Crisis Planning is appropriate when the client is in need of immediate financial relief from long-term care services already being provided or about to be provided. In short, Crisis Planning occurs when the client either never previously engaged in any Pre-Planning strategies, or the Pre-Planning strategies did not work properly (for example, the client needed long-term care prior to the end of the 5-year lookback period, or ran out of LTCI benefits).
There are various Crisis Planning strategies, the use of which are dependent upon the client’s assets, income, and marital status. A married couple, for example, may have more Crisis Planning options available, as they are allowed to keep much more in countable assets than a single individual. These strategies involve spending down countable assets in order to financially qualify for Medicaid benefits to assist with long-term care costs.
The Crisis Planning tool most utilized by agents and advisor might include the Medicaid Compliant Annuity (“MCA”) which irrevocably turns countable assets into an income stream, and is appropriate both in married couple situations and single person situations. Additionally, a single premium whole life insurance policies and funeral expense trusts that can be utilized to further spend-down the client’s countable assets.
Other methods may include improvements to exempt assets, such as home improvements or a new vehicle, or the purchase of additional personal items, such as a new television or jewelry.
An elder law attorney must be involved in all Florida insurance product purchases if used for Medicaid planning purposes, pursuant to this advisory opinion.