Earlier this week I met with a family from Metairie whose elderly mother is on the verge of entering a nursing home. The kids wanted to know how mom could qualify for Medicaid to pay for her care so that the family could preserve as much wealth as possible. Their father died 4 years ago, leaving the mother usufruct over half of the property that she and the husband owned together. The kids wanted to know whether the portion Mom had usufruct over would count against her eligibility to receive Medicaid funding to pay for her nursing home care. In order for mom to qualify for Medicaid to pay for her care, she can only have up to $2,000 in available resources, anything greater than $2,000 will need to be spent down before she will qualify for aid. So will mom need to spend down her assets and the assets she has usufruct over?
The short answer is yes. Funds subject to usufruct still count against Louisiana Medicaid eligibility and must be spent down before you can qualify for Aid. Now, if someone terminates their usufruct, they can get the assets out of their name. However, terminating your usufruct must be accomplished at least five years prior to applying for Medicaid to avoid a penalty which will prevent you from receiving Medicaid for a specified period of time. If you terminate your usufruct within 5 years of applying for Medicaid, a value is assigned to the usufruct you terminated based on your age, and for every $4,000 in usufruct you terminate, that means a one month penalty period where you will not qualify for aid.
By planning early and terminating your usufruct at least 5 years before a nursing home stay, you can avoid having your usufruct hinder your ability to qualify for Medicaid. To discover the best way to protect your assets from Louisiana nursing home spend-down, call (504) 274-1980 in the Metairie and New Orleans Area, or call (985) 246-3020 in Mandeville, Covington, Slidell, Houma, Thibodaux, and surrounding areas.