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Helping Families Balance Medicaid And Estate Planning

Medicaid can cover the cost of medical care for certain low-income individuals. People who need Medicaid often think they need to forfeit all or most of their assets in order to qualify for this program, and that Medicaid will prevent them from passing on assets to their loved ones. This is not the case: however, careful estate planning is essential if you wish to legally protect assets for your heirs while receiving the medical support you need.

How Do I Qualify For Medicaid?

Certain residents of Tennessee with limited income and resources can qualify for TennCare – the state of Tennessee’s Medicaid program.

To be eligible for TennCare, you must fall into one of the following categories:

  • Children (under the age of 21) or elderly individuals (over the age of 65)
  • Parents or caretakers of dependent children
  • Pregnant women
  • Individuals receiving treatment from breast or cervical cancer
  • Individuals with a disability, or who receive continuous care from a live-in medical institution (such as a nursing home)
  • Individuals who receive Supplemental Security Income (SSI checks)

You must also earn no more than a certain amount of monthly income and own no more than a certain value of assets (such as bank accounts, vehicles, or property). The value of resources you can own and monthly income you can earn and still qualify for TennCare is determined by which of the above categories you fall into.

How Do I Protect My Assets If I Need Medicaid?

If you need Medicaid, you must bring the value of your assets below TennCare’s eligibility limit. This entails “spending down” assets over the eligibility limit by paying off debt, financing medical care, or even paying for a vacation.

However, “spending down” your assets prevents them from being passed to your heirs. Moreover, if you receive Medicaid, TennCare can attempt to reimburse itself for the cost of your Medicaid coverage after your death through its estate recovery program – which can result in TennCare seizing remaining assets (for example, your home) which might otherwise be passed to your heirs.

You cannot simply transfer or sell your assets to your loved ones to qualify for TennCare. TennCare will closely examine all gifts, transfers, or sales for less than fair market value you have made in the 60 months (five years) before you apply for Medicaid. Asset gifts or discounted sales during this “look-back period” can disqualify you for Medicaid. If you believe you may need Medicaid, even in the distant future, you should therefore consult an attorney now to discuss options for asset transfers.

A Proactive Plan Is Essential

At JLCarey & Associates, PLLC, attorney JennyLynn Carey can help you navigate the extremely complicated process of protecting your assets for your heirs and loved ones, even as you seek to meet TennCare’s eligibility requirements. A well-tailored estate plan can protect your home from an estate recovery program after your death, and can help you avoid penalties or disqualification for violating the look-back period. These plans must be made carefully and proactively.

For compassionate, comprehensive guidance, contact JennyLynn Carey today. She will help you understand your options, and create a strategy that safeguards your health and your family’s financial well-being. For a free consultation, schedule a meeting using this online form.