If you’ve seen the news over the last several years, then you are almost certainly aware that nursing home costs across the nation have continued to rise. The situation is no different in the state of Florida, where our residents are often hard-pressed to manage the costs of their own long-term care. For many seniors and their families, a sudden need for nursing home care can quickly eat through savings and leave them in dire financial straits. In most instances, however, those sad consequences could have been avoided with the right planning effort. Of course, that raises an obvious question: when should you start your own nursing home planning?
That question has never been more important as continued cost increases are pricing far too many seniors out of the nursing home market. Today, the average senior in the state of Florida can expect to pay somewhere between six and eight thousand dollars a month. Those kinds of prices are far more than seniors can afford, even in instances where their entire families try to pitch in and help with the costs. That leaves most seniors with no choice other than to rely upon Medicaid benefits to cover the costs of their long-term care.
Waiting Until the Last Minute
One of the easiest ways to understand why you need to plan at all is to look at what can happen when you don’t. All too often, people simply wait until they know they need nursing care to take action. Then, after they review their finances and realize that there is nowhere close to enough wealth in their estate to pay for more than a year or two of long-term care, panic sets in. At that moment, many realize that only Medicaid can cover their costs.
By then, though, it is too late to become eligible for Medicaid if they assets that place them above the eligibility limits. So, in order to qualify for the program, they first have to spend virtually all of their savings to get below those limits. And what does that mean? It means that they have no way of passing on a financial legacy to their children and other loved ones. It means that they have to basically impoverish themselves before they can receive any assistance paying for their care.
Obviously, there has to be a better way.
Why You Should Plan Ahead
The fact is that you almost have to plan ahead if you want to ensure that your eligibility for Medicaid benefits will be secured. Because Medicaid is a needs-based program, and must conform to both state and federal guidelines, there are strict requirements in place to ensure that the program helps only those who need it. If you’ve spent a lifetime saving and investing, but have not managed to be one of the lucky few who amasses a small fortune, chances are that you won’t be prepared to cover the costs of nursing home care on your own. At the same time, however, you won’t be poor enough to qualify for help.
That situation can be avoided with careful planning to ensure that your assets are managed in a way that secures eligibility. It requires spending down assets over time, so that they are not counted for eligibility purposes when that time comes. It also requires you to act early to avoid penalties and any unexpected period of ineligibility during which you would have to pay for your own care.
Medicaid Planning
Medicaid planning is the process used to develop a strategy that can protect your assets and ensure that you avoid being impoverished even as you make yourself eligible for program benefits. The goal is to secure assets in a way that puts them beyond Medicaid’s reach, so that you can get the help you need and still have access to your individual savings account. That goal also includes positioning you so that you can quickly gain the benefits you need so that there is no delay in care coverage.
Can You Do This On Your Own?
One thing is clear: planning for Medicaid eligibility can be a minefield for the average person. There are so many pitfalls involved in asset transfers and account management that most people cannot help but leave themselves vulnerable in one manner or another. And despite what some may believe, it is never as simple as just transferring your wealth into someone else’s name. In fact, that approach often leads to the very penalties that can make you ineligible for the benefits you need.
Remember, Medicaid has what it calls a “five-year look-back” period. The program can examine your asset transfer in the five years preceding your application for Medicaid and count any assets you removed from your estate as part of the total amount of wealth it looks at when determining your eligibility. That means that if you transferred $100,000 worth of assets two years before you applied for the program, Medicaid could treat that wealth as though you still have it – and that would result in a denial of eligibility.
When Should You Begin to Plan Then?
The reality is that it is almost never too early to begin your nursing home planning. At a bare minimum, you should begin to think about strategies for ensuring eligibility well before that five-year period. Many experts recommend early planning as part of a more comprehensive estate planning strategy, to ensure that your affairs are in order throughout your adult life.
At Robert Kulas Attorneys at Law, we have the estate planning experts you need to develop the perfect nursing home planning strategy for your situation. We’ll work with you to safeguard your assets so that you don’t have to lose everything just to receive Medicaid benefits, and help you to ensure that your heirs can still enjoy their inheritances. To find out more about why nursing home planning should begin as early as possible, contact us online or call us at (772) 398-0720 today.