Ask Jaleh: Estate Planning Considerations after Medicaid approval.


Video Summary


Estate planning considerations after Medicaid approval.

The legal counsel of your elder law attorney does not end with the Medicaid approval notice. Discussions follow by planning measures should be considered by the single Medicaid applicant as well as the community spouse.

For the single Medicaid applicant family members are generally desirous and have exempt assets inheritable by operation of law. Well, what exactly does this mean?

For example, avoiding probate on the exempt homestead property may be advantageous under many circumstances. After evaluating the family’s dynamics and discussing the pros and cons, an Enhanced Life Estate Deed, also commonly referred to as a Lady Bird Deed may be a suitable planning technique for avoiding probate for real estate owned by the single Medicaid applicant.

In addition, simple convenience measures may be undertaken such as adding the beneficiary to certain designated countable assets such as bank accounts. If your power of attorney is necessary to perform these functions then you must be aware of the changes brought about by the Florida Power of Attorney Act which was effective October 1, 2011.

This is crucial because authority such as the ability to create a survivorship or beneficiary designation must have been expressed in the power of attorney created prior to October 1, 2011.
Furthermore, they must also be specifically enumerated and initialed and powers of attorney’s created after or on October 1, 2011.

In addition to the applicable items previously mentioned, planning for the community spouse and the objective of protecting against future disruption in Medicaid eligibility takes on a level of immediate need and importance.

Once of the first considerations is to ensure that the community spouse completes the asset transfers necessary to conform to the asset criteria for him or her and the institutionalized spouse long before recertification.

In addition, the community spouse should review all beneficiary designations on IRAs and change life insurance policies to ensure that the institutionalized spouse is not the beneficiary of same just in case a community spouse should pass away prior to the death of the institutionalized spouse.

In most cases the community spouse will usually require new estate planning documents because she or he may have named the ill spouse as the primary actor throughout these documents.
It must also be addressed in the estate planning documents that the community spouse may predecease the ill spouse and assets received in any self-settled trust whether it enter via those trust or a living trust will not be protected.

Consequently, a third party trust may need to be created under the community spouse’s last will and testament which will likely include many of the terms and conditions for a qualifying special needs trust and that sort of treatment.

It is also important to have the community spouse consult with an insurance agent regarding the affordability and insurability of a long term care insurance policy to see if this may be a viable planning tool for the future just in case the event does occur that the community spouse will require institutional care.

It is also important to note that Medicaid recovery efforts are governed by Florida Statue 409.910. As a generalization, recovery efforts are predominantly encountered when assets of the deceased Medicaid recipient pass through a probate proceeding.

Recovery is not warranted if the Medicaid recipient is survived by either a spouse, a minor child or an adult disabled child.

If you have any questions regarding a state planning consideration and the interplay with the Medicaid application process and approval, I would love to assist you. Please give us a call here at Waller and Mitchell at 727-847-2288.