Profile #23 | Widow | $48k In Assets | Anticipating Long Term Care Needs
This client was a widow, with two adult children and medical condition with prescription costs in excess of $500.00 per month. She had approximately $50,000.00 in the bank and received about $1,400.00 in social security a month for her monthly living expenses. She was concerned she would not qualify for Medicaid when the time came that her family was no longer to supplement her living expenses due to her increasing medical needs.
I provided her a plan to qualify for Medicaid when the time came through use of a Personal Services Contract. Using a Personal Services Contract, she entered into an agreement with her daughter that lived nearby to provide care for her at a fair market rate. Under the terms of the contract the amounts for services would be called due in the future in a lump sum amount. The amounts paid to daughter under the Personal Services Contract is a permissible transfer under the Medicaid rules and would not subject the client to a penalty period for gifting during Medicaid’s five-year look back period.
Not everybody requires an irrevocable trust to qualify for Medicaid and this Profile highlights that.
