With nursing home costs in a seemingly endless upward climb, it would be easy to surrender to the belief that few of us will ever be able to get the care that we need as we grow older and more infirm. That would be a frightening thought, especially when you consider that some experts believe that half of us will eventually find ourselves in need of some sort of long-term care. There is good news, though: the Medicaid program can help to cover the high cost of nursing home care – if you can qualify for the benefits you need. To ensure that Medicaid benefits are there when you need them, you should begin planning for eligibility early.
Before we get into the importance of planning, it might be helpful to answer one of the most commonly-asked questions we hear: why Medicaid? Many seniors who’ve been fortunate enough to never need any type of public assistance during their working years are often shocked to discover that they might need to rely on a means-tested government program in their retirement years. They’re usually even more shocked to discover that the Medicare they paid into their entire lives offers virtually no assistance when it comes to long-terms care.
Instead, they need to rely on Medicaid, which provides health insurance for low-income Americans of all ages. If they qualify, the program will pay for their nursing home expenses, enabling them to receive the extra medical attention and care they need. Of course, that’s sometimes easier said than done, especially in case where those seniors failed to plan for Medicaid eligibility in advance.
How Can Planning Help?
To understand the importance of Medicaid planning, it’s helpful to understand what can happen when you don’t plan. if you suddenly find out that you need long-term care of the sort that a nursing home can provide and you don’t have a plan in place, you could end up in a situation where your income and assets make it even more difficult to meet the program’s strict guidelines for eligibility. As mentioned earlier, Medicaid eligibility is based on your income and assets, and you’ll fail to qualify if you’re even one dollar over the limits.
Of course, you could also find yourself in the uncomfortable position of needing to use emergency strategies to gain access to those benefits – and that could prevent you from preserving any of your wealth. Instead, you’ll have to spend-down wealth to get rid of it, which can leave you in a position where you’re unable to secure any assets to pass on to your heirs. In short, you’ll have to impoverish yourself just to get your nursing home bills paid. That would leave you dependent on the government, and unable to leave behind even a modest legacy.
When Should I start Planning?
When it comes to Medicaid planning, you should begin your effort early, while you’re still working. While that might sound unrealistic, it’s important to understand that there are several reasons for the early start:
- You don’t know when you’ll need nursing home care. Few people are given five years’ notice of that need, and that’s what you need if you want to be able to protect your assets without worrying about triggering the Medicaid five-year look-back penalty.
- The earlier you start, the surer you can be that your assets are properly organized to protect them from Medicaid’s watchful eye. That can enable you to preserve more of your wealth and keep it from being used for nursing home bills.
- Early planning also ensures that you’ve properly cared for your spouse and children. That makes it an important part of your legacy planning as well.
- When you plan early, your Medicaid planning can be one more component in your comprehensive estate planning effort – rather than an emergency plan that you throw together weeks before you need to enter a long-term care facility.
What Planning Options are Available?
Early Medicaid planning provides you with the widest possible array of options for securing your wealth and the benefits you’ll need in the future. For example:
- Asset transfers can include gifting strategies that enable you to give your heirs their inheritance while you’re still alive – reducing your estate’s value and providing you an opportunity to see how that wealth improves their lives.
- You can use irrevocable trusts without fear of triggering Medicaid penalties. You can even convert assets to income-generating assets, and have the trust provide you with regular stipends.
- You can arrange your income in a way that enables you to meet the program’s guidelines. If you wait until later in life, your only option for reducing income might be the Miller trust – which results in excess income being turned over to the nursing home as partial payment of your bills.
Can an Attorney Help with Medicaid Planning?
An experienced estate planning attorney is your best option for securing the Medicaid benefits that you need. While many seniors simply try to rearrange their estates on their own later in life, that can result in tragic consequences. More than one elderly planner has made mistakes that left him ineligible for Medicaid and devoid of the resources needed to pay for care on his own. The planning process has many pitfalls due to the complex laws that govern the program. To avoid those legal hazards, you need the assistance of someone who specializes in this area of law.
With an attorney on your side, you can ensure that your estate plan includes the sound Medicaid planning you need to meet your nursing home benefit goals. At Kulas & Crawford, we can work with you to provide the early planning you need to secure your Medicaid benefits while preserving as much of your wealth as possible. Nursing home costs show no sign of going down any time soon. To protect yourself from their negative impact, you need the benefits that only sound planning can provide. To learn more and get started on your quest for Medicaid eligibility, contact us online or call us today at (772) 398-0720.