community spouse, if any) has assets in excess of allowable asset limits for Medicaid eligibility, that is when emergency Medicaid planning becomes an option. If the applicant has a community spouse, we often recommend a promissory note for an amount equal to the assets in excess of the allowable asset limits, with income via promissory note payments being made back to the community spouse. If the applicant does not have a community spouse, then we instead often recommend gift and loan (also sometimes referred to as half-a-loaf) planning, which involves a carefully calculated and structured gift and promissory note out of the applicant’s name, with promissory note payments being made back to the applicant as an income source. The note repayments being considered income means that they must be paid towards the cost of care, but after the note repayment period is completed, the gifted funds will have been saved. Another option, in lieu of a promissory note in either of the situations above, is a Medicaid-qualified annuity. Why is it important to consult an elder law attorney when attempting to achieve eligibility for emergency Medicaid? It is important to consult with an elder law attorney when attempting to achieve eligibility for emergency Medicaid because the rules for and regulations governing qualification are extremely complex. Many people attempt to apply on their own, with the best of intentions, but without a thorough understanding of the rules and regulations. The rules and regulations, when considered alongside the specific care needs – as well as income and assets of the applicant and spouse (if any) – can apply very differently depending upon the applicant’s specific situation. As a result, a simple mistake in calculations or misunderstanding of the rules can often cost a family tens of thousands of dollars (if not more) in penalties or nursing home payments during times when the applicant is unqualified for often very nuanced reasons. Additionally, due to the processing timelines of an application for Medicaid, applicants often will not know of mistakes they have made in the application or calculation for eligibility process until at least three to six months after the application has been submitted. Therefore, there may not be the ability at that point to go back and fix mistakes, which results in private payment at the full daily and monthly rate being required for that period of time when the applicant was awaiting processing of the Medicaid application but was not in fact eligible due to a miscalculation or misunderstanding of the rules and regulations. EXPERT INSIGHT 81 About Samantha McCarthy Samantha McCarthy founded McCarthy Law with a goal of making a meaningful impact in the lives of others. Currently residing in Smithfield, Rhode Island, and licensed to practice law in both Rhode Island and Massachusetts state courts, she has been recognised by the Feinstein Center for Pro Bono & Experiential Education for her extensive public interest legal work and commitment to public service. She prides herself on being approachable and compassionate, and believes in developing relationships with her clients that allow both parties to grow and learn. About McCarthy Law LLC McCarthy Law LLC is an estate planning and elder law firm that assists clients with the creation of estate plans, advice on elder care issues, and aid with long-term care and Medicaid planning. The firm’s goal is to build relationships with clients where they feel listened to, understood and cared for. Contact Samantha McCarthy Founder McCarthy Law LLC 19 First Avenue, East Greenwich, RI 02818 Tel: +1 401-541-5540 E: mloffice@mccarthylawri.com www.mccarthylawri.com
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