People are living longer than before, and longer life spans can bring long-term medical issues. While “aging in place” is the goal of most seniors, the reality is that about 60% of people over 65 may face medical conditions that don't allow them to stay home. Many will require more medical care than a relative or home health care provider can give.
If you're at the point where you or a family member has to make the difficult decision regarding a nursing home, there is a lot to consider. The average cost of a nursing home in Wisconsin is approaching $9,000 per month. Even if you have the means to pay for it, it won't be long before your resources may be depleted.
Why Do You Need to Plan For Medicaid?
If you have assets, property and other things you were planning to leave to your spouse and family members, nursing home care may keep that from happening. Planning ahead with an estate plan that includes transfers and dispositions of everything before you have to apply for Medicaid will help preserve much of it for your beneficiaries.
If you apply for Medicaid with a considerable amount of funds, property and other assets, you'll be unable to qualify. Examining your current worth and ways to transfer assets ahead of time will make sure you're prepared when you apply.
What Does Medicaid Planning Involve?
If you are unmarried, one of the first things you'll need to do is become “impoverished,” with no more than $2,000 in countable assets. Medicaid also has limited your monthly income. This income limit is part of Medicaid's complex requirements to apply for the program, causing many people to not qualify. If you don't qualify, you'll have no choice but to pay out-of-pocket.
Planning for Medicaid involves multiple strategies, including various forms of trusts, gifting, annuities, and restructuring assets. “Spending down” assets should be done carefully, and preferably with your attorney's advice. Moving money and “gifting” should also be under your attorney's auspices to avoid running afoul to Medicaid rules.
Medicaid has a five-year “lookback period,” in which your entire financial life will be reviewed for anything that could be used to pay for your care. Assets sold or transferred within the previous five-year period could cause a Medicaid penalty period, and your qualification will be delayed. Despite the five year lookback period, elder law attorneys often time will employ a combination of asset preservation strategies to transfer or convert assets in a manner that can preserve the assets despite applicable Medicaid penalty periods.
How Can A Lawyer Help?
It's easy to make a mistake with your estate plan that you can't recover from. A lawyer who understands estate planning and elder law will be able to advise you in your specific situation and prevent mistakes.
An estate planning lawyer can help you with a will, trusts, gifts, and asset transfers that could eventually allow you to apply for and receive Medicaid to get the long-term care you need. Your wealth, property and assets will be preserved and your family's interest protected.
Contact one of our lawyers today in Wisconsin, Minnesota, and California.
Heritage Law Take Care of Medicaid Planning
The earlier you start planning for you long term care needs and positioning your life saving to qualify for Medicaid, the easier the process will be and the more money you will ultimately be able to preserve. For any questions on 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!
Frequently Asked Questions (FAQs)
1.What is Medicaid planning?
Medicaid planning involves creating strategies for managing your assets and income to qualify for Medicaid, which can help cover the costs of long-term care, such as a nursing home. The process can be complex due to strict Medicaid rules and regulations regarding income limits and countable assets, and therefore, professional legal advice is often recommended.
2.What is the importance of Medicaid planning?
With the average cost of nursing homes rapidly increasing, many people risk depleting their assets without proper planning. Medicaid planning allows you to qualify for Medicaid's long-term care benefits without exhausting your savings. It also ensures the preservation of your wealth for your family and beneficiaries, even after you receive Medicaid benefits.
3.What is the Medicaid "lookback period?"
The Medicaid "lookback period" refers to a five-year period before your Medicaid application date. During this time, all your financial transactions, including the sale or transfer of assets, are scrutinized. Any asset transfers made within this period without receiving fair value in return can result in a Medicaid penalty period, delaying your Medicaid eligibility.
4.How can an estate planning lawyer help with Medicaid planning?
An estate planning lawyer can provide valuable guidance for Medicaid planning. They can help devise strategies such as setting up trusts, gifting assets, and restructuring your resources in a way that aligns with Medicaid rules. They ensure you avoid common pitfalls that might hinder your Medicaid application, and they assist in preserving your assets for your family and beneficiaries.
5.When should I start Medicaid planning?
The sooner, the better. Early planning for Medicaid can help avoid penalties associated with the five-year "lookback period," allow for a smoother application process, and maximize the amount of wealth you can preserve. It's wise to consult with a Medicaid planning attorney as soon as you anticipate the need for long-term care. For personalized guidance, reach out to Heritage Law Office at (414) 253-8500.
