In New York if you avoid Probate court they can't recover Medicaid expenses. So put all accounts to transfer at death, put all real estate in Life Estate Deeds, problem solved.
sorry - problem not solved .
while what you posted is true it is true with a big but and this can be very complicated . it is no where near as simple as you described it .
recovery and qualifying are two different things .
THE ISSUE IS YOU CAN'T QUALIFY FOR MEDICAID IN THE FIRST PLACE with those jointly held assets exceeding 14,250 except under 2 circumstances
To qualify for Medicaid, the recipient is limited to resources of no more than $14,250. However, certain resources are exempt, such as retirement accounts that are in the payout status or a home having an equity value of $786,000 or less.
Medicaid will count your IRA or 401k as an available source of funds to pay for your care, unless it is in payout status. "Payout status" means that you are taking at least the required minimum distribution out of your plan on a monthly basis.
If it's not in payout status, it may be beneficial to take the cash out and pay the income tax on it, and then transfer it to a trust. This avoids your retirement account being counted as a resource that you will have to "spend down" under Medicaid eligibility requirements. Instead, your money can be used for your benefit during your lifetime, and whatever is left can be passed on to your beneficiaries through the trust.
If the account is in payout status, your retirement assets are not counted as resources, but the monthly payments that you receive are considered income. If you are receiving Medicaid home care benefits, any excess income can be protected by a Pooled Income Trust . Use special trusts to guard cash, income, investments and other liquid assets). However, if you’re getting Medicaid nursing home benefits, the nursing facility is entitled to all of your monthly income except $50.
If you are receiving Medicaid benefits in a nursing home and your life expectancy is not very long, it may be to your children's financial advantage to leave the retirement plan in payout status and allow the nursing home to collect the income from your IRA or other plan while you are still alive. Upon your death, your kids, as your beneficiaries, can withdraw the balance in a lump sum or over time.
you can't just remove the recipients name from the assets if they go in to a facility since the 5 year look back period is in effect .
folks this stuff is very very complex and requires very skilled attorneys to navigate through.
usually a simple answer to a complex question is usually going to be the wrong answer .
today estate attorneys are avoiding a lot of the above because ny is a state that supports negotiations with medicaid .
rather than try to manipulate assets negotiations are being used to find reasonable amounts that a stay at home spouse can afford to pay without being impoverished over time .
of course though with ny offering total asset protection ltc plans our first choice is to take them up on it by purchasing 3 years insurance and avoiding all the other issues above .
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http://www.wny-lawyers.com/2012/05/23/ny-medicaid-estate-recovery-law-repealed/
http://www.cutner.com/401k_IRA_Medicaid.html
