Knowing Medicaid stategies is important to plan for medical care expenses
Medicaid Planning Strategies
Though it may seem impossible, there are ways to plan ahead for Medicaid. Most people believe they have to rid themselves of all income and assets in order to receive benefits, but this is not always true. These strategies will help you plan for the future so your medical care expenses will be covered.
Planning for Nursing Home Costs
It is said that the average stay in a nursing home is 30 months. The cost can range between $3,000 and $5,000 per month or $90,000 to $150,000 in total. This is why it is so important to plan ahead. The financial burden can be massive if proper planning is not done. The Medicaid eligibility requirements are based on the need for medical care as well as the individual’s financial situation. Since the program is controlled by the state government, each state may have different eligibility guidelines. Assets and income will always be the most important eligibility factors. In most cases, almost all of your savings and assets will have to be depleted to become eligible.
Estate Planning and Medicaid
To properly plan, it may be best to consult with an elder law attorney or contact us UltraTrust.com. They will know what the exact requirements are and can help you with planning strategies. Always remember that your children are not entitled to your money. That is a personal choice. Estate planning is designed to help you decide how to spend your money instead of having the decisions made for you.
Medicaid and Asset Transfers
Most people believe they can transfer assets to a loved one in order to qualify for Medicaid. There is a rule that has been put in place to try to deter this from happening. It is called the look back period.
Look Back Periods in Medicaid Planning
There are two forms of this. The first one involves the transfer of any assets before the last 36 months of applying for Medicaid called the 3-year look back. This rule creates a waiting period for those looking to become eligible for Medicaid. Basically, unless the transfer of assets was completed before that 36 month period, you will not be eligible. The time period is based on the assets that have been transferred divided by the monthly costs of benefits from Medicaid. An example of this would be if you transferred $36,000 in assets and the cost of your nursing home care was $3,000. You would not be eligible for Medicaid for another 12 months.
The second form has to do with a period of 60 months (aka 5-year look back). This involves transfers of irrevocable trusts within that time period. An exception is that asset transfers to a spouse are allowed. The formula for determining eligibility will take into consideration the assets of both spouses.
Irrevocable Trusts for Medicaid Eligibility
This is a trust that cannot be changed by the individual who created it. This asset would be included in all Medicaid eligibility formulas. These kinds of trusts are not useful when planning for Medicaid. The irrevocable trust is subject to the 60 month look back period. The funds of the trust are eventually paid to the beneficiary, but any income from the trust may be used to pay for living expenses of the grantor. This includes the costs of nursing homes. It is also possible to place real estate into these trusts, but you should be aware that once this s done, you lose control over the property.
Complexity of Medicaid Planning
These examples should provide you with reasons to plan ahead for Medicaid. If you are incapacitated due to injury or illness, a Power of Attorney or a Living Trust can help to ensure that your plans are carried out. It is advised to plan for Medicaid with the assistance of an elder law expert or contact us UltraTrust.com (Estate Street Partners). You have one shot at submitting an application form to Medicaid. Do not submit it until it has been reviewed by an expert – it could cost you tens of thousands of dollars.
Get Help on Your Medicaid Application
Don’t apply for Medicaid alone. You only get one chance to submit your application the right way – so make sure you do not make an error that could cost you hundreds of thousands or make you ineligible altogether. Contact Estate Street Partners for information on how you may be able to save hundreds of thousands by properly filling out your Medicaid application today: Wouldn’t you rather give your heirs your life savings that you worked so hard for, then the overpriced nursing home? Call us toll-free now: (888) 938-5872.