Who Needs Medicaid Advance Planning?

Video

Hi, it’s Andy Stautz with Stautz Law. Today, we’re following up on our Medicaid Advance Planning Basics talk with another… the answer to another important question, which is: who needs Medicaid planning?  

And it’s very personal, so it’s hard to say specifically whether you in particular should be thinking about Medicaid planning. In general, everybody should think about long term care costs. Because they’re…. You know, if you need a nursing home and it costs $100,000 a year that’s probably more annual spending than your retirement plan really accounts for. So it’s expensive. You should have a plan.  

For Medicaid advance planning, though, like we talked about, there’s a five year look back period. So you have to transfer your assets out of your estate well in advance of actually needing care. And irrevocably. And based on projections about what you’re going to need in the future. So those are big speed bumps for a lot of people. You know, if you’re not comfortable giving your property irrevocably to a trust, well then probably an asset protection trust isn’t for you.  

If you don’t have significant assets to protect there’s no point in setting up a trust. If your health care needs are suddenly worse or you have a health problem. Well, advanced planning is probably not going to help you.  

And if you’re doing great you probably don’t need Medicaid advanced planning.  

So, behavioral issues aside (with you know, having a trustee you trust; being OK with irrevocability; having some idea of your future care needs) those behavioural issues aside, there’s an asset window. Where if you don’t have anything, it’s not worth paying to set up a trust and all of that. And if you’ve done really well, if you’ve got, you know, several millions of dollars in your retirement accounts or in your estate, you also don’t need Medicaid advance planning. Because hopefully at that point, you know you, you can simply absorb the long term care costs, whatever they are. If your portfolio’s big enough, then you can afford the $100,000 a year or whatever the long term care cost is going to be.  

And then there’s. . . . an in between area where you’ve got a house and some assets that are substantial enough that you want your heirs and your beneficiaries to get them, but are low enough that you can’t afford long term care on an ongoing basis. That’s the window where it’s worth paying for the protection of Medicaid advance planning with the hope of, you know, your your life’s work going to your children or you know your other beneficiaries instead of to the nursing home.  

So those are kind of the considerations. Again, it’s very situation dependent.  

(You know, market returns can affect that. Sometimes you set up a Medicaid asset protection trust and then you don’t need care for 10 years and your investments have doubled. All of a sudden . . . you’re on the upper side where you can comfortably afford it.) 

To give personal advice, we need to have a personal planning meeting. You can book that online. Or you can just give me a call and I’ll be happy to talk. And we can come up with a plan that’s gonna work for you. So thanks for watching.