You’ve probably heard of estate planning, which involves creating a last will and other documents that outline your wishes for when you die or if you wind up medically incapacitated. But you may not be as familiar with the term Medicaid planning. This involves carefully structuring your assets and finances in order to protect your ability to qualify for Medicaid as you get older if you require intensive care, such as nursing home residency.
The sooner you engage in Medicaid planning, the more likely you will be to fully benefit from your efforts. After all, Medicaid will review your recent financial statements when determining eligibility. Those who wait too long to do their Medicaid planning may not reap all the benefits they otherwise would have.
How does Medicaid planning work?
Medicaid is a federal program that connects low-income individuals with medical coverage. Medicaid covers costs for in-home nursing care as well as nursing home or assisted living facility expenses. In order to get those benefits, applicants must demonstrate that their finances meet the requirements.
The limits on your assets vary depending on your marital situation and other circumstances. Generally, to plan for Medicaid, you want to diminish the value of the personal property you hold in your own name. Some people use trusts as a way to hold their assets without losing their eligibility for Medicaid.
Others can begin transferring assets to their loved ones as they would do at the time of their death. Giving gifts to your loved ones can both diminish your estate and give you the pleasure of seeing how people use their inheritance. Which approach works better will depend on many different factors. However, regardless of which approach you choose, the sooner you begin the process, the more likely you are to receive the protections you desire through Medicaid planning.