Q:  In order to qualify for Medicaid for long-term care, don't I have to spend all my money on nursing home care in order to reach the $2,000 asset limit?

A:  No.  You do not have to spend your money on nursing home care in order to qualify for Medicaid coverage of long-term care services.  When you apply for Medicaid, you cannot have countable assets in excess of $2,000.  Therefore, the goal of Nursing Home and Asset Protection Planning is not to impoverish you; instead, the goal is to convert your countable assets into non-countable assets before you apply for Medicaid.

Q: Won't Medicaid make me sell my home to qualify for long-term care/nursing home coverage?

A:  No.  Medicaid will never make you sell your home in order to qualify.  In fact, when you apply for Medicaid, your home is exempt so long as your equity in your home is under $552,000 (as of 2015).  Medicaid can attempt to recover the money it spent on your care from your probate estate after you pass away through "Medicaid Estate Recovery." Medicaid Estate Recovery can place a lien on your home if your home passes through your estate.  Thus, when your heirs sell your home, the Medicaid lien will have to be paid from the sale proceeds.  There are ways to keep Medicaid Estate Recovery from reaching your home.

Q:  How do I avoid Medicaid Estate Recovery?

A:  In West Virginia, Medicaid Estate Recovery is limited to your "probate estate" (i.e., the assets that pass by your will, or by law if you have no will).  There are several ways to ensure that your home passes outside of your probate estate including transfer-on-death deeds, irrevocable trusts and life estate deeds.

Q:  I think that I will be needing long-term care within the next year or so.  Should I give my house to my children and reserve a life estate?

A:  No.  Medicaid will impose a "penalty period" if there are any uncompensated transfers within five years prior to making the application for Medicaid for long-term care.  The penalty period is based on the value of the uncompensated transfer, and means that you will have to pay the nursing home's private pay rate for the length of the period.  Re-titling your home or any other property without receiving adequate compensation will trigger such a penalty period.  The best alternative is to execute a transfer on death deed.  Such a deed will not trigger a penalty period because there are no current interests transferred.  Furthermore, a transfer on death deed will take your home outside of your probate estate, and out of the reach of Medicaid Estate Recovery.

Q:  I am worried that my bills won't get paid if I end up in the hospital.  Should I add my son to my bank account so that he can pay the bills if something happens to me?

A:  No.  Adding your son to your bank account can cause problems if you need to apply for Medicaid to cover the costs of nursing home care.  Medicaid may view this as an uncompensated transfer of at least some of the funds in your bank account, thus triggering a penalty period.  Further, you are creating a survivorship account with your son.  This means that, when you die, your son will be the sole owner of the bank account, and none of your other children will be entitled to any of the money from that account.  The best way to make sure your bills are paid if something happens to you is to execute a general durable power of attorney.  The bank will let you add your son to the account as your power of attorney.  Medicaid will not view this as an uncompensated transfer. Further, as soon as you pass away, the power of attorney is void and your bank account will be passed on to all of your children.

Q:  Will all of my social security and pension income have to go to the nursing home if I apply for Medicaid?  What about my wife?

A:  Generally, yes.  When you are approved for Medicaid, you will have to contribute your income towards the cost of nursing home care.  Medicaid will then make up the difference.  However, if your wife's income is below $1,967 per month, part of your monthly social security and retirement income can be allocated to her in order to ensure that she receives at least $1,967 per month.  In some cases, it is possible to transfer even more of your income to your spouse.