New Jersey Medicaid Planning Attorneys

Protecting Your Hard-Earned Assets for Today and the Future

It’s human nature to be concerned about the issue of aging, especially the possibility of needing nursing home care and how to pay the associated exorbitant costs. If you are over 65 or are permanently disabled, you may qualify for Medicaid (NJ FamilyCare) to cover doctor visits, prescriptions, nursing home care, and other long-term healthcare needs.

Medicaid is a needs-based program with strict rules regarding the income and assets individuals can have and still qualify. Fortunately, elder law attorneys at Bratton Law Group have the skills and knowledge to help you address your concerns and reduce the risk of financial devastation. We will review your situation and discuss ways to legally and strategically preserve your assets.

What is Medicaid Planning?

Medicaid planning is a strategic process utilized to organize a person’s income and assets in a way that helps them meet Medicaid eligibility requirements. Because the cost of long-term care can quickly deplete life savings, planning ahead enables individuals to qualify for Medicaid benefits while protecting their resources for themselves or their family members.

If you don’t qualify for this needs-based program, you may end up paying costly medical bills that can quickly eat through your savings. By arranging your finances in creative and legal ways, it’s possible to meet Medicaid eligibility requirements while protecting your assets for yourself and your heirs.

New Jersey Medicaid Eligibility and Assets

To be eligible for Medicaid (specifically Long-Term Care Medicaid or MLTSS) in New Jersey, a person must meet both clinical and financial requirements:

Age/Disability: Be 65 years of age or older, blind, or permanently disabled.
Level of Care: Require a Nursing Home Level of Care, meaning they need assistance with three or more activities of daily living (ADLs).
Financial Limits: Meet specific, strict standards for income and countable assets (resources). Currently, a single applicant is typically allowed only $2,000 in countable assets.

When applying, Medicaid will collect information to determine your final eligibility. Assets that are generally exempt (non-countable) in New Jersey include:

Your primary residence (up to a certain equity limit, provided a spouse or dependent lives there, or you have intent to return).
One automobile used for transportation.
Household furnishings, personal items, and pre-paid burial/funeral funds.

The 5-Year Medicaid Look-Back Period and Penalties

Proper timing is essential in Medicaid planning. The Medicaid Look-Back Period is a five-year (60-month) analysis of an individual’s financial history immediately preceding their application date for long-term care benefits. [Image of Medicaid Look-Back Period timeline and penalties]

The purpose of this review is to ensure that assets were not transferred or gifted for less than fair market value in an effort to meet the asset limit.

Violations: Gifting assets or selling them for less than fair market value can lead to a penalty period of ineligibility.
Penalty Calculation: The penalty is calculated by dividing the total value of the transferred assets by the state’s daily penalty divisor (a figure representing the average cost of nursing home care in NJ). This penalty period can last months or years.
Exceptions: Transfers to a spouse or to a disabled child are generally exempt from this penalty.

Don’t Delay! Waiting until you need expensive medical care may prevent you from immediately qualifying. A skilled attorney is necessary to navigate these complex rules.

Spousal Protections in Medicaid Planning

If only one spouse needs long-term care (the institutionalized spouse), Medicaid provides special provisions to prevent the other spouse (the Community Spouse) from becoming impoverished. These rules include:

Community Spouse Resource Allowance (CSRA): The non-applicant spouse is permitted to keep a certain portion of the couple’s jointly-owned countable assets, up to a state-set maximum (currently $162,660 in New Jersey).
Minimum Monthly Maintenance Needs Allowance (MMMNA): The non-applicant spouse can retain a minimum level of monthly income. If their own income falls below this threshold, they can receive a portion of the institutionalized spouse’s income to reach the allowance.

Effective Medicaid Planning Strategies

A Medicaid planning lawyer in New Jersey can help you design a strategy customized to your situation. Common legal strategies include:

Irrevocable Trusts: Placing countable assets into a properly structured Medicaid Asset Protection Trust (MAPT). Once assets are in the trust, they are generally no longer considered your property and do not count toward eligibility.
Spending Down Assets: Legally converting countable assets into exempt assets by paying off debts, prepaying for funeral costs, or making necessary home modifications/improvements.
Medicaid-Compliant Annuities: Converting countable assets into a stream of income for the non-applicant spouse.
Utilizing Exemptions: Strategically transferring assets to exempt individuals, such as a spouse or disabled child.