Articles Posted in Medicaid Planning

As we have discussed in other posts, planning for the eventual need for long-term care is a crucial element of any Houston estate plan. With the costs of nursing home care rapidly increasing across the country, more families are taking a proactive approach when it comes to deciding how to pay for these future costs.

For families with significant assets, the concern is not necessarily whether they can pay for the necessary care, but how they can limit the amount their own assets will go towards paying for the care. Thus, Medicaid planning is focused on how to strategically structure familial assets in a way that will enable the family member in need of long-term care to quickly and easily qualify for Medicaid while preserving their assets.

Medicaid is a needs-based program, and applicants must meet strict asset and income limits to qualify for benefits. One of the most important elements of Houston Medicaid planning is understanding these asset and income limitations. Applicants with excess assets or income will be required to “spend down” the excess before they can qualify for benefits. Of course, this can leave a spouse who is not in need of care in a challenging spot, because the money they need to continue to live independently may be diverted to pay for long-term care.

While Medicaid planning is a term often tossed around, not many people know exactly what the process entails. In general, Medicaid planning is any assistance provided to an individual in advance of their Medicaid application. These tasks widely vary depending on the needs of the person, but may include anything from collecting documents to restructuring assets. Medicaid eligibility is complicated and even a simple mistake in the application may result in being denied benefits. Because of this, people will often consult a Houston Medicaid planning attorney to help them with the process and ensure their family’s assets are maintained while their loved one receives the long-term care they need.

Reviewing Medicaid Eligibility

It is important for an individual to determine their Medicaid eligibility in order to have a full grasp of the potential benefits that they could receive. The consequences of being denied Medicaid benefits can be detrimental not only for the individual, but also for their family. The American Council on Aging provides a free eligibility status checker to determine eligibility.

As people age, it becomes even more important to plan ahead for unexpected illnesses and disabilities. While creating an estate plan may seem like enough, a life care plan can help to ease the stress that comes with taking care of an elderly loved one. This is critical because it defines and organizes all aspects of a senior’s care. By establishing a Houston life care plan, a family can be prepared for any future care needs that may arise and feel confident in their decision.

What is a Life Care Plan?

A life care plan is a holistic look at your specific planning options, choices, and decisions. Besides including an estate plan, the life care plan will address the legal, financial, housing, and long-term care issues caused by the loved one’s chronic illness, disability, or even just their aging. Unlike traditional estate planning which focuses on preserving an elderly loved one’s hard-earned money for future generations, life care planning focuses on maximizing their quality of life and independence. Because there are a lot of unexpected situations that arise when a loved one continues to age, developing a life care plan allows families to be prepared for any situation that might arise. Overall, the goal of life care planning is to promote and maintain the health, safety, and well-being of the elder and their family.

When putting together a thorough Houston estate plan, one important consideration is how care expenses will be paid later in life. This includes long-term care planning, which can be one of the most significant expenses for older Americans. For those with limited assets, Medicaid will typically pay for nursing home expenses.

Many people anticipating the need for long-term care have used several methods for gifting assets to others in order to qualify for this benefit. The goal of Medicaid planning is to qualify for Medicaid benefits that cover long-term care, while minimizing the penalty that would result from the transfer. Recent changes to Medicaid laws have rendered several of these methods that were formerly used to achieve these objectives obsolete. Below are a couple of strategies that will no longer be effective, moving forward.

The “Half a Loaf” Strategy

7.1.19When one spouse needs nursing home care and the other is healthy, there are several approaches that can be taken to securing Medicaid coverage. An elder law estate planning attorney should be contacted, since every situation is different. For some couples, a Medicaid-compliant annuity may be a solution.

What happens when one person needs long-term nursing home care, but does not have long-term care insurance and the family cannot afford to pay out of pocket? Applying for Medicaid is difficult if you have too much money to qualify, but not enough to allow the healthy spouse to afford to pay their bills.

Doing a “Medicaid spend down” requires the person to become broke, before they are eligible. What happens to the spouse’s lifestyle? One solution is a Medicaid Annuity, as described in U.S. News and World Report’s recent article, “What Is a Medicaid Annuity?”

3.18.19You’ve heard the expression “trust fund babies.” However, trusts are not just for the wealthy. They have a number of uses in estate planning and can be helpful at any asset level.

The reality of our own mortality keeps some of us up at night. For others, it’s a disturbing thought that is easily brushed aside. Whichever group you belong to, you need to have an estate plan in place. This is the only way that you can have any say in how your assets are distributed after you pass. Without an estate plan, your family will be subjected to much more stress and financial strain. One part of an estate plan is a trust.

Barron’s recent article, “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich,” explains that there are many types of trusts, but the most frequently used for these purposes is a revocable living trust. This trust allows you—the grantor—to specify exactly how your estate will be distributed to your beneficiaries when you die, and at the same time avoiding probate and stress for your loved ones.

10.31.18Saving for college but needing to receive Medicaid is a complicated equation.

The answer “It depends” is not much of a comfort when considering how college savings accounts will be treated for Medicaid purposes.  However, it is, unfortunately, the most accurate answer. There are several factors that must be considered:

  • What type of account you used to set aside the college money;

8.31.16Control of an asset is a key element, when Medicaid considers an individual’s eligibility.

A recent article from nj.com, “What revocable land trusts mean to Medicaid eligibility,” starts with what sounds almost like a warning: it’s not easy to protect or hide assets from Medicaid. A revocable land trust won't help to protect an asset from Medicaid's spend down requirements, because a trust that’s revocable can be revoked or terminated at any time by the grantor.

A land trust is a private agreement with the trustee agreeing to hold title to property for the benefit of the beneficiary or beneficiaries. The creator of the trust is called the settlor or trustor. This person is usually the titleholder to the property, before it’s transferred into the trust.

3.13.18If you haven’t been saving for retirement, maybe you’ll do better if you are focused on saving for assisted living. One well known survey, 2017 Genworth Cost of Care Survey, reports that you’ll need $1,517 a month for adult day health care. Those fees are only going in one direction—up!

Adult health day care is not inexpensive in our country. If all you need is adult day health care, consider yourself lucky. It’s a bargain at more than $1500 a month, compared to $3,750 for an assisted living facility, $3,994 for home care services, and $4,099 for home health aides.

If you want some privacy, the median cost is $7,148 for a semiprivate room at a nursing home and $8,121 for a private room. Will you be able afford it? Wealth Advisor poses this question in its recent article, “Have Clients Planned For Long-Term Care?”

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