Budget Commerce Revenue Accounting Assets Concept

Asset Test

To be Medicaid eligible, the applicant is only allowed to have $2,000.00 in countable assets. However, the community spouse is entitled to keep more. All of the married couple’s assets are considered whether they are held jointly or separately.

Some assets may be exempt, such as the primary residence which is usually referred to as the homestead and its contents, a vehicle, prepaid funeral expenses, cemetery lots, term life insurance, whole life insurance whose cash value does not exceed $2,500.00 and certain types of trusts. However, it is important to evaluate each asset carefully before one can know if the asset is considered countable or exempt.

Examples of countable assets are various types of bank accounts, cash, stocks, annuities, bonds, land, minerals, non homestead property, notes receivable, collectibles, boats, and certain extra vehicles. Although most people do not qualify for Medicaid initially, with proper legal guidance, assets can be restructured to pass the Medicaid asset test.

Will I lose all my assets if I go into a nursing facility?

No. there are many ways to preserve assets.

Does an IRA count as a countable asset?

No. If the RMD (required minimum distribution) is set up on an automatic distribution,

then the IRA will not count as an asset. The income stream will be added to the patient’s monthly liability but the IRA will be exempt. The IRA must be paying a regular payment to be excluded.

What if I’m younger than 70½ and not receiving IRA income?

A calculation will need to be determined so a particular dollar amount can be set up automatically and distributed as income during the year.

After asset restructuring and qualifying my husband for Medicaid, will my assets continue to be looked at?

No. When applying for Medicaid for your spouse, you are only required to be below the asset limit at the time of application. In essence, there will be a “snap shot” of your combined assets. After approval, your assets will NOT be looked at again. Your husband will need to remain below $ 2,000 during the year, but you can grow your investments, receive monies from an inheritance or win the lottery and not jeopardize his benefits.

I have a disabled child living in my home, can I give him my assets?

Yes. Medicaid has a very generous policy when there are disabled children (of any age) living in the home requiring financial assistance from their parent(s).

Is my winter home in another state considered a countable asset?

Yes. Any parcels of land, second homes, or investment property count as assets. There are allowable guidelines set fourth by Medicaid to permit extra properties to be temporary or permanently excluded as a countable asset.

My father has a second home that is rented, Will the home count as an available asset if he should go into a nursing facility?

No. As long as it is rented for fair market value, the rental property is excluded but the income minus expenses will need to go toward your fathers’ monthly patient liability at the facility.

Is the cash value in my life insurance policy considered a countable asset or is it exempt?

Medicaid allows for a$ 2,500.00 face value exemption. No cash value is counted if the total face value of life insurance is $2,500.00 or less. If the total face value is greater than

$2,500.00, then the cash value is considered a countable asset. The cash value may be designated for burial and receive a burial exclusion which is up to $2,500.00.

What are the limitations when purchasing a pre-paid burial plan?

There is no dollar limit when purchasing a burial plan. In order for Medicaid to not view the burial plan as an asset, it must state on the contract that the plan is irrevocable. Also, only the burial services are counted. Burial property may be excluded for the individual and spouse such as burial spaces, plots, monuments, niches, etc.

My mother needs 24-hour care and moving into a nursing facility. Will the state take her home?

No. Florida Medicaid considers the homestead to be an exempt asset. This rule does not apply in every state.

Are term life insurance policies considered to be an asset when determining cash value?

No. All term policies are viewed as exempt because they carry no cash value.

Will Medicaid assess my mother’s furniture and contents in her condo for value when she enters a nursing home?

No. Personal property is considered an exempt asset for Medicaid eligibility purposes, except for certain valuable art and collectibles.

I told my financial planner about my mothers failing health and he suggested I purchase an annuity to shelter her assets. Is that true?

Annuities are considered an asset unless they are annuitized and the applicant or applicant’s spouse is taking equal monthly installments in an actuarially sound fashion. These annuities must be irrevocable and can cause a huge problem with Medicaid eligibility if not set up correctly. Annuities are commission based and can carry high costs to the purchaser.