Medicaid planning must be a part of an effective and comprehensive estate plan for the majority of individuals. Because Medicaid planning must be done well in advance of the time when care will be required, you should not hesitate to speak with an experienced legal professional about this important issue.
What Is Medicaid Planning?
Medicaid is an insurance program for those who have a financial need. The government pays for medical services for Medicaid recipients. In addition to paying for doctors, drugs, and other medical treatments, Medicaid also pays the bills for nursing home care.
Nursing home costs can be upwards of $100,000 per year, especially for seniors who suffer from dementia and who need round-the-clock care in a secure facility. Few people can pay for this care out of their own assets, at least not without depleting their entire savings and everything they have worked for their entire lives. Medicaid will pick up the bill, but because it is a means-tested program, Medicaid only takes over after seniors have already spent down their assets. This, essentially, means that you must impoverish yourself and lose the legacy you hoped to leave behind for your heirs before Medicaid kicks in.
Not only can Medicaid require you to spend money for your own care before beginning to pay for your nursing home, but the estate recovery process which takes place after your death can also result in the government coming after any money or property you managed to leave behind for those you love.
Medicaid planning can help prevent the required spend-down of assets and the loss of assets, allowing you to leave gifts behind to those you love. Medicaid planning involves strategic transfers of the ownership of assets so you do not "own" money or property that you will need to cash in before nursing home care is covered.
Why Do I Need To Start Early?
Medicaid planning is most effective if it is done long before you actually need the government to start picking up the cost of long-term care or other expenditures. This is because there is a five-year look back period. When you try to apply for Medicaid to cover you for long-term care, the government looks back at transactions that have occurred within the last five years. If you have given away money, assets, or any property, you will be disqualified from Medicaid coverage for a period of time. The specific length of time you're disqualified depends upon the cost of nursing home care in your area and the amount of assets transferred.
That doesn't mean it's too late to save your estate, but it does mean you need to begin now - before you need Medicaid - to protect all of your property you have worked so hard to acquire and leave to those you love. Medicaid planning should be done with the help of a legal professional who can advise you on the creation of a trust and the transfer of your assets.
If you're ready to start planning for Medicaid and protect your legacy for the people you love, contact Price and Price, LLC, South Jersey's leading elder law firm. Call us at 866-270-3513 for more information.