In this Elder Law Minute, Wes Coulson discusses how to handle Medicaid rules when you own rental properties.
Hi! I’m Wes Coulson from Dent-Coulson Elder Law, proudly serving clients throughout the St. Louis metropolitan area and beyond. I’d like to welcome you to our Elder Law and Estate Planning Minute. We do these to help educate people, give them some little tips, and especially to let them know the questions they need to ask, things that they’ve maybe not thought of. Our thought on that is that we can help you best if you realize the things that you need help and that we can help you with. So I hope you enjoy. Thanks!
I want to talk today about Medicaid and rental properties. The short summary I like to tell clients who have rental properties is, Medicaid rules really hate people who own rental properties. A rental property is considered as a countable available asset, which means that either if you are a single, or widowed, applicant, you can’t have it at all. If you are the community spouse of an applicant, you can have it, but it takes away a big chunk of your asset allowance. And, not only is it an asset, it’s also an income source, and they count the income based on the gross income rather than the net. I don’t know if you’ve ever been a landlord, but tell you what, talk to a landlord and say “So, is your net rental income the same as your gross?”, and you’ll get this howl laugh like “not on your life”.
What we do from a planning standpoint is we’re looking to divest rental properties. If it is in a plan in which there is gifting done as part of the plan, that’s always a prime candidate to be gifted. Other than that, we may just say “you need to sell this” because it’s just not going to work to be able to keep it. Of course, the best plan is to back up from that and not own rental properties in a way that they would count as your asset if you ever needed to apply for Medicaid. This is another wonderful use of the irrevocable trust that we use a lot in this type of planning. Thanks!
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.