Medicaid planning is important because you may need to qualify for Medicaid and may be unable to do so if you do not have a plan in place. Medicaid is a means-tested benefit, which means if you have too many financial resources, you will not be able to get covered by the program. This could be a big problem because Medicaid may be the only source of payment for the costs of a nursing home or for the costs of long-term care services provided in your home.
As you get older, the chances you’ll go into a nursing home rise. In fact, Wall Street Journal indicates that around 70 percent or more seniors who are 65 or older will end up requiring nursing home care at some time during the remainder of their lifetimes.
Medicare typically will pay nothing for the routine nursing home care most seniors need even though the costs total thousands monthly. Medicare Advantage and private insurance plans also don’t cover nursing home care either in most circumstances, and long-term care insurance policies can be prohibitively expensive and impose coverage limitations that make them impractical. Because of this, it’s important to ensure that you make a Medicaid plan.
Nirenstein, Horowitz & Associates can help. Getting legal advice from our firm is advisable so you can avoid mistakes in Medicaid planning, including some of the following common mistakes.
Mistake: Waiting too Long to Make a Medicaid Plan
While you may assume that you can wait until you are older to make a Medicaid plan to cover your nursing home care, this is not necessarily the case. Medicaid has a five year lookback rule which involves a review of your finances in the five years before the time you need Medicaid to cover your care costs. If you transferred assets during the five year lookback period, you can be disqualified temporarily from getting Medicaid to cover your care costs. You don’t want to wait until it is too late to take steps to keep assets safe.
It’s also important to realize that its not only very old people who end up in nursing homes. You could suffer an unexpected illness or injury at any time that leaves you unable to live independently and that necessitates you move into a nursing home or get long-term care care at home. You’d want Medicaid to cover the costs of this care and could face problems getting covered if you haven’t yet put a Medicaid plan in place.
Mistake: Transferring Assets Directly to Loved Ones
Many people mistakenly believe if they give their property away to their kids or other loved ones, they won’t have to worry about getting Medicaid since they will no longer own the property. Unfortunately, this is not true. Giving assets to your kids (or to anyone else) or selling assets for much less than fair market value could result in disqualification from Medicaid for a period of time under the five year lookback rule.
Even if you are making plans well in advance, you also may not just want to directly transfer assets. There could be risks by doing so, such as your children getting divorced or going bankrupt after you’ve transferred your own wealth to them. You may prefer to use tools like trusts instead of a direct transfer to try to minimize the risks.
Mistake: Using the Wrong Legal Tools
There are different kinds of trusts and legal documents you can create and if you choose the wrong one, you won’t get expected protections. Many people believe that a living trust will protect assets and allow you to qualify for Medicaid, for example, but this is not the case. An experienced attorney can help you to understand the legal tools that will actually work to keep your wealth safe.
Getting Help from a Medicaid Planning Lawyer
A Medicaid planning lawyer at Nirenstein, Horowitz & Associates can provide personalized assistance with the creation of a Medicaid plan. We can help you to determine if you need to make a plan and what tools you can use to protect as much of your wealth as possible.
We provide assistance with crisis planning when you need Medicaid coverage soon and have not put advanced plans in place and we also provide help with making a plan in advance of the time you need care so you can protect the maximum value of assets.
To find out more about how our legal team can help you with the Medicaid planning process, join us for a free seminar . You can also give us a call at 860-548-1000 or contact us online to talk with an attorney about getting your personalized plans underway.
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