Families who have a loved one who receives Medicaid or who will be applying for Medicaid someday can develop a plan to protect some of the loved one's assets from long term care costs and still receive Medicaid benefits. The family must become familiar with the Medicaid rules to avoid violating the rules, which could inadvertently cause a disabled or elderly loved one to lose Medicaid benefits or delay eligibility. Knowing which assets are considered "exempt" and which assets are considered "unavailable" is very helpful, if the goal is to protect as many assets as possible.
A court appointed Guardian is sometimes necessary to handle an incapacitated person's health care and/or financial decisions. Guardianship of the Person is necessary when someone is unable to make decisions about their health and living situation or when a child does not have a parent who is able to act as his or her natural guardian. Guardianship of the Estate is necessary when an individual, including a minor, is deemed to be unable to make financial decisions. In many cases, Guardianship can be avoided if the proper estate planning documents are executed.
A person who receives Medicaid or other types of government benefits based on disability can continue to receive those benefits if their assets or gifts from other people are held in a trust called a "special needs trust." There are several types of special needs trusts depending on the age of the beneficiary and the source of the funds. It is important to remember that a special needs trust with a person's own money, such as money from an accident settlement, should not be combined with a special needs trust created to hold a gift or an inheritance from a family member.