Medicaid and Estate Planning
Most clients' goals are simple: at the time of retirement they would like to be able to comfortably support themselves, their spouses and family members and leave sufficient assets to take care of succeeding generations. The best elder planning is to have sufficient resources at the time of retirement to accomplish these goals. However, even the best planning cannot always anticipate the possible catastrophes that can happen to any family. Many times we can identify savings and planning opportunities for our clients helping them achieve their goals and be as
prepared as possible for the future and the possibility of “catastrophes.” There are several ways for clients to begin protecting family savings and assets from the high cost of a nursing home or assisted living stays now — long-term care insurance, asset transfers to adult family members or setting up protected trusts or "side funds" through a or special investments or an annuity.
Long-term care insurance is one of the best options for protection because it allows clients to choose from several home health care options including in-home care, independent or assisted living instead of nursing home care. For married couples, the home care option may protect the spouse not requiring the care from compromising his or her own health and finances with the heavy burden of care giving in their later years. The main objection most clients have to purchasing long-term care insurance is the expense.
There are several other options to consider:
The first of those are asset transfers to children or other relations which may be effective for protecting assets or reducing your “resources” for Medicaid calculations. We assist our clients set up their estate planning and then navigate through the seemingly endless governmental red tape the family is faced with when a member of the family is diagnosed with a debilitating illness or mental condition and needs assistance from Medicaid.
Medicaid is a governmental program which fills in for families who fall under certain “income” and “resource” levels. In order to qualify for Medicaid the client must have a very limited “income” and even more severely limited “resources” (assets). Do not transfer assets without seeking the advice of a qualified Medicaid attorney. Transfers made without proper planning can disqualify a person for Medicaid and leave them without the resources to pay for care privately. This is the worst of both worlds.
Another option for persons planning ahead who cannot get long-term care is to set aside a protected “side-fund” with an Irrevocable Medicaid Trust or a Special or Supplemental Needs Trust (SNT) and to offset the income with a Miller Trust or a Qualified Income Trust. An “income only” trust and the SNT must name someone other than you or your spouse as the trustee, usually one or more adult children, and limits the access to the income allowing you to qualify for Medicaid but holding the resources for the benefit of the client or his or her family.
This is a specialized area of law. Call Tracy today to schedule your complimentary consultation.