Medicaid Planning helps many Louisiana families achieve asset protection against long-term care costs. This strategy often utilizes Trusts which hold assets in excess of preset Medicaid eligibility Limits. When the Trust owns assets, those assets don’t count against the planner’s eligibility for Medicaid coverage of long-term care expenses. Medicaid covers most of an applicant’s long-term care expenses as long as the assets held outside the trust fall below the aforementioned limits. So what are these Medicaid limits in Louisiana.
For single persons, the asset limit is always $2,000.00. This number remains unchanged. This means a single person seeking medicaid for long-term care can only have up to $2,000.00 in countable. Be aware, this $2,000.00 excludes the value of the home, a vehicle, and prepaid funeral plans. However, single persons must deplete any other assets in excess of $2,000 if they want Medicaid. Clearly, single persons get very little leeway when it comes to Long-Term Medicaid planning.
Conversely, Medicaid allows married couples ownership of a larger amount. As before, Medicaid allows the person needing long-term care ownership of $2,000.00 in countable assets. Additionally Medicaid allows the spouse of the Medicaid applicant an amount deemed necessary for their continuing needs. Medicaid calls this amount the Community Spouse Resource Allowance (CSRA). This amount changes each year with inflation. For 2020 the CSRA sits at $128,640.00. This is up from $126,400.00 in 2019. Adding the new CSRA to the standard $2,000.00 limit allows married couple to now keep up to $130,640.00 and still qualify for Long-Term Care Medicaid.
If you have assets in excess of the above limits, a future long-term care need would create a spend-down scenario. You would pay all of your long-term care expenses out of pocket until resources deplete below the asset limits. Avoiding this spend-down risk in whole or in part is possible with the proper Louisiana estate planning. However, timing is important with Medicaid planning. Ideally, you complete this planning at least five years before a long-term care need arises. If you would like to explore estate planning options that will preserve your wealth and allow for Medicaid eligibility call Legacy Law Center at (504) 274-1980 in Metairie, New Orleans, and surrounding areas or call (985) 246-3020 in Mandeville, Covington, Slidell, Houma, and Thibodaux.