Medicaid Advance Planning: The Basics

Video

Hi, it’s Andy Stautz with Stautz Law. Today we’re talking about the basics of Medicaid advance planning.  

Medicaid, as you may know, is a government program that pays for long term care for people who can’t otherwise afford it. So it’s traditionally thought of as a poverty program, but for a lot of middle class people the costs of long term care are overwhelming and Medicaid can be a useful way to defray some of those costs. 

[T]he cost of long term care in Indiana right now is over $100,000 a year. Most normal people with normal retirement savings can’t really afford that. So what do you? Do you just spend down your entire life’s retirement savings and your house and it all goes to the nursing home? Well, hopefully not. And that’s where advanced planning comes in.  

So to qualify for Medicaid, to have Medicaid pay for the nursing home, you can’t have any assets or any income. I mean the current limit is 2,000, 3,000 if you’re married, in assets and about the same in monthly income.  

And you can’t just give away all of your property to your kids right away, to qualify for Medicaid: Medicaid has a five year look back period and says if you look like you qualify for the asset and income limits when you’re applying for the nursing home, payments for the long term care, Medicaid’s going to look back at five years and say, OK well. Did they just pretend to be broke by giving stuff away?  

[A]dvance planning relies on being outside of that look back window. You have to plan five years ahead and think about your future needs, and that makes it kind of kind of niche because how how often do you really know when your healthcare needs or your care needs are going to be 5 years down the line? Especially because health changes fast as you get older.  

Ideally though, what you can do if you know or you want to prepare for the future costs of care, you can basically, transfer some assets out of your personal estate. In advance. With the hope that later when you need long term care or you want Medicaid to pay for your nursing home, you’ll qualify and you’ll have. You’ll have satisfied all of the eligibility requirements. 

The most fundamental way to do that is to put your assets in an irrevocable trust. Medicaid Asset Protection Trust. You know, those have advantages and disadvantages. We don’t have time to get into all of it now.  

Today was just talking about the basic concept of: you can shield some assets from Medicaid by moving them outside your estate in advance of the look back period. That’s all there is to it.  

That way, when you need nursing home care five years down the line or more. The state will step in and pay for you instead of insisting that you come back and contribute. 

And that can be, for the right person, that can be a great way to protect your life savings, your house and make sure your beneficiaries, your children, your heirs get what you’ve worked hard for, instead of it all going to the nursing home.  

So if you’re interested in this technique. You know, it’s something you want professional help to get set up and a consultation to see if it’s right for your situation. I’m happy to do it, so you should book online or give me a call when we can have a planning meeting where we’ll talk about your particular situation and come up with the best plan for you. That’s all for now. Thanks and bye!