Medicaid Planning in Texarkana
While many of us will make every attempt to live healthy and active lives, sometimes despite our greatest efforts to enjoy our retirement in the comfort of our own home, our efforts are thwarted when we suffer from a debilitating stroke or from a severe case of Alzheimer's disease or from some other ailment. One of the greatest fears that the elderly have is that they will eventually have to move into a nursing home; however, sometimes a nursing home is the only way that someone can receive the proper care and attention that they need.
Unfortunately, the financial toll of moving into a nursing home can be a huge drain on your family and your estate if you don't properly prepare in advance. In such cases an elderly adult may be forced to shoulder the full cost of nursing home care until their income finally qualifies them for Medicaid. Although paying out of pocket gives you the advantage of choosing your facility, the disadvantage of having to pay out of pocket can cause you to lose most of your income and your assets. Sadly, a large percentage of nursing home residents exhaust their assets over long-term care; however, with proper planning it doesn't have to be that way. The single most effective step you can take now is to contact an elder lawyer from Langdon Davis before you or your spouse need to move into a nursing home or other long-term care facility.
Understanding Medicaid Estate Recovery
In the United States, Medicaid is the dominant long-term plan that is frequently utilized by the elderly. For those who don't have a long-term care insurance policy, most of them will be forced to pay for nursing home care out of pocket until they have drained their estate to the point that they qualify for Medicaid. Medicaid sets specific guidelines in order for people to qualify for coverage, and those guidelines are set so low that a person has to be literally impoverished in order to meet the state's guidelines and receive coverage.
Although the Medicaid eligibility guidelines vary from state to state, all Medicaid recipients are required to abide by the federal guidelines as well. In order to become eligible for Medicaid, your monthly income and assets are required to fall below a certain level in order to qualify; however, if you plan correctly, certain assets and income may be excluded or not counted, thus leaving more money for your estate and the ones you love.
In order for you to qualify for Medicaid, the state is only allowed to count assets and income which are legally available for paying bills. By planning ahead of time, we can strategize effective ways to shelter your assets and make them inaccessible. With proper Medicaid Planning, we can help you 1) shelter assets that are currently countable, 2) provide for your spouse if you are married, and 3) protect and preserve your assets for your spouse, or your children etc.
Careful Medicaid Planning is essential if you want to protect your assets from Medicaid Recovery. Medicaid imposes a period of ineligibility for those who transfer assets before receiving Medicaid. The "look back" period is a penalty that is imposed for assets that are transferred five years prior to receiving Medicaid. This penalty is calculated according to a mathematical formula and is divided according to the average cost of monthly nursing home care with the amount transferred. It could take a person a number of years of paying payments before Medicaid kicks in, so it's critical not to transfer any assets to your spouse or children without discussing the implications with an attorney from our firm first.
Shelter Your Assets from Medicaid Estate Recovery
Whether you anticipate having to move into a nursing home or not, as a homeowner or someone with sizeable assets, it's important that you take the necessary steps today to maximize the Medicaid system and to minimize the effects of Medicaid estate recovery. Keep in mind that if your home is not properly protected, then it becomes fully susceptible to Medicaid estate recovery. What does this mean to you? Under the current Medicaid laws, if someone uses Medicaid to pay for their long-term care, then the state has the power and authority to recover the money spent on long-term care and other expenses from the person's estate after they pass away. For example, if the home's equity is part of the estate, then the equity will become subject to Medicaid estate recovery unless the person has taken actions in advance to prevent this from happening.
One effective way to protect your estate from Medicaid recovery is to set up an irrevocable trust; this is a trust that cannot be changed once you have created it. The trust is drafted by the grantor (you), and the funds and principle will be protected when you pass and will automatically be transferred to your heirs. However, while you are still alive, your home is protected and you can still use the income for expenses. If you do need to move into a nursing home, the income from the trust will need to go towards the nursing home for your care. Since the funds in an irrevocable trust cannot be used for something other than nursing home care, it will be necessary to set up a cushion outside of the trust to pay for your other living expenses.
Another option to protect your estate is to create a life estate. A life estate is a form of joint ownership between two or more individuals. Although each of these people has an interest in the property, it will be for a different period of time. For example, while you are living you will have interest in the property; however, once you pass away the other owner can take possession of the property. It's important to keep in mind that as with a transfer to a trust, the deed can also trigger Medicaid ineligibility for a term of five years. By discussing your situation in detail, we can help you plan for Medicaid in such a manner as to protect your assets from Medicaid estate recovery and to minimize, if not eliminate the five year period of Medicaid ineligibility. Let us help you plan for your future while protecting your estate,
call us today.