Caregiver Agreements

• Seniors will often start putting their money into the hands of their adult children to lower the amount of their cash assets, to be able to qualify for Medicaid. Unfortunately, Medicaid considers cash assets in the possession of the senior for five years into the past. A senior can use part of his cash to hire an adult child to provide care for him through a caregiver agreement. All such reasonable wages for the actual and necessary care provided will be considered an expense right away and not a countable asset, even if it happens sooner than the five-year Medicaid time frame. In addition, the senior gets the care he needs from a trusted family member.
  
  

Long-Term Care Insurance

• Since Medicare usually will not provide for assisted care for seniors, a good strategy to take is to buy and maintain a long-term care insurance policy in advance of needing such care. These policies will usually pay for most types of assisted care, whether at home or in an institution. This is very desirable, because the senior does not have to worry about having too much income or assets, as with Medicaid. The policy will provide benefit amounts chosen by the insured, with higher dollar amounts costing more in premiums.
  
  

Medicaid Asset Protection

• For seniors and their families who cannot afford or qualify for long-term care insurance, setting up and maintaining a Medicaid Asset Protection Trust account is a good option. The senior puts his cash into this trust, which must be under the control of a designated trustee, other than himself or a spouse. The senior is still allowed to take interest income from this account, but is not allowed to touch the principal. However, the senior maintains control to change the designated trustees.
  
  

Other Considerations

• The trust arrangement can protect physical assets such as securities and real estate as well. If the trust fund has legal ownership of these assets, they are protected, as long as the senior only uses any income generated from them. A home under this arrangement can still be lived in by the senior and the senior can still take most of the tax deduction benefits. The need for asset protection is much more pronounced for a single senior who needs care, as the asset exemptions for Medicaid eligibility are much less for them. For example, a single senior applying for Medicaid for institutional care, has no automobile or real estate exemption, which a married couple does have.