According to the U.S. Department of Health and Human Services, about 70% of people who turn 65 will need some form of long-term care. Though this may come as a sad reality to some, planning for your long-term care is a priority that you should not overlook.
In the past, long-term care insurance was aggressively sold to people of all ages. Nowadays, fewer and fewer insurers offer LTC policies for their clients; those that do only offer these policies at increasingly high rates. This unfortunate situation leaves most people in the dark about how to plan for long-term care. With the growing number of citizens living well past the age of 65, there may not seem like that many options.
Don't give up hope just yet. If you can't afford LTC premiums but still want to plan for your future, you can utilize one creative source to offer relief.
Medicaid planning is an untapped resource that elders can use to prepare for their future while still caring for their family members. Using Medicaid as a form of long-term care payment may seem complicated, but with an elder law attorney and some careful planning, your assets will be set.
If you want to use Medicaid for your long-term care, you will essentially become asset-poor to qualify for Medicaid assistance. Don't be alarmed by the term “asset poor.” Using Medicaid as a financial backbone won't leave you and your family penniless down the road. In fact, your assets can still be maintained, but they won't be under your name.
What Does Medicaid Planning Entail?
To qualify for Medicaid your assets must be less than $2,000. Again, this does not mean that you suddenly lose everything you've worked for. It merely means that your assets shift to your designated beneficiary or a properly created trust.
You should also take note of the “five year lookback period.” When you apply for Medicaid your financial history for the past five years will be looked at to see if you transferred any assets during that time. If you have, you may be ineligible for Medicaid and could face a penalty period. Be sure to give yourself these five years before you need to qualify for Medicaid to use on long-term care. In the event you need to qualify for Medicaid within the five year lookback period, other strategies are available that will help you protect your assets from being depleted due to long term care costs.
You should also consider the vehicle by which you want to transfer your assets. Choosing the right way to transfer assets is vital for both the senior as well as the beneficiary. Think carefully about how and what to transfer, so you don't incur additional costs down the road.
How Do I Start Medicaid Planning?
The first logical step in beginning your Medicaid plan is to enlist the help of a licensed elder law attorney. Your attorney may also bring in the advice of a financial advisor and accountant if they see fit.
A qualified elder law attorney is well-versed in the laws surrounding Medicaid and how to properly qualify. Congress continually changes legislation regarding Medicaid, so to be sure you have the most up-to-date information it's wise to talk to an attorney.
Don't hesitate to start your plan. The earlier you can get your affairs in order, the smoother your transition will be. For all questions regarding elder law and Medicaid planning, speak with a reputable attorney with Heritage Law Office of Wisconsin. We are dedicated to providing you with the knowledge to properly handle elder laws and prepare for long-term care. Contact our office at (414) 253-8500 for a free case evaluation today!