You may know that Medicaid can help cover long-term care costs. And, you might know that for this coverage, you should have few assets. To reach that point, you can use estate planning to protect your assets and get Medicaid’s help for your long-term care costs.
Long-term care is a living facility that assists with daily activities and provides medical treatment in some cases. For the majority of people who need this support, it comes at an inopportune time. The crux is that it is usually needed by elderly or retired people who are on a fixed income. Furthermore, the prices associated with this need are significant.
To make matters slightly more complicated, this is a need, not a want.
Planning Now for Long Term Care Needs Later
There are three ways in which most people pay for long-term care. The first is with their own money or assets, through Medicaid or with a long-term insurance plan. Today, we are going to focus on Medicaid—which can be obtained through deliberate estate planning.
Estate planning uses many strategies to protect your assets, to ensure your heirs inherit in the way you intend, and to provide documents needed so your health and financial matters are handled according to your wishes even when you are incapacitated. However, you may think it can’t help you when you have a lot of assets later in life and would like Medicaid assistance to cover your long-term care costs.
The challenge some people face is that even though Medicaid is a method that people can use to pay for some of their long-term care expenses, they do not qualify for it. If you fall into this category, you may believe you have to “spend down” your assets so you do qualify. Avoid making rash decisions about this before you learn more about estate planning options.
In general, you must have less than $2,000 designated or earmarked for a legitimate expense to qualify for Medicaid. All that means is that if you have $10,000 total, at least $8,000 cannot be used freely. Perhaps that $8,000 is going to your property taxes or maintenance on your home—which leaves you with $2,000 of available funds.
Don’t Assume You Must Get Rid of Assets for Medicaid Help
When people are pressed for time or feel backed into a corner, they may make hasty or rushed decisions. You should avoid this impulse. The first and biggest mistake you could make is giving away your assets to get yourself down to $2000.
Not only will you lose your assets that you give away — which you spent a lifetime building — but you will likely not qualify for Medicaid. This is because Medicaid prevents you from giving away your assets in that way. There is a Medicaid “look-back period” of five years. If, for example, in less than five years before you applied for long-term care assistance, you sold your house to your son for $1 just to get your name off the title, you will have problems.
The good news is that you can protect yourself and your assets at the same time with well thought out estate planning.
Learn How Estate Planning Can Help You Get Medicaid
Through proper estate planning, you will discover that there are many ways in which you can protect your assets and afford the long-term care you need. For instance, you can create a trust that will effectively own your assets. When done correctly, these assets will no longer make you ineligible for Medicaid. In addition, it won’t have negative repercussions during the Medicaid look-back period.
If you have further questions regarding estate planning, contact our estate planning attorney the Amsberry Law Firm for a free consultation.
Attorney Russell J.G. Amsberry
Attorney Russell J.G. Amsberry founded the Amsberry Law Firm in 1995 with the goal of providing clients with exceptional, focused representation on their issues. His success as a legal advocate has been reflected in the numerous professional honors he has received, such as speaking engagements and inclusion in Scene in SA magazine’s listing of the best lawyers in San Antonio, a Distinguished rating from Martindale-Hubble, and an amazing rating from Avvo. [ Attorney Bio ]
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