Medicaid Planning

Medicaid PlanningWhat Is Medicaid Planning?

Medicaid planning is how to protect your money if you have to go into a nursing home. Otherwise, the government takes all your money before Medicaid will pay for the nursing home expenses.

The Problem

Medicaid was intended to provide health care insurance for the poor. Because of a lack of any other affordable option, it has become the long term care insurance for much of the middle class. There is much argument regarding the legality and the ethical issues surrounding the issue of posturing one’s estate to qualify for Medicaid, while preserving some assets for either the surviving spouse or one’s children.

With long-term care insurance costing an additional $2000 per year and up, IF the patient can qualify, Medicaid has become the only other option for many Americans. Congress is constantly debating the ethics of the practice of deliberately disbursing one’s estate to qualify for benefits. There is currently a “look back” penalty of five years imposed on any individual who gives away money or property to be eligible for Medicaid.

The Strategy

Medicaid eligibility varies from state to state, while basic federal minimum standards and guidelines remain the same. Total assets and monthly income must fall below certain thresholds to qualify for Medicaid benefits.

The art of estate planning to qualify for Medicaid seeks to accomplish the goals of sheltering countable assets, preserving some for your loved ones, while providing for your healthy spouse if you are married. Knowing which assets are exempt and which assets are countable is key to formulating the best strategy. Other documents such as irrevocable trusts and annuities may be helpful, but seek the advice of an attorney who is well versed on the subject. A good estate planning attorney can guide you in choosing the most effective strategy for your particular situation, to be in compliance with current law.