Your Legal Questions Answered

Hello, We are Colorado attorneys, so all of our legal advice concerns Colorado. Medicaid is a state-federal partnership, so the rules vary widely by state. If you reside in Colorado and would seek benefits in Colorado, then it does not matter where the land is – qualification for government benefits would be determined under Colorado law.

When people talk about protecting assets from long-term care costs, they normally are referring to the high cost of nursing home care and how to qualify for the Medicaid program, which is the government program that will pay for nursing home care for the financially needy. To qualify for Medicaid, you must be income qualified, asset qualified, and medically qualified. It is relatively straightforward to become income qualified; even if your income is over the income limit ($2,349 in 2020) most people can become income qualified though the use of an income trust (also known as a Miller trust) at the time of application. To be qualified from an asset standpoint, however, an unmarried individual going into a nursing home cannot have more than $2,000 of countable assets. (Note that not all assets are countable.)

First, if you are single and have income producing assets that exceed the cost of nursing home care (approximately $8,500 per month in Colorado) you probably do not need to worry about qualifying for Medicaid. Likewise, if you have longterm care insurance and you are adequately insured, it is not necessary.

If you do not have adequate income, and you do not have longterm care insurance, then you can protect the land in several ways. If you are healthy, and you do not expect to need long-term care in the next 60 months, a specialized type of irrevocable trust can protect the land. Likewise, a gift of the land will protect it if you will not need Medicaid benefits in the next five years. If you or the owner is going into a nursing home imminently, then crisis planning can protect the land in many cases. Crisis planning is the use of various strategies to protect assets in conjunction with a Medicaid application. Without knowing all of the other assets and martial information I can’t suggest any ideas at this point.

It is important to know that there are very technical rules around what is countable for Medicaid purposes, and I have not given a full answer. (I do not have enough information.) Note that not any irrevocable trust will do as the trust terms must comply with Colorado’s Medicaid rules, and gifts can be very problematic.

It is critical to speak with an elder law attorney to discuss your specific scenario before you do anything. If you plan incorrectly it can be impossible to fix, and our attorneys may recommend a different course of action based on your entire scenario. The information I provided is for general information only and should not be relied upon, and does not create an attorney-client relationship.

If you would like to schedule an assessment with an elder law attorney at the firm, you can do so online 24/7 by going to go.oncehub.com/rhbooknow or calling us at 303-688-0944.

Good luck!