Why Plan for Medicaid?
According to the US Dept. of Health and Human Services, if you are 65 now, the likelihood that you will need long term care for some period of time is at 70%. This type of care is not covered by normal health insurance or Medicare products. So how will you pay for your care if you cannot take care of yourself?
The price tag associated with long term care can be as high as $8000 per month for a single room. Many will spend their entire retirement savings and empty their bank accounts to the detriment of their family’s future. Once the money runs out, who pays for the care?
When the hard earned savings and assets run out, most people turn to Medicaid to cover their expenses. In order to qualify for Medicaid to cover your care, you must reduce your assets and income to a very low level. When you spend and deplete your assets before you receive Medicaid coverage, this is called a “Medicaid spend-down.” However, there is another way. We work with you to plan for Medicaid and find ways to keep your hard-earned money.
Keep That Nest Egg
At Cape Fear Law, our experienced attorneys can help you plan by establishing a trust to hold your assets. With a trust, your assets stay safe.
You work with an attorney to name the trustee who will manage the assets for your benefit during your lifetime. Your family still inherits whatever you leave to them when you pass away.
It is possible to qualify for Medicaid and keep your nest egg safe from the Medicaid spend down.
Plan Early or Lose Out
Most senior citizens will need long term care for years, not months. A full 20 percent of today’s 65 year-olds will need long-term care for longer than 5 years. Medicaid planning is the best way to handle the expenses long term care will bring. If you want to take advantage of the benefits of a Medicaid Planning Trust, you must work with your attorney and set it up at least 5 years before you need Medicaid coverage.
Planning for Medicaid early is a proactive step to retain your wealth. Most of us work a majority of our lifetime to get where we are at retirement. If you are coasting through retirement and waiting until illness strikes to think about what to do, you have waited too long to make the best plan. Waiting until illness or a medical event leaves you in need can result in spending your assets down to qualify for Medicaid.
Setting up a Medicaid Planning Trust at least 5 years before you need care is the only way to keep those assets safe from a spend down.
Medicaid Planning is for Your Family’s Benefit
To qualify for Medicaid, you must spend down your assets on specific qualifying purchases within the five years before you apply. Giving money or assets to family members is a direct violation of eligibility requirements for Medicaid and will result in your ineligibility for coverage unless you do so before the 5 year period.
You can’t just give your money or home to your daughter during the 5 years before you expect to qualify for Medicaid coverage for long term care. A Medicaid spend down must be for your medical bills, which may include insurance premiums, prescription drugs, doctor visits, hospitalizations, and medical supplies.
However, there is no need for a Medicaid spend down. You can get Medicaid coverage and keep your assets safe for your additional needs and for your heirs. Medicaid planning allows you to keep your assets under your control by setting up a trust at least 5 years prior to needing Medicaid coverage for long term care.
You can keep your assets and receive income from them while in long term care. You can also plan to leave your additional assets to your family instead of paying medical bills. Proactively prepare for your future with a Medicaid Planning Trust.