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A friend wonders if her separate savings account from her business would need to be spent down before Medicaid would allow her husband with dementia to qualify for help. Her savings would be depleted in a few months and she'd be unable to pay for her own keep in their home. Does the savings account need to be in the business name or can it just be in hers?

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I’m with Geaton in that they need to clearly speak with an atty who does Medicaid eligibility work. A lot of them are more about estate planning & although that is important it is not at all ime the same path. And I’d look for one that either has a partner or associate that does tax law.

If this is a real & true business, her business has some sort of defined structure with required reporting. So like if it’s an “S” Corp gonna be annual report filed with the Secretary of State and then a biz tax filing to IRS with a K-1 document & state biz taxes filed. Then she includes the P&L info into the personal tax filings. If she’s K-1 100% then whatever is owned by the business is essentially and eventually all hers and hers as an asset and an asset that has a value. LLCs too have their own required reporting. Ditto for partnerships. If she’s more casual self employed so its a DBA type of biz, it’s tied to her SS# so it should have been in her 1040 & whatever other IRS form needed to do her 1040 and for years.

The biz has a value and the value is an asset. It can be a negative asset but it’s imo going to need to be determined way way in advance by the biz CPA and verified over time in old tax filings, BEFORE anything Medicaid ever applied for. Medicaid looks at all the assets held by the couple not just the husband applicant. She can have her own assets but there will be a ceiling on the amount. Tends to be 129k for the community spouse (the wife as she’s staying living in her community). I’ve got to tell you, the Medicaid maze for couples is not a DIY in general AND for a CS who has her own business it’s gonna be a super maze. She needs to get all her old stuff from her CPA & find a CELA level of elder law attorney and let them come up with suggestions as to how feasible Medicaid might be.

whatever she does, please pls pls discourage her from doing anything now is a fit of fear / pique. Like do not just move a chunk of $ from joint acct to business acct. Stuff like this just ends up red flagging the hubs application as they will need to submit 3-5 years of all statements.

Dealing with all this right now is kinda great timing, as she can get on establishing value of the asset within the financials pulled together to do biz taxes due mid March.
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I would advise your friend to invest in a 1 or 2-hr consult with an elder law attorney/estate planning who has experience with Medicaid, as there is much she needs to know and the Medicaid app qualification can have a "look-back" period of up to 5 years. She does not want to ever risk delaying or not qualifying at a time now or in the future when she will really be in need of it. She needs to have her legal and financial ducks in a row before she applies AND she needs to understand what it means to be a Medicaid recipient in terms of in-home care vs. facility care. I do not think Medicaid will pay for 24/7 caregiving in the home forever so she needs to understand how to plan. In some states Medicaid will pay for AL and not in others. She needs to be informed so she can make the best decisions moving forward.
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