Hopefully, you already have at least a basic estate plan in place. If so, you are off to a great start. If your estate plan doesn’t include Medicaid planning, however, and you are already enjoying your “Golden Years,” you might find yourself facing a dilemma. If you suddenly need to qualify for Medicaid, and did not plan ahead for that possibility, your retirement nest egg might be at risk. That may prompt you to wonder if it is too late for Medicaid planning to help. The Medicaid planning attorneys at Kulas Law Group explain your last minute Medicaid planning options.
Why Might You Need to Qualify for Medicaid?
You may have made it through your entire working years without ever turning to the Medicaid program for assistance with healthcare coverage if you were covered by employer-sponsored or privately funded healthcare insurance. As a result, you likely know very little about the program, including the eligibility guidelines. Moreover, it may never have occurred to you that you would need to qualify for Medicaid so you certainly never thought about needing to include Medicaid planning in your estate plan. Now, however, you are faced with the need to cover the cost of long-term care in Florida. At a statewide average of over $9,000 a month, your LTC bill could wipe out a lifetime of savings in short order. Although you may now qualify for Medicare, the Medicare program won’t help with LTC expenses except under very narrow circumstances. Even then, Medicare only pays for LTC for up to 100 days. If you kept your private or employer-sponsored healthcare coverage the odds are very good that your coverage also excludes LTC costs. For over half of all seniors in your position, Medicaid is the solution. Qualifying for Medicaid, however, can be problematic if you did not plan ahead.
Medicaid and the “Look-Back” Rule
Medicaid is a federally funded and state-administered healthcare program for low-income individuals and families as well as the disabled and aged. Because the program is intended to assist low-income applicants, an income and asset threshold is used to determine eligibility. The asset limit is often as low as $2,000. If the value of your non-exempt assets exceeds that limit your application will be denied. Transferring valuable assets out of your estate when you realize you need to qualify for Medicaid is not an option because of the Medicaid five-year “look-back” rule. In essence, the rule allows Medicaid to review your finances for the previous five years. Any asset transfers made for less than fair market value could be flagged and cause Medicaid to impose a waiting period during which time you will be responsible for covering your LTC bill out of pocket.
Last Minute Medicaid Planning
Of course, it is also best to plan ahead for the possibility that you will need to qualify for Medicaid in the future; however, there are some perfectly legal last minute Medicaid planning strategies that may still be able to help you if you suddenly need to qualify and did not plan ahead. One common last-minute Medicaid planning strategy involves converting a non-exempt asset to an exempt asset. Medicaid exempts some assets when determining your eligibility. The list of exempt assets will vary by state; however, most states exempt a primary residence. If you have a significant amount of cash or a valuable investment account and you still owe on a mortgage, paying down the mortgage can convert that cash/investment account from a non-exempt asset to an exempt asset. It is definitely worthwhile to consult with a Medicaid planning attorney before applying for benefits to see what last minute Medicaid planning options may be available to you.
Contact Vero Beach Medicaid Planning Attorneys
To learn more, please download our FREE solid estate plan checklist. If you have additional questions or concerns about last-minute Medicaid planning, please contact the experienced Vero Beach Medicaid planning attorneys at Kulas Law Group by calling (772) 398-0720 to schedule an appointment.