Making The Complex

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Long-term care and Medicaid planning

Going into a nursing home or other long-term care facility is more than a loss of independence. The cost of staying in the facility can drain your estate, unless you take precautions. Many people end up paying privately for a facility until their money is gone. While paying privately may or may not result in a better facility, the reality is that your money will only last so long. Start planning now to stay in control of what happens to your estate.

About qualifying for Medicaid

Medicaid has been a big topic in the news, and there has been significant discussion about qualifying for health care programs such as Medicaid.

This blog is not political. Instead, it is a discussion of how people who are looking to preserve assets while still qualifying for long-term care may be able to do so. While numerous changes are being considered, regardless of what happens you will have to meet eligibility requirements regarding the amount of assets you own and income you receive.

Why Medicaid matters for long-term care

Medicaid is the plan that the vast majority of Americans end up using if they need to go into a nursing home. If you can, it can help to apply for a long-term care insurance policy, which will provide you with money to cover out-of-pocket expenses. However, long-term care is not an option for many, whether because it is too late in the process (advanced planning is extremely helpful) or it is too expensive.

If you or your loved one needs long-term care and private insurance is not an option, an elder law attorney may be able to save some of your assets without violating the Medicaid impoverishment thresholds. This can qualify you for Medicaid while still letting you leave some of your hard-earned assets to family members.

You have options

Provided below solely as examples, and not legal advice, here are some strategies that have been beneficial to families looking to save assets and still qualify for Medicaid.

  • Set up an asset protection trust and transfer wealth to trusted family
  • Set up a pooled income trust run by a non-profit to distribute small amounts to you as needed
  • Create private annuities and promissory notes, which when set up correctly can create an income source that will help pay for a nursing home
  • Set up a caregiver agreement so that if a relative needs to stay home to take care of you, they can receive a salary

The exact method you use will depend on your circumstances. And, be advised that simply gifting assets to a loved one may end up violating Medicaid’s “look back” period, meaning you will not qualify for Medicaid until the amount of gifted assets is spent by you or a family member.

You go to the doctor to diagnose your health, so take the time to consult an elder care lawyer about your financial health as well.


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