Attorney Thomas B. Burton answers the following question:
"How Much Money Can a Medicaid Recipient Have in the Bank?"
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Hello, I'm attorney Thomas Burton and today's question is the following:
“How much money can a Medicaid recipient have in the bank?”
So this is a good question, one I see come up frequently. The short answer is you can have no more than $2000 in liquid assets in total and all your bank accounts, when you submit the Medicaid application in order to qualify for Medicaid. Now that's for a single individual. If you're married the community spouse can keep a certain amount of assets and that's going to depend on your total amount of assets.
So work with your attorney to figure out that number but if you're single person, the answer is it has to be $2000 or less, and for that reason, I don't recommend you have exactly $2000 in the bank when you submit that Medicaid application. You want to have under that amount because if you're over it even by $1, you would not qualify to receive Medicaid assistance.
Now there's certain assets you can keep such as your car, you can pre-fund the funeral home plan. You can prepay for your funeral but it has to be irrevocably either a funeral trust or a life insurance policy irrevocably assigned to the funeral home and there's other items, you can have and still apply and qualify for Medicaid. In fact, you can even have the house where it's up to 700,000 plus and qualify for Medicaid. That doesn't mean the house will be protected after you're gone. That's a different matter - the estate recovery program. If you want to protect the house, you're going to want to look at an irrevocable trust and do this planning five years in advance of when you need it.
But in general, the monetary limit, the one people ask about most often is that $2000 or less in liquid assets in the bank account and there's other assets they count to that you may not think of, such as whole life insurance policies etcetera. Annuities, brokerage accounts, that's all included in that liquid cash amount.
So work with your attorney. I recommend if you're looking to apply for Medicaid, work with the qualified Medicaid planning and estate planning attorney who can help you fill out the application correctly the first time, so that you get approved as soon as possible. Otherwise, there can be delays and they tell you to fill out multiple times and in the mean time you spent that money on the nursing home care, in the month, with the delays, instead of paying the attorney and helping you, hopefully get approved on the first application because a lot of what I do with clients is we look at sometimes moving assets into the allowed category, so that when the Medicaid application goes through, it can be approved quickly.
Now one other thing to note, I touched on the house, if you want to have the house, the house won't stop you from applying for Medicaid but later they will seek estate recovery from the house if it's in your individual name.
So if you want to do some pre-planning on the house, you should look at an irrevocable Medicaid asset protection trust and I have a free guide on my website, free 5 step guide on how to protect your home from the nursing home. I'll throw a link in this video to that guide, if you're interested in learning more about that and you do own a home, check out that guide. Go to the link, enter your e-mail and the guide will be sent to you. And then also check out my Medicaid and asset protection planning playlist on YouTube where I cover a lot more questions related to Medicaid qualification and asset protection.
So great question and thank you for asking.
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