PM sent Scott, the new medicaid rules make that plan a bad idea. there are better ways to go about it. Let me and VAnimrod help you out with a plan that will work. FWIW I am past president of the Walla Walla Estate planning council, was dealing with this stuff for 37 years before I retired including many, many estate planning seminiars and workshops hosted by me.
No idea about Scott's wife but if Scott is 65 years old (or older) now, I would think that he would be covered by Medicare - not Medicaid.
A VERY common misconception, and a very costly one, is that Medicare or VA will cover long term care. This is not the case in most instances. If (more like WHEN, statistically) either Scott or his wife need long term care. Such care is not covered by medicare unless after a 3 day stay in the hospital AND the person is getting "Skilled Care" which is very narrowly defined and very limited in time and scope. VA does not cover this, either, unless the long term care need can be directly linked to an injury incurred while on active duty and under orders.
For long term care such as Nursing home, Assisted living, long term in home health care (medicare does have a limited benefit for this in home care IF one is completely homebound and other criteria are met, but only for limited skilled care, not around the clock supervision etc.) the money comes from either:
1) Your assets - most common -
2)Long term care insurance, which far too few people have or
3) Medicaid...
BUT, Mdicaid only comes into the picture AFTER one has spent one's own assets down to very low levels, and transfers of money or property within the past 7 years before application for Medicaid can and will be reversed unless the property was sold for fair market value. A gift, putting the property in a will or the common revocable trust etc. is no longer a valid protection plan. As Medicaid has become more and more of an albatross on the federal budget, more and more of the onus or costs are being put onto the families in need, and gifts or old estate plan idea's are oft times no longer good protections.
Generally, only a special needs trust for a disabled dependant or an IRREVOCABLE trust that is more than 60 months in place, with the asset one is trying to protect placed into that trust also 60 months prior to need will save a farm etc. OR, of course, a good long term care insurance policy.
Another good plan for this kind of issue can be to get a reverse mortgage on the property being protected and use some of the proceeds to purchase either a monthly pay or single premium long term care policy. There are single premium long term care policies out there that, if not used, return 100% of the premium paid, with interest, to the estate! These should be a LOT more popular than they are.
