Medicaid compliant work-around tools to overcome 5 -year look back period

Attorney Tom Olsen: We know from experience that what most people know about Medicaid and nursing homes is this, is that Medicaid has a five-year look-back period. Most folks know you can't simply give away your assets and then go qualify for Medicaid, and people know that five-year look-back period. What they don't really know is that there are Medicaid-compliant tools to, in a sense, work around that five-year look-back period. There are still ways to protect your assets and your life savings from nursing homes and Medicaid. We know all about those and that's what we want to help people do.

Attorney Robert Hidock: Absolutely. You can't give something away and not receive anything in exchange for it. That would be a violation of Medicaid's five-year look-back period. Using a Medicaid-compliant tool, like the personal services contract, you're not giving money away, you're contracting for your care, you're prepaying one of your loved ones in advance to care for you. That is a perfect spend down of their assets and it bypasses Medicaid's five-year look-back period and allows somebody to be approved for Medicaid.

Attorney Tom Olsen: Let's give people a very simple fact situation. Mom owns a home, and she's got $200,000 in the bank and she's got two kids. She's got a will that says, "When I die, leave everything equally to my two kids." One of the kids comes to us and say, "Mom's going to a nursing home, what do we do?" Well, first of all, remember that here in the state of Florida, the home you live in, your homestead, is automatically protected from nursing homes and Medicaid, but we still want to take steps to avoid probate on the home, we're going to do a Lady Bird Deed.

Attorney Robert Hidock: Absolutely. That also helps with Medicaid reimbursement claims.

Attorney Tom Olsen: Then, as far as her $200,000 are concerned, we can do two personal services contracts, where we pay each one of her children $100,000 for a total of $200,000, and in that personal service contract, the kids promise to take care of mom, or visit her, take care of supplemental needs for her while she's in a nursing home for the rest of her life.

Attorney Robert Hidock: Yes. A lot of times, Tom, they're actually getting paid for doing things that they're already doing. Now they're getting paid for it, and we always try and replicate their parents' estate plan. If there's three kids, we try and do three personal services contracts, and if there's one we only do one.