Can I Prepay Expenses as Part of a Medicaid Spenddown
Can I pre-pay for certain expenses I know are coming up as part of the spend down? Now, as a quick overview, there are a million ways to spend money to get assets down for Medicaid. And we never want people to be wasteful because we have these really neat ways of protecting people's assets to qualify them for Medicaid, so they don't have to go broke and spend all their money.
But while we're in the business of trying to get money out of someone's name, before we get to our complicated Medicaid planning tools and strategies, we like to think about things that are very productive. And there's this video that, there's another video and articles that talk about kind of a more comprehensive list of how money can be spent. But one way that people hope that they can spend their money sometimes is that they can pre-pay for upcoming expenses.
Paying In Advance
The biggest, most common example I hear about this is they live in a condo, and they have homeowners association dues every month, right? And so they will ask, "why don't I pay a year in advance?" This is really good in theory, but unfortunately, Medicaid doesn't like seeing that. Suppose it's something you wouldn't normally do. They don't want to see you pre-pay it. There's no problem. Come November, pay your property tax bill early because there's no reason why you shouldn't take advantage of that discount. And interestingly enough, pre-paying your mortgage or paying down debts is absolutely no problem with that.
But pre-paying for things like your homeowner's association dues that you typically would never contemplate doing. Still, you're contemplating it, and now you're going, "how can I get rid of expenses?" They don't want to see that happen. However, if you're going to set aside money to anticipate these upcoming expenses, we will often use what's called a pooled special needs trust. This is a legitimate legal and ethical way of setting aside money. And then, it can be used to pay for anything the Medicaid applicant needs or wants, including things like the HOA fees and pre-paying for wherever they want or paying for things as they come due.
It's a way to keep you liquid. Again, different articles and videos talk about how pooled special needs trusts are not perfect; they also have their drawbacks. But again, I just wanted you to get a sense of if you're going to do something like pre-paid expenses. We have a way of doing that in a way that's okay with Medicaid. Certainly, when you call our office, we'll talk about all sorts of other Medicaid spend-down tools and techniques.
And then again, because we never want to waste money, we don't want to spend any money just for the sake of spending money. We have some really great Medicaid planning strategies.
A Florida Medicaid Attorney You Can Trust
The pooled special needs trust is one of many that we can discuss with you during our full consultation. So if you're interested in getting Medicaid to help pay for some or all of your long-term care expenses, whether at home in an assisted living facility or a nursing home's expensive prescriptions, please schedule a consultation. We look forward to serving you and we work with anyone in the state of Florida. Thank you
Feel free to peruse our other resources:
- Your Guide To Choosing A Nursing Home In Florida
- Estate Planning For Seniors: 5 Things You Need To Know
- How to Protect Your Assets from Medicaid Estate Recovery
- Understanding Medicare and Medicaid's Hospice Benefit
- When To Enroll in Medicare
