Medicare does not pay for long-term care, but Medicaid will assist with these costs. This is why many people who were never financially needy throughout their lives ultimately seek Medicaid coverage.
Qualifying for Medicaid Coverage
Most people are aware of the fact that Medicaid is a need-based program. There are asset and income limits in place, and they are quite modest for the most part. The limit for countable assets is $2,000 for single individuals in most states.
If you enter your retirement years with some resources, you could aim toward Medicaid eligibility through a process called a Medicaid spend down. This can involve giving your children their inheritances in advance so that you can remove most of your countable assets from your own name.
To proceed in the optimal manner, you should understand the difference between countable and non-countable assets.
When Medicaid is evaluating your application, the value of your home is not counted, but there is an equity limit. We have offices in Kansas and Oklahoma. In these two states, the equity limit in 2014 is $543,000. However, there is no equity limit at all if a healthy spouse is remaining in the home while his or her spouse is entering a long-term care facility.
The Medicaid program is jointly administered by each respective state government along with the federal government. If you were to use Medicaid to pay for long-term care, the state would be required to seek recovery from your estate. Your home could potentially be targeted after you pass away if it is technically part of your estate.
However, there are steps that you can take to prevent Medicaid recovery. If you act well in advance, you could convey the home into an irrevocable trust. A life estate could also be used to protect your home.
When you set up a life estate, you retain the right of ownership throughout your life, and you name someone to assume ownership of the property after you die. The home would not be part of your probate estate.
Special Report on Medicaid Planning
Medicaid planning is very important for a significant percentage of senior citizens. If you would like to learn more about the process, download our free report on the subject.
You can obtain access to the report through this link: Medicaid Planning Special Report.
Medicaid Planning Consultation
To plan ahead in the optimal manner, professional guidance is typically going to be required. We have a thorough understanding of Medicaid rules and regulations, and we can help you put a Medicaid plan in place.
You can send us a message through our contact page to request a free Medicaid planning consultation.
Parman & Easterday