How to Financially Plan for the Med...

Author: Wolfe Ossa lawCategories: Medicaid

So you know you’ll have to apply for Medicaid in the future…but you haven’t looked into the process. All you know is that it’s tedious, stressful, and expensive, and you’re not sure how to make it easier. Luckily, we are here to help.

Nursing homes and assisted living facilities cost more than one can expect. It is a little known fact that Medicare will only cover up to 100 days in a rehab facility, which means that most people end up paying out of pocket for these medical services.

The typical path that most follow is that eventually, you run out of money, and then government will cover your expenses. This happens through a program called Medicaid. This program will only cover your nursing home expenses if you are considered poor, which means you’ll have to spend your life savings, not to mention sell your house before you can apply. You will have to “spend down” all of your retirement accounts and savings in order to qualify. When you hear people talk about how they don’t want to put someone in a nursing home because the “nursing home will take everything”, this is what they mean.

You may think it’s as easy as naming your assets in your kids’ and grandchildren’s names.  Not so fast! Medicaid has a five year “look back” period, meaning that they require you to submit bank statements and statements for any assets you have for the last five years in order to qualify for financial assistance.  This means that any substantial transfer of money within the past five years can be used against you and will not help you to look “poor” to the Medicaid office. So that $1,000 gift you gave to your granddaughter Megan for her birthday? Medicaid wants you to give that back before they start footing the bill. The good news is, there are ways around this.

What can I do now?

There are a few ways to protect your hard earned assets. If you plan ahead, you can save almost all of it! Transferring your money into a trust protects it from both Medicaid and creditors. This is what is referred to as “asset sheltering”.  Call us at 732-548-5400 to schedule your free consultation and learn about how we can help you!

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