Revitalization of Promissory Notes as a Medicaid Planning Tool

Recent implementation of the Deficit Reduction Act of 2005 has resulted in Medicaid policies that are just now being utilized by the Elder Law Bar as a new planning opportunity for asset preservation for families with loved ones seeking long term care. This change was set forth in the ESS manual in January 2010. However, only until recently have elder law attorneys become comfortable using the promissory note as a planning tool (an earlier transmittal letter of the government had disallowed the use of promissory notes, effectively contending that notes were “countable resources”). There are however, some very strict guidelines that must be followed when implementing the “promissory note technique” for asset preservation.

We, at The Elder Law Firm of Clements & Wallace, P.L. believe that planners now have another arrow in the quiver for assisting families in asset preservation and meeting eligibility requirements for Medicaid when families are faced with long term health care needs.