Long Term Care Planning/Asset Protection
Medicaid pays for medical services, including nursing home care, for qualified individuals. In Washington State, a Medicaid program known as COPES will pay for in-home care, or care in an adult family home or assisted living facility.
An individual must be both medically and financially qualified for Medicaid and COPES. Although the eligibility rules for both programs are similar, there are some important differences. The eligibility rules are complicated and change frequently. The Northwest Justice Project maintains an excellent website (www.washingtonlawhelp.org) with current information about Medicaid and COPES eligibility requirements.
To obtain benefits for in-home care, assisted living, or an adult family home through COPES, the applicant’s income must below a specific limit; the income limit for nursing home care is higher. Medicaid and COPES recipients are required to contribute most of their income toward their cost of care; however a portion of the recipient’s income may be used for the living expenses of the non-Medicaid spouse.
Medicaid and COPES recipients may not have more than $2,000 in savings and other non-exempt assets. There is also a limit on the non-exempt assets the applicant’s spouse may own at the time of application; the spousal asset limits differ for COPES and Medicaid. For both programs, certain assets, most notably a home, are exempt and do not count toward the asset limits.
Gifts of property made by the Medicaid/COPES applicant or spouse within 5 years of applying will generally result in a period of ineligibility; however there is no penalty for gifts between spouses. Therefore, it is common for a married couple to transfer all assets into the name of the non-Medicaid spouse (thereby reducing the applicant’s assets below the $2,000 limit), and for the spouse to get below the spousal asset limit through various means, such as purchasing exempt assets. The healthy spouse also commonly executes a new Will to prevent the other spouse from reacquiring assets that would result in a loss of benefits, or to create a Special Needs Trust for the Medicaid/COPES recipient.
Gifts to anyone other than a spouse will result in a period of Medicaid/COPES ineligibility if made within 5 years of applying; this includes transfers to any trust other than a Special Needs Trust. In extremely limited circumstances, it may be possible to transfer the applicant’s interest in a home without penalty to a caregiver child or to a sibling who already co-owns the home.
If you are concerned about the cost of long term care for yourself or a loved one, we can assist with formulating a plan to preserve assets to the greatest extent possible. To schedule an appointment, call us at (425) 455-5513, toll free at (877) 455-5513, or send us an email.