Early Medicaid Planning Saves Money
Most people don’t like to think about the possibility that they may need to live in a nursing home one day. However, as we grow older nursing home care often becomes a reality. One of the most common ways to pay for nursing home care is through Medicaid. Many of our clients worry that they will be financially devastated by the high cost of care or that they will be forced to spend all of their assets before they can qualify for Medicaid. But those who plan ahead can take some important preplanning steps that will prevent financial hardship in the future.
The first important step in pre-Medicaid planning is creating a good estate plan. This includes executing a power of attorney, an advance medical directive, a will, and, if it applies to your situation, a trust. Having an estate plan helps to clarify what your wishes are if you die or become incapacitated.
Another part of the preplanning process is to see if long-term care insurance is an affordable option for you. While many believe that long-term care insurance is too costly, it is often not as expensive as people think and is a great way to get the care you need while protecting your assets for your family.
An additional step you can take is to execute a Medicaid Asset Protection Trust. This trust protects your assets so that they are not taken into account when you later apply for Medicaid. Once your assets are in the trust, all of the income from the assets can be paid to you and your spouse during your lifetimes. Once you and your spouse have passed away, the trust terminates and the remainder of the assets in the trust passes to your children or to whomever you chose to inherit from you after your death.
Medicaid asset protection trusts are a great option, but like anything, they may not be right for everyone. Gifts to the trust can result in penalty periods that can cause ineligibility for Medicaid for a certain period of time. Also, because the trust is irrevocable and is designed to shield your assets, neither you nor your spouse will have access to the assets in the trust. However, your children or another family member may access those assets.
In order to ensure that you are taking the preplanning steps that are the best for you and your family, it is important to consult with an experienced elder law attorney. The possibility that you may need to apply for Medicaid benefits is not a pleasant one, but those who are financially prepared for the future will be able to live comfortably as they age while still being able to receive the care that they need.
