Estate Planning Law

6 Things You Need to Know About Medicaid Planning

Nursing home care is very, very expensive.  For a typical person in his or her later years, there is not enough income to cover nursing home expenses, particularly if the person’s spouse is healthier and still living at home.

To be able to cover the costs of a nursing home, you would typically rely on accumulated assets to cover the difference between the income available and the cost of the nursing home.  Even still, those accumulated assets can be used up rather quickly.   Thus, you might want to consider getting nursing home coverage under Medicaid.

The problem with using Medicaid nursing home coverage, however, is that your assets and income need to be low enough to qualify for the coverage.  Thus, some Medicaid planning is in order to so that you might be able to save some assets for a healthier spouse or children.

To do that, you would need to transfer assets to heirs prior to needing nursing home care or during your stay at a nursing home.  Those transfers may result in penalties, but by consulting with an experienced estate planning attorney, you can properly plan for needed nursing home care while still being able to protect some of the assets that you have worked your whole life to own and pass on to your children.

The expert legal professionals at Doane & Doane have been working with Medicaid planning issues for over a decade.  We understand your desire to take control of your long-term care needs, and we will help you set up a strategy that is just right for you and your family.  Call us to schedule an appointment with one of our top estate planning attorneys.  The consultation is free.  Call us at 561-656-0200.

In this blog, we will take a moment to talk about the 6 basics of Medicaid and Medicaid planning.  Be sure to contact us, however, to get more detailed information related to your specific circumstances.

#1   What is Medicaid?

We hear the term all the time.  It always comes up during elections, but many people are not aware of the specifics of what Medicaid is, or does.  Simply put, Medicaid is a government program for medical care that is provided based on a person’s needs.

Medicaid is commonly used to pay for long-term care.  That is because a different program – Medicare – does not last very long if you are in a nursing home.  Accordingly, for a long-term stay in a nursing home, either you would need to pay with your accumulated assets, or you can use Medicaid to pay for the care of your income and assets go below a threshold level.

#2   Should I Apply for Medicaid Coverage?

If you have some assets that you wish to protect for yourself, your spouse, or your children, then it might be wise to apply for Medicaid coverage.  Once you apply, you will find out whether you can actually obtain the benefit.  If so, then Medicaid will pay for long-term care, allowing you to preserve some of your assets.

#3   How Do I Apply for Medicaid Benefits?

As you can imagine with any government program, there is an application process involved when seeking Medicaid benefits, and the application process for Medicaid is a big undertaking.

You can find the application for Medicaid online.  Filling out the application itself is one part of the process.  In addition, the people evaluating your application will be looking for important financial information, including:

  • Bank records that go five years back,
  • Detailed current bank records,
  • Any deeds of property you own,
  • Lists of other assets you own,
  • A list of income sources, and
  • Whether you are the beneficiary of a trust.

In short, the Medicaid program needs to have a full financial picture for you in order to assess eligibility for benefits.  Thus, the application will take some time and effort.

#4   How Much Income Can I Make and Qualify for Medicaid?

While there are a number of qualifying exceptions and you should consult an attorney for specific information on Medicaid eligibility, the income you can make and still qualify for Medicaid is around $2,000 per month.  If you make more than $2,000 per month, that does not necessarily mean you are out of luck with Medicaid.  Talk to an attorney to find out what options you have based on your income.

#5   Would I Be Able to Transfer Assets to my Children Right Before Going into a Nursing Home to Qualify for Medicaid?

Generally, you would not be able to transfer assets right before going into a nursing home to qualify for Medicaid coverage of the nursing home care.  Medicaid does a five-year look back, which means that Medicaid eligibility will be based on your financial picture over the last five years.  If you transferred assets to your children today, you would generally not qualify for Medicaid for five years.

That said, if you only transfer a small amount to your children, and you don’t have much left, then the Medicaid disqualification period may be for only a short period of time.  There are also other exceptions that you can learn from consulting an estate planning attorney.

#6   Once I Am in Nursing Home Care, Is Medicaid No Longer an Option?

The fact that you are in a nursing home does not necessarily foreclose your ability to engage in Medicaid planning. Speaking with a seasoned estate planning attorney can help you understand whether, and to what extent, you may be able to transfer assets to a healthier spouse or your children even though you are already in a nursing home.  In short, there is never a bad time to consider how best to plan your estate and have a strategy for Medicaid benefits.

Let Doane & Doane’s Advanced Estate Planning Attorneys Help You Today

The entire world of Medicaid planning is a valuable option for you to explore if you believe that you will eventually need long-term nursing home care.  The Medicaid world, however, is full of pitfalls that require the need for sound legal advice.  We welcome you to call our attorneys at Doane & Doane at 561-656-0200.  It is a call that is good for both you and for your family’s future.  Call today.