Nursing homes are very expensive, and most people don’t have the funds to support a long-term stay, which is when Medicaid comes into the picture. Before someone can rely on Medicaid to pay the bills, however, they must first use their own assets to defray the costs of their care until they are nearly depleted.
Medicaid Planning Doesn’t Deserve a Bad Name
The purpose of Medicaid planning is to preserve assets by minimizing the amount spent on the costs associated with living in a nursing home. Medicare planning is viewed by some as an attempt to game the system, but this is typically not the case at all. Instead, Medicaid planning helps middle-class families who do not have enough money to pay for a nursing home but are facing an immediate or eventual need for long-term care for a loved one. When done properly, Medicaid planning allows families to preserve their home and their modest assets.
Just as families engage in careful tax planning to reduce their tax liability, they should also consider Medicaid planning to reduce potential long-term care liabilities.
Medicaid Planning Includes Reviewing Other Sources of Long Term Funding
There are many resources that may be available to cover nursing home costs, including:
- A reverse mortgage
- Long-term care insurance
- Personal care planning
By discussing these options prior to the need for Medicaid, families can reduce the amount of stress and anxiety associated with making sure an aging loved one gets the help and care they need, without breaking the bank.
Medicaid Planning May Prevent Medicaid Recovery
Federal law allows the government to attempt to recover funds spent on a Medicaid beneficiary’s behalf after their death. The government is limited in how they can do this, however.
Typically, if someone has been receiving Medicare, their assets at the time of death are limited to their personal residence. As such, many states will place a lien on the residence upon death in an attempt to recover at least some of the costs associated with their care while they were living.
Depending on how your loved one’s estate plan was set up, it is possible to prevent this from happening. Only a qualified trusts and estates law attorney well versed in Medicaid planning can determine what actions are best.
Is It Time to Discuss Medicaid Planning for Your Family?
At Doane & Doane, we work closely with families to help them with both tax planning and estate planning. Medicaid planning should be a part of these long-range plans. Contact our office for a complimentary initial consultation to discuss the needs of you and your loved ones. As scary as it may be to discuss future eventualities, not discussing or planning for them is even scarier. Put yourself and your family in good hands by contacting Doane & Doane today at (561) 656-0200.
For More Information:
The Differences Between Revocable and Irrevocable Trusts: 4 Things You Should Know
Estate Planning: Crafting Your Legacy