Florida Estate Planning Lawyer Blog
The Medicaid Asset Test
If you qualify under the income test or can create a Qualified Income Trust (QIT) you must still pass the Medicaid asset test. This test can be the most daunting and confusing. First, you must know the asset test limits. These vary between single and married individuals. The reason for this is so that a survivor of a Medicaid recipient is not left destitute by the spend down (more on this in a moment). The asset test level for an individual is $2,000 in countable assets and $104,000 (2008) in countable assets for a community spouse who not in a nursing home facility. For married couples, both persons must qualify under the asset test.
Second, you must understand the difference between exempt (countable) and non-exempt assets (non-countable). Exempt assets do not count towards the asset test limits and non-exempt assets do count towards the asset test limits. The following are exempt assets:
* Homestead of any value (with some limitations)
* First Car of any value * Second car if >7 years old but < 25 years old. (Cannot be a luxury car)
* Life Insurance up to $2500 or cash value of Life insurance if in face value is in excess of $2,500 * Burial Plots for you and your spouse and others in your name ($2,500 each)
* Household and personal belongings * Irrevocable Burial Contracts * The principal in certain annuities and IRAs or other qualified plans
There are some other non-countable assets but for the most part this is it. What this means is that checking and savings accounts, stocks, bonds, mutual funds, IRAs, 401(k)s, 403(b)s and trust assets are all counted towards the asset test. In short, any asset that is not exempt and can be turned into cash is counted. Please see the Florida Administrative Code Section 65A-1.712 (SSI ¬Related Medicaid Resource Eligibility Criteria) for a more technical analysis.
What happens if you (and your spouse’s assets) are over the asset test limits? You will have to “spend down” until you qualify. In other words, you will have to spend your own assets on you or your spouse’s nursing home care until such time as they are below the asset test limits and you can qualify. Some call this the “Pre-Death Tax”.
However, there still are some things that you can do. Just as the income test had planning alternatives, so does the asset test. But first you need to know some other rules concerning the asset test.
If you are a concerned relative or friend of an elderly person and need help with Estate Planning, Elder Law, or Medicaid and are in the Jacksonville, Orange Park, St. Augustine, Fernandina Beach, you should Contact a Florida Estate Planning Lawyer or Jacksonville Elder Law Lawyer.