While young and middle-aged estate planners may not care about Medicaid now, unless they have a disease or medical condition that requires hospice or other long-term care. However, for these people and our more elderly clients, planning to qualify for Medicaid is essential to getting the care they need, while ensuring their legacy is protected.
Excessive long-term care costs
It comes as no surprise, but long-term care costs in the United States are exorbitant. Indeed, nursing homes alone can cost up to and well over $100,000 a year, and none of these costs are covered by Medicare. Medicaid, on the other hand, can cover these costs, where it is accepted by the long-term care facility.
Medicaid qualification hurts everyone in the middle
For high-net-worth estate planners in Godfrey, Illinois, or those that purchased long-term care insurance when they were young, long-term care costs are of little concern. On the other end, for destitute people, Medicaid can be easily attained.
It is everyone else that falls through the cracks. And, while these costs can be covered by Medicaid, this program has income and asset limitations that make it unattainable for many that need it. Without spending through your entire estate, many could not qualify, which is why irrevocable trusts were created.
Irrevocable trusts
Medicaid trusts, Medicaid asset protection trusts, home protection trusts and Medicaid qualifying trusts are all types of irrevocable trusts that can help you meet the financial eligibility requirements of Medicaid.
Once you meet those requirements, you can qualify for Medicaid long-term care benefits.
In essence, you transfer your assets and income into the irrevocable Medicaid trust through a spend-down period.
Once your assets are transferred to the irrevocable trust, they are no longer in your name, and as a result, you may, potentially, qualify for Medicaid. Typically, you must do this years in advance, which is why you should discuss this with your estate planning attorney now, before you need it.
