As a Michigan elder law attorney, I hear it all the time: “My uncle told me . . . “ or “My friend’s brother is a lawyer and he said. . .” or “This worked for my grandfather a long time ago, I’m sure it will work now. . .”
Much of what I hear is just plain wrong. This is especially true in the areas of long-term care planning and Medicaid planning. I call these statements “Michigan Medicaid Myths” – popular beliefs that are false or unsupported.
Because there are so many myths out there about elder law and elder care, I decided to put together a series of blogs on the myths of Medicaid planning in Michigan.
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Medicaid Planning Lawyer – Michigan
First, a quick summary of why long-term care planning and Medicaid planning is important to you and your family. Let’s begin with explaining the difference between Medicare and Medicaid. Because of the similar names, many people get these government programs confused.
Medicare is health care insurance for those over 65 (and others in special circumstances) and only provides a limited amount of long-term care coverage (up to one hundred days, but it doesn’t usually last that long). But Medicare is not really intended to cover long-term care (for example, a nursing home stay).
So, after the limited period of Medicare coverage, who pays for long-term care? Three possibilities: (1) long-term care insurance (which few people have); (2) private pay (that’s out of your pocket); or (3) Medicaid (which is the government program to pay for nursing home care).
The average cost of nursing home care in Michigan is $7,032 per month. As much as everyone would like to “private pay” for that care, it is many times not possible, or even if it is possible, it may drain your family’s life savings. What I do as a Michigan elder law lawyer is help you or your loved one get the best possible care, while at the same time assist you with Medicaid planning and asset protection strategies to pay for long-term care and protect assets.
Here is Michigan Medicaid Myth #1. You can expect many more Medicaid Myths over the next several weeks.
“I must give away everything I own to get Medicaid.”
This is absolutely false. You can keep certain property, and many times we can protect most or even all of your assets, and still get you or your spouse qualified for Medicaid in Michigan.
One key is knowing what assets are “countable” and what assets are “non-countable” for Medicaid purposes. And it also helps to know how to turn “countable” assets into “non-countable” assets. Let’s break this down into “basic rules” and “complex rules”.
Here are the basic rules:
- Under the Medicaid rules, you are permitted to own some property and still qualify for Medicaid. For example, you can keep your home (up to $500,000 equity), one vehicle, certain types of funeral contracts and burial plots, limited types of annuities (be careful here, they must be Medicaid “friendly” annuities or they are countable), and your household personal property. So, you don’t need to be totally broke to be eligible for Medicaid in Michigan. BUT – pretty much everything else is countable (bank accounts, CDs, IRAs, 401(k)s, mutual funds, stocks, bonds, etc.).
Here are the complex rules:
- Assets that are countable – bank accounts, CDs, IRAs, etc. – can be turned into non-countable assets with some special strategies. For example, we can do a Medicaid “spend down”. For a single person in a nursing home, there are “gifting strategies” that allow even countable assets (like cash) to be given away (for example, a gift by a mother to her children). For a married person, there is a special type of trust that it not countable for Medicaid purposes, that can protect your entire life savings.
What you should learn from Myth #1 is that:
Stay tuned for Michigan Medicaid Myth #2, coming soon. . .
- You don’t have to make yourself poor to qualify for Medicaid.
- For a single person in a nursing home or about to go into a nursing home, we can most times protect over 50% of his or her life savings, using a combination of spend down and gifting strategies.
- For a married person in a nursing home or about to go into a nursing home, we can protect everything. Yes, I will say that again, we can protect everything.
- For a single or married person who is still healthy, has some extra assets, and is concerned with protecting those assets, we can do pre-planning for long-term care to protect your assets in the event you ever need long-term care.
Glenn Matecun is a Michigan elder law attorney. His law firm regularly handles elder law, elder care, probate court and estate planning matters (Living Trust, Irrevocable Trust, Living Wills, Power of Attorney, Wills, Medicaid law and asset protection), and he works with clients throughout Southeastern Michigan, including clients in Livingston County (including Howell, Brighton, Hartland, Fowlerville and surrounding areas), Macomb County (including Clinton Township, Shelby Township, Sterling Heights, Mt. Clemens and surrounding areas), Wayne County, Ingham County (Lansing) and Washtenaw County (Ann Arbor). To learn more about other legal questions, including the question: “What is elder law?”, go towww.MichiganEstatePlans.com. (Search terms: Michigan elder law lawyer, eldercare, elder care in Michigan, Michigan Medicaid planning, elder abuse, senior abuse, elder attorney, Medicaid rules, senior law, elder lawyers, nursing home attorney, elder laws, elder abuse law, elderlaw).