When you plan ahead for retirement, you probably think about the active, golden years. This period of time can be quite enjoyable if you take the right steps along the way. At the same time, you should also consider the twilight years that will follow.
According to a government agency, a significant majority of senior citizens will eventually need help with their day-to-day needs. Medicare will not pay for long-term care, but Medicaid will cover these costs if you can qualify.
In this post we will provide some facts about Medicaid planning and Medicaid recovery.
Measured Divestitures
Medicaid is a need-based program. There are income and asset limits that you must stay within if you want to qualify for coverage.
You could give away assets to qualify for Medicaid. Many people essentially give their children inheritances in advance.
It would be logical to take a wait-and-see approach. You could hold on to your assets and give them your children if and when you find out that you need long-term care, right?
Unfortunately, things don’t work that way. The Medicaid program does not want you to find out that you need long-term care on Monday, give away your assets on Tuesday, and apply for coverage on Wednesday.
There is a five-year Medicaid look-back period. If you give away assets within five years of applying, your application will be denied at first. You will be deemed ineligible for a period of time that is tied to the amount of the divestitures as they compare to the cost of long-term care in Connecticut.
If you do engage in a Medicaid spend down, you have to act in advance because of the look-back.
When you are divesting yourself of assets with future Medicaid eligibility in mind, you do not have to worry about the value of your home. You can obtain eligibility while retaining ownership of your home, but there is an upper equity limit of $814,000 in Connecticut in 2014.
If there is a healthy spouse remaining in the home, there is no equity limit at all.
Though your home will not preclude you from eligibility at first, you do have to consider the matter of Medicaid recovery. The program is required to seek recovery from your estate if you used Medicaid to pay for long-term care. If your home is part of your estate when you pass away, it could technically be targeted.
However, there are steps that you can take to divest yourself of personal ownership of the home. It should be noted that many states are not especially aggressive when it comes to Medicaid recovery efforts, but you should still take action to make sure the property stays in the family.
Free Medicaid Planning Consultation
If you would like to discuss Medicaid planning with a licensed attorney, contact us through this link to request a free consultation: Hartford CT Medicaid Planning.
