LLC Ruling

There are many questions regarding the interplay between SSA benefits and business structure. Structuring your business is an important decision and a recent ruling regarding LLC's and assets could help in deciding the best entity if you are a medicaid recipient.

OGC has issued an opinion on the LLC issue. The bottom line is that:

1. When an LLC member has conveyed property to the LLC, the member does not have a co-ownership or a transferable interest in the property and the property is not a resource attributable to the member.
2. The fact that an LLC may choose to have the entity taxed as a partnership or sole proprietorship does not alter the fact that property conveyed to the LLC is owned by the LLC, not by any of its members.
3. Property owned by an LLC (and thus, not by any of its members) cannot be excluded under the PESS provisions as property that an individual owns and uses in a trade or business.
4. An LLC member's distributional interest in the LLC, like stock in a corporation, cannot be excluded as PESS and is a resource to the extent that it can be converted to cash and used for food or shelter.

If you have a business set up as an LLC, please be aware of the potential consequences of the LLC structure, including loss of Medicaid.

Any questions may be directed to: rsi5@srt.com