NC Medicaid:

Estate planning is based primarily on federal gift and tax law, regulation and case law.

Medicaid is governed by an unrelated set of federal law, federal regulation, state law, state regulation, state discretion in some matters and occasionally case law. Veterans' benefits are governed by an entirely different set of federal laws and regulations, and wide areas of discretion.

  1. Gift Tax Exclusion
  2. Revocable Living Trusts (RLT)
  3. Irrevocable Trusts
  4. Adding names to bank accounts and deeds
  5. Life Estates
  6. Estate Disclaimers

Medicaid is needs-based joint federal-state program of medical assistance for individuals who are aged, blind, or disabled or who are members of families with dependent children. Aged means 65 years of age or older. The Social Security definition of disabled is the inability to do any substantial gainful activity 20 C.F.R. 416.905.

Generally, to qualify for Medicaid a North Carolina resident needs to meet the following criteria:

  • Be in a nursing home - NOT ASSISTED LIVING
  • Be in a licensed Medicaid bed
  • Need skilled or intermediate nursing care
  • Meet Medicaid's financial criteria

Income rules:

What is Income?
It includes wages, self-employment income, social security, pension, IRA mandatory withdrawals, interest, dividends, and annuities.

Asset rules:

Resources are those assets that an individual or a couple own and can apply, either directly or by sale or conversion, to basic needs of food, clothing, and shelter. This includes anything owned by their revocable trust. Basically, everything a person or couple owns or has a legal right to assert a claim to is considered a resource for Medicaid purposes. Resources include checking and savings accounts, investment accounts, 401K, IRA, Roth IRA, cash value of life insurance, vehicles, real property, and cash.
A person applying for Medicaid meets resource eligibility when he or she has no more than $2,000 in countable resources.
The spouse of a person applying for Medicaid may generally keep half of the couple's countable resources, with some exceptions.

Long Term Care Partnership policy

A qualified Long Term Care Partnership policy provides the Medicaid applicant/recipient with a resource disregard up to the amount of benefits paid out by the policy as of the date of application for LTC Medicaid. The resource protection at estate recovery is equal to the amount paid out from the qualified Long Term Care Partnership program policy as of the date of application.

Comparing Medicaid

NC Medicaid vs. Eligibility Coverage
Medicare

Most people 65 and older.
People younger than 65 who have certain disabilities and illnesses.

People of any age with kidney failure that requires dialysis or a kidney transplant.

Part A is hospital coverage. Part B covers doctor visits, lab tests, and other outpatient services.

Medicare may pay for up to 100 days of care in a skilled nursing facility per benefit period — 100 percent for the first 20 days (after a three-day hospital stay, provided skilled care is needed). Then, for days 21–100, Medicare requires a co-payment.
Long-Term Care Medicaid Applicants must be at least 65 years of age, blind or disabled.
Applicants must be US Citizens and residents of North Carolina.
Applicants must have a medically documented need for the level of care provided in a nursing home or intermediate care facility. Income lower than monthly cost of care. Applicants countable financial assets, which exclude a home and primary vehicle, cannot be more than $2,000.
This program pays for room and board costs in long-term care facilities (nursing homes) and covers medical care.
Medicaid allows financial protection for the married spouse at home.
Special Assistance Applicants must be at least 65 years of age unless they are designated as disabled by Social Security.
Applicants must be US Citizens and residents of North Carolina.
Applicants must have a medically documented need for the level of care provided in an adult care home.

Income of up $1,227.50 / $1,560.50 per month. Applicants countable financial assets, which exclude a home and primary vehicle, cannot be more than $2,000.
This program pays for room and board costs in adult care homes (assisted living) but does not cover medical care.
However, eligibility for this program ensures Medicaid eligibility and Medicaid will cover personal care services for the beneficiary.
Long-Term Care (LTC) Medicaid Applicants must be at least 65 years of age, blind or disabled.
Applicants must be US Citizens and residents of North Carolina.
Applicants must have a medically documented need for the level of care provided in a nursing home or intermediate care facility. Income lower than monthly cost of care. Applicants countable financial assets, which exclude a home and primary vehicle, cannot be more than $2,000.