Protecting Your Inheritance from Iowa Medicaid

Here at Huizenga Law Firm, P.C., we often encounter concerns regarding how Medicaid in Iowa may affect an inheritance. Medicaid is a federally mandated program, managed at the state level, aimed at providing health coverage to low-income individuals. In Iowa, the Medicaid program provides benefits to eligible individuals, including seniors needing long-term care such as nursing homes. However, to qualify, certain income and asset limitations must be met. Thus, potential clients often worry that they might have to deplete their inheritance to become eligible for Medicaid assistance.

Impact of Medicaid on Your Inheritance

The question is, how does Iowa Medicaid impact your inheritance? When an individual applies for Medicaid benefits, their income and assets are evaluated to determine eligibility. This evaluation includes checking for any transfers of assets that occurred within the past five years, also known as the ‘look-back’ period. If during this period, it is found that the applicant transferred assets for less than market value, it could lead to a period of Medicaid ineligibility. Therefore, it’s crucial to plan your estate wisely to protect your inheritance.

The Importance of Protecting Your Inheritance from Medicaid

Preserving one’s inheritance from Medicaid’s potential claim is a concern that hits close to home for many. Primarily, individuals want to protect their inheritance to ensure that their hard-earned assets are passed down to their loved ones instead of being consumed by long-term care costs. The goal is to provide for future generations, upholding a family’s financial legacy. Furthermore, people often desire to safeguard specific sentimental items or family heirlooms, keeping them within the family. It’s also about maintaining a sense of autonomy, having the freedom to decide how one’s assets are distributed after their lifetime. At Huizenga Law Firm, P.C., we recognize the importance of this preservation and work diligently to help our clients establish strategies that protect their inheritance from potential Medicaid claims.

Strategies to Protect Your Inheritance

We at Huizenga Law Firm, P.C., believe in planning ahead to safeguard your legacy. One strategy we often recommend is setting up an Irrevocable Trust. In Iowa, assets held in an irrevocable trust are generally not considered a part of the Medicaid applicant’s assets, providing they were transferred to the trust more than five years prior to applying for Medicaid. In addition, it’s essential to be mindful of the Medicaid look-back rule while transferring assets.

Medicaid Asset Protection Trust (MAPT)

One specific kind of irrevocable trust we utilize is the Medicaid Asset Protection Trust (MAPT). This trust can serve as a viable means to shield your assets from Medicaid’s reach, provided it’s set up in compliance with Iowa’s rules and regulations. The key to MAPTs is that they should be structured properly and in a timely manner, far enough in advance of a potential Medicaid application.

Irrevocable trusts – including MAPTs – aren’t right for everyone, though. Your unique circumstances may require something different. Fortunately, we can help you find the right approach!

Utilize the Spousal Impoverishment Law

If one spouse requires Medicaid assistance while the other remains in the community, the ‘Community Spouse Resource Allowance’ comes into play. Under the spousal impoverishment provisions, the spouse remaining in the community, or the ‘community spouse,’ is allowed to retain a certain amount of assets without impacting the eligibility of the spouse needing Medicaid. In Iowa, the community spouse is allowed to keep half of the couple’s combined assets, up to a certain limit.

Preserve Your Assets with Huizenga Law Firm, P.C.

Planning for the future is crucial, especially when it involves protecting your hard-earned inheritance. While the process can seem daunting, we at Huizenga Law Firm, P.C. are here to help. With years of experience in elder law and estate planning in Iowa, we are committed to helping our clients understand Medicaid rules and design strategies to protect their assets. For help understanding Medicaid expansion and applying for Medicaid benefits, contact Huizenga Law Firm, P.C., today at 712-737-3885.