Medicaid planning helps older adults qualify for long-term care benefits. Medicaid eligibility rules establish very strict standards regarding both income and countable assets. The state does a review of financial activity going back five years when people apply for long-term care benefits.
People who don’t plan in advance are at risk of a penalty that may force them to pay for their own care for a certain number of months. Additionally, their remaining assets could be vulnerable after their passing. Older adults who engage in Medicaid planning five years or more before they require benefits can more effectively preserve resources for their immediate family members and chosen beneficiaries.
Why are resources at risk?
In some cases, older adults may need to liquidate much of their residual property to pay for their care until the penalty for transfers or gifts ends and they become eligible for Medicaid coverage. That can significantly reduce what beneficiaries inherit.
Additionally, any remaining property, including the primary residence of the older adult, could be at risk of liquidation to repay benefits. The Medicaid estate recovery program typically makes claims against the estates of those who have received Medicaid benefits.
Even the home where the Medicaid beneficiary lived could be at risk in such cases. The estate may need to repay the value of the benefits the deceased beneficiary previously received.
Careful planning to change the ownership of assets and protect resources can make it easier to qualify for Medicaid and preserve assets. Working with an elder law attorney can help people access necessary long-term care Medicaid benefits and better ensure that they can leave an adequate financial legacy after they pass.