Medicaid Estate Planning: Practices and Perceptions of Medicaid Workers, Elder Law Attorneys, and Certified Financial Planners

Abstract

This study examined Medicaid estate planning (MEP) through the experiences and perceptions of three groups in Connecticut: Medicaid eligibility workers (n = 128), elder law attorneys (n = 41), and certified financial planners (n = 29). Respondent groups varied significantly with regard to their perceptions of prevalence and magnitude of MEP, the nature of transferred assets, mechanisms for transfers, and characteristics of the "typical" client participating in asset divestiture for the purpose of qualifying for Medicaid. This substantial lack of concordance among those professionals most closely involved with MEP poses challenges for policy and research in this area.

Legal Welfare Fraud Among Middle-Class Families

“…Apart from transferring assets to family members, various kinds of irrevocable and nondiscretionary trusts also enable individuals to transfer their wealth through instruments that can continue to provide them with an income stream. Added to this, investments in foreign countries and out-of-state property are unlikely to be revealed in counting assets (L. Walker et al, 1998).…”

“…The Medicare Catastrophic Coverage Act of 1988 established Medicaid spousal impoverishment rules whereby a spouse living in the community is permitted to retain one half of the couple's assets. Although most of the provisions of the this act were repealed, the provisions enabling spouses of Medicaid recipients to retain property was retained, although states set the limits as to the amount of assets and income permitted to be passed on to the spouse in this manner (Burwell & Crown, 1995;L. Walker et al, 1998L.…”

“…An entire industry of financial planners and estate lawyers devote a considerable portion of their practice to Medicaid estate planning, enabling usually upper-middle-class persons to transfer assets so that they can be eligible for Medicaid support and still be able to retain their estates in their families. L. Walker et al (1998Walker et al ( , 1999 conducted focus groups with elder law attorneys, certified financial planners, and Medicaid eligibility workers in the state of Connecticut. Certified financial planners reported advising 40.1% of their clients about asset transfers, and attorneys reported advising about 51.4% of their clients about asset transfers.…”

Controllers and Noncontrollers: A Typology of Older Americans and their Caregivers’ Approaches to Managing the Private Funding of Long-Term Care

“…Private insurance pays only about 1%. The balance is paid for by federal, state, and local governments (Walker, Gruman, & Robison, 1998).…”

“…Much current research on financial responsibilities for long-term care has focused on measuring the number of people who spend down their assets to become Medicaid eligible, whether more spend-down occurs in the community than in nursing home, and on how long it takes to spend down (Walker, Gruman, & Robison, 1998). Others speculate that private-pay residents who might be eligible for public benefits chose to spend their own exempt assets or the resources of their relatives rather than apply for Medicaid (Ernst, Hay, Fenn, Tinklenberg, & Yesavage, 1997).…”