You may reach a point in your life where your health has declined and you should plan for your future care needs. There are many options available to you, including in-home, assisted living, and nursing home care. This can cause significant financial stress for you and your family. In the face of an unexpected event, most people have to pay for nursing home care out-of-pocket. They are eligible for Medicaid after exhausting almost all their resources. It doesn’t have to be that way. When you are healthy, it is the best time to plan for such things. Medicaid planning can help you pay for long-term care as well as protect your assets for loved ones.
Medicaid is the largest payer for nursing home bills in America and provides medical assistance to those with low incomes. This joint federal-state program requires that your assets and monthly income be below certain levels in order to be eligible. Recent restrictions on Medicaid planning were significantly tightened, making it more difficult to plan for Medicaid. Our elder law lawyers can help you devise different strategies to protect your income and assets.
Exchanging your countable assets with exempt assets may be an option to provide support for loved ones. Countable assets refer to assets that are not exempted by state law. Exempt assets could include your house, automobile, burial insurance, or car. Instead of spending your savings on care, you can pay off your debt or buy a car to reorganize your finances and make your assets inaccessible to the government.
You can buy an income annuity for your spouse if you are married. When applying for Medicaid, the assets of a couple are often grouped together. To provide for their children, the community spouse (healthy spouse), may use countable assets to buy an annuity immediately. This annuity will not be combined so the institutionalized spouse is more likely to qualify for Medicaid. This allows each spouse to keep their own income by converting countable assets.
You may also consider creating an irrevocable trust to fund your long-term care. These trusts can’t be modified or terminated. Name a beneficiary to ensure that the trust is considered for Medicaid purposes. This strategy is only effective if these trusts are in place for a specified time.
These are just a few of the options available to protect your assets for yourself and your loved ones. Medicaid planning can be complicated and comes with many risks. A skilled elder law attorney should discuss these issues with you.