and the trust protects assets for non-Medicaid spouses to ensure they can live independently. Furthermore, MAPTs protect assets, including one’s home, for relatives upon the death of the Medicaid recipient, as assets in this type of trust are protected from Medicaid’s Estate Recovery Program. This means that the state cannot attempt to be reimbursed for long-term care costs for which it paid for the Medicaid beneficiary via these assets.

Another planning strategy, which is not implemented with the intention of missing the Look-Back Period, is the Modern Half a Loaf. This strategy reduces one’s countable assets, while at the same time, protecting some of them for family. Essentially, Medicaid applicants gift approximately half of their “excess” assets (assets over Medicaid’s limit) to their loved ones and then purchase an annuity with the remaining “excess” assets. An annuity turns countable assets into an income stream. While the applicant will be penalized for violating the Look-Back Period, the income from the annuity can pay for the cost of long-term care during the Penalty Period.

Medicaid Attorneys and Specialists also assist with crisis planning, which occurs when a senior needs Medicaid benefits within 30-60 days. An option to meet the income limit might be a Miller Trust, often called a Qualified Income Trust (QIT). Over simplified, income that is over Medicaid’s income limit is put into an irrevocable (meaning it cannot be changed or cancelled) trust to be used for very specific purposes. For instance, the medical and long-term care costs of the Medicaid recipient. The income deposited in the QIT does not count towards Medicaid’s income limit. Not all states allow QITs.

Maximizing Income and Assets for a Healthy Spouse

For married couples in which just one spouse is applying for Nursing Home Medicaid or a home and community based services Medicaid Waiver, there are Spousal Impoverishment Rules in place. These are intended to prevent the healthy spouse, also called a well spouse or community spouse, from having too little from which to live. Medicaid attorneys help married couples to maximize the Community Spouse Resource Allowance (the amount of assets the non-Medicaid applicant spouse is able to retain of the couples’ assets) and the Monthly Maintenance Needs Allowance (monthly income that can be transferred from the applicant spouse to the non-applicant spouse).

What Medicaid Attorneys Don’t Do?

While we discussed the Medicaid planning tasks Medicaid Attorneys do, it is also important to cover the tasks they don’t usually do. One planning strategy that is used to lower one’s countable assets is to purchase an Immediate Annuity with an insurance company. An annuity takes a lump sum of cash and converts it into an income stream, generally for an applicant’s non-applicant spouse. To sell annuities, one must have a license to sell insurance, and in most cases, Medicaid Attorneys are not also licensed insurance sales persons.

Medicaid Attorneys generally do not sell Irrevocable Funeral Expense Trusts. However, they can do so through a partnership with a licensed insurance sales agent. This type of trust is a legal contract between the Medicaid recipient and an insurance company. It provides a way for one to “spend down” extra assets, while also setting money aside for future funeral / burial costs. As long as the amount of the funeral trust is under the limit for the state in which the Medicaid recipient lives, it is not counted towards Medicaid’s asset limit.

Is Medicaid Planning Legal?

Yes, Medicaid planning is legal in all 50 states and the District of Columbia. However, who can provide Medicaid planning assistance depends on the state and what types of planning services are offered. According to federal rules, Medicaid applicants can receive assistance with completing and reviewing their Medicaid application, gathering documentation, and submitting their application from anyone they choose. They can also hire the person of their choosing to represent them in the case of an appeal for denial of benefits.

It is, however, illegal for persons who are not attorneys to practice law, or in other words, provide legal advice. The “unauthorized practice of law” related to Medicaid planning activities is a grey area. This is because the definition varies based on the state. Furthermore, some states extensively define it, which others do not clearly define it.

Florida, Michigan, New Jersey, Ohio, Tennessee, and Texas are six states that provide a clear (or pretty clear) definition of the unauthorized practice of law. These states prohibit non-attorneys from doing some Medicaid planning activities. Essentially, a non-attorney Medicaid Specialist cannot provide legal advice on Medicaid planning strategies to meet financial eligibility criteria. As an example, in FL, a non-attorney cannot establish a need, develop a plan, and / or implement Medicaid planning strategies for a client to become income and / or asset eligible. In the abovementioned states, non-attorney Medicaid Specialists often partner with attorneys to provide legal advice and services. Furthermore, since the unauthorized practice of law can be such a grey area, it is becoming increasingly common for non-attorney Medicaid Specialists to work with an attorney in more and more states.

Is a Lawyer Needed to get Medicaid?

The short and simple answer is no, a lawyer is not needed to get Medicaid. However, based on one’s marital status, financial holdings, and complexity of other relevant factors, it may be best to hire an attorney who specializes in Medicaid in the state in which one resides. As covered above, it is illegal for non-attorneys to do some aspects of Medicaid planning. However, another option is to hire a Professional Medicaid Planner, also called a Medicaid Specialist or a Medicaid Advisor, who partners with an attorney. For persons who have Medicaid cases that are fairly simple and straightforward, a Medicaid Planner might be a good option.

Working with a Professional Medicaid Planner, or one who partners with a Medicaid Attorney, can be a lot more cost efficient than working solely with a Medicaid Attorney. In addition, Medicaid Planners might be better suited for certain tasks, such as providing assistance with filling out the application, gathering supportive documentation, submitting and following up on the application process, and saving money for the Medicaid applicant or the Medicaid applicant’s healthy spouse. This is because these tasks are generally the focal point for Medicaid Planners. On the other hand, Medicaid Attorneys often focus more on the legal aspects of Medicaid planning, such as creating Medicaid Asset Protection Trusts or Qualified Income Trusts, which makes them the better option for this type of assistance.

Find a professional Medicaid planner in your area here.

Cost of Elder Law Attorneys and Medicaid Planning

There isn’t a clear-cut answer as to the cost of hiring an Elder Care Attorney for Medicaid planning purposes. Some Medicaid Lawyers offer free consultations, while others charge an initial consultation fee or offer Medicaid planning conferences that range in cost from approximately $175 – $500. After the consultation / planning conference and gathering of the facts and needs, a price for services can be quoted. Medicaid planning fees can range from $3,000 to $15,000.The following factors can all impact the cost the cost of a Medicaid planning engagement. The more complicated the case, the higher the fees.

The costs of hiring an Elder Law Attorney or Medicaid Planning Specialist might seem high in the short-term, but in the long-term, seeking assistance can protect many assets that would otherwise not be protected. A Medicaid Expert, whether an attorney or not, can save a Medicaid applicant and their family a lot of money and can be a very wise investment.