Financial Management Issues

Estate Management
For those with substantial resources, please do not make the common mistake of ignoring estate management. After an individual's demise, their heirs spend a lot of time and aggravation obtaining inheritances, and they lose a lot of money in inheritance taxes, if estate planning is neglected. Find a competent expert in this area, as soon as you can. Do not wait until you are too old to take care of this. Planning on transferring assets without losing a lot of money to taxes can take years if there are substantial assets.

Long-Term Care Issues
If you don't have a Long-Term care insurance policy, or the resources to pay out of your own pocket for Nursing Home or extensive Home-Health Aide care for you and/or your spouse if the need occurs, you should think about transferring your assets to a family member, or someone else that you can trust, at least 3 years before you may need the long-term care. This enables you to be covered by Medicaid, which will cover such care. Note: Medicare does not cover long-term facilities such as a Nursing Home or Health Aide Care.
If you do plan on transferring assets, note that there is a limit to how much money you can gift to any one person per year, without having them incur substantial gift taxes. At the time of this writing, the limit is $20,000 per year.

Low-Income Entitlements
Medicaid eligibility has extensive benefits, such as:
  • prescription drug coverage that makes Medicare Part D unnecessary to pay for
  • many over the counter drug store items that other insurances do not cover
  • the 20% of Medicare Part A coverage, the deductibles, and co-pays that make Supplemental Insurance coverage to Medicare unnecessary
  • paying for the premiums for Medicare Part B

The income requirements for Medicaid, although quite low, (see the following link: ) can be managed in several ways, even if your income is higher:

  • Spenddown

The Medicaid Excess Income program is sometimes referred to as the "Spenddown program" or the "Surplus Income program". If your monthly income is over the Medicaid level, you may still be able to get help with your medical bills. The amount your income is over the Medicaid level is called excess income. It is like a deductible. If you are eligible for Medicaid except for having excess income and you can show that you have medical bills equal to your excess income in a particular month, Medicaid will pay your additional medical bills beyond that for the rest of that month. This includes outpatient care, doctor and dental visits, lab tests, prescription drugs, and long-term care in the community such as home care and assisted living.  This allows you to become eligible for Medicaid even though your monthly income is too high.
to participate in the Spenddown Program, simply apply for Medicaid, and if you are denied for excess income, you will be given the opportunity to participate in the Spenddown Program.

  • Pooled Trust
If your income is above the Medicaid limit, it doesn’t necessarily mean you’re ineligible for Medicaid. Residents of New York State who have a disability and wish to obtain Medicaid are eligible to participate in the Pooled Trust program. Through the program, you keep your excess monthly income in a special account, known as a “pooled trust.” The State doesn’t consider this surplus amount part of your overall income. You can then pay a variety of household expenses through the trust, such as rent, utility bills, food, and other items. 

Pooled Income Special Needs Trust[edit]

A Nonprofit Pooled Income Special Needs Trust is authorized by 42 U.S.C. § 1396p(d)(4)(C). Again, the individual must be disabled under the Social Security definition. Unlike the other exempt trusts which can be administered by a private trustee who is an individual (such as a family member), the Pooled Income Trust is run by a nonprofit association, and a separate account is maintained for each individual beneficiary. All accounts are pooled for investment and management purposes. The trust (or more accurately, an account in the pooled trust) may be created by the beneficiary or a parent, grandparent, guardian, or court. In some states, a disabled individual over age 65 is entitled to transfer assets to a pooled trust and then be immediately eligible for Medicaid. In other states, the transfer must be made before the disabled individual attains the age of 66. Upon the death of the disabled individual, the balance is either retained in the trust for the nonprofit association or paid back to the State Medicaid agency for its medical assistance.

There are numerous Pooled Trusts available; however, the history of Pooled Trusts is checkered with failures and mismanagement. Therefore, states have developed careful monitoring procedures for Pooled Trusts and now all 50 States have at least one state-approved Pooled Special Needs Trust.[8]

The current, as of this writing, resource limit for Medicaid is $14,100 for community Medicaid, and $2,000 for long-term care Medicaid, for an individual. Use this link to see the current requirements in New York State:

There are many other low-income entitlements that are available if one meets the eligibility requirements for Medicaid.  See the Advocacy section for screening tools to help you find them.