Medicaid planning is the process of using available legal tools to protect your assets while ensuring that you are able to qualify for Medicaid coverage for nursing home care. Medicaid pays for a nursing home for those who cannot live on their own. However, Medicaid is means-tested and it is a needs-based program. This means that anyone who wants to try to qualify for Medicaid coverage has to have limited income and few assets. This can be a big problem for seniors who have worked for their whole lives to build up a legacy.
Medicaid planning is a solution. With the right plan in place, you can keep your nest egg and leave your assets to your heirs, while getting your nursing home care covered. Medicaid planning cannot wait, though, because there are some time-sensitive issues associated with implementing your plan and maintaining eligibility.
Unsworth LaPlante, PLLC can provide invaluable assistance to clients with the Medicaid planning process. Call today to speak with an Essex Junction estate planning lawyer with experience in helping clients protect their assets while qualifying for Medicaid nursing home care coverage.
Top Reasons to Start The Medicaid Planning Process Today
The Medicaid planning process involves transferring assets to a trust so those assets do not count against you when determining if you are eligible for Medicaid coverage. The process can be complicated as you need to ensure the trust is the right type of trust, that it meets all legal requirements, and that the right assets are transferred into it.
When you transfer the assets into the trust, the trust owns them- not you. Medicaid, therefore, won’t expect you to spend the assets before giving you nursing home coverage. The assets owned by the trust also won’t be at risk of being taken as part of Medicaid estate recovery efforts, which involve Medicaid trying to recoup some of the money it spent on a person from the individual’s estate after that individual has died.
The benefits of Medicaid planning are clear, and there are a few key reasons why you should start the process now and not wait:
- Nursing homes are astronomically expensive. According to Wall Street Journal, nursing home costs in large cities routinely top $100,000 per year. The cost of an average semi-private room in a nursing home facility is more than $72,000, based on estimates from Health and Human Services. If you do not have a plan to protect your assets and qualify for Medicaid coverage of nursing home care, even a brief stay in a nursing facility could destroy your financial stability by taking huge sums of money from you.
- There is a very real risk of ending up in a nursing home. By the time an American is 65 or older, his or her chances of entering a nursing home at some point are significant. A total of 40 percent of people 65 and up will end up in a nursing home and 20 percent will be there for five or more years. Overall, more than 70 percent of senior Americans end up needing nursing home care at some point over the course of their lives.
- Most insurance policies, including Medicare, do not cover nursing home care. While insurers will sometimes pay for a brief period of time in a nursing home facility for things like rehab after a surgery or after an accident, insurance generally doesn’t pay for you to live in a nursing home long-term. Only Medicaid will eventually pick up the tab- but you have to have spent almost all of your money by the point Medicaid steps in… unless you’ve planned ahead to be eligible.
- You could be disqualified from Medicaid coverage for transfers of assets. Transferring property or money into a trust is considered a transfer of assets. Medicaid is strict about preventing people from transferring assets to get nursing home care covered. Any transfer of assets within five years of the time nursing care is needed can result in a waiting period for coverage. This is called the five year lookback period. If you try to move money into your trust (or otherwise transfer it) and then apply for Medicaid nursing home coverage within five years of the transfer, you’ll be disqualified for a period of time determined by dividing the amount of the money transferred by the average monthly cost of nursing home care in your area.
Medicaid coverage for nursing care can be a financial lifesaver, so it is important to avoid some of the mistakes that could prevent you from getting your nursing home bills paid.
How an Essex Junction Medicaid Planning Lawyer Can Help
You never want to put your family’s financial security in jeopardy, especially when there are simple steps you can take to avoid doing so. Don’t wait until it is too late and you are forced to spend down your assets and reduce your children’s inheritance. Contact Unsworth LaPlante, PLLC today to speak with an Essex Junction medicaid planning lawyer who will help you to put a strong, effective plan in place.
- How to Apply for Senior Medicaid in Vermont - December 11, 2022
- Planning for the “Silver Tsunami” - November 1, 2022
- Discharge of Indebtedness Income and Student Loan Forgiveness - October 27, 2022