Medicaid Planning Strategies for Long-Term Care
Your need for long-term care may seem like a far-off concern, considering your current age and health, but statistics from the US Department of Health and Human Services indicate that you should start planning sooner. For an individual who turns 65 years old today, there is a 70% chance that he or she will need such long-term care services at some point. In addition, it is expected that 27 million Americans will reside in assisted living centers by 2050. When you note that a private room runs almost $8,000 per month – or $96,000 per year – you realize that it is wise to prepare for the financial implications.
The good news is that there are strategies that allow you to apply Medicaid benefits to long-term care costs, while also protecting your assets. You should trust a Michigan Medicaid planning lawyer for assistance, especially since the laws are complex and could impose penalties if you do not strictly comply. You might also benefit from reviewing a summary on Medicaid planning for long-term care.
Using Medicaid to Pay for Long-Term Care
When it comes to the cost of these services, you are responsible for paying the bill through your own funds and insurance. If these resources are not available, Medicaid will step in as a last resort to pay for long-term care. However, Medicaid is a needs-based government benefit. There are strict rules to qualify, including:
- Your income must fall under a designated threshold; and,
- You must have already depleted significant assets to pay for long-term services.
Proper planning can address these rules, especially regarding your assets. There is a five-year “lookback” period in Michigan for Medicaid eligibility, intended to prevent people from giving items away or selling for less than fair market value just to meet the asset limit. You could incur penalties through improper attempts to do so.
Strategies for Maximizing Medicaid Planning
Your approach to long-term care should protect assets from being depleted, while still complying with lookback rules to avoid penalties for improper transfers.
With these objectives in mind, there are several Medicaid planning options, to discuss with an elder law attorney such as:
- Medicaid Trust: You can legally transfer assets to an irrevocable trust you create. Because of the irrevocable provisions, you have no control over the assets and do not own them for purposes of Medicaid asset limits.
- Personal Caregiver Agreement: Through this option, you pay someone for caretaking services – which depletes your assets during the duration of the contract. When your net worth falls below the Medicaid threshold, you could qualify for long-term care benefits.
Reach Out to Our Team at the Nawrocki Center for Elder Law
This overview may be useful, but there are additional details when Medicaid planning for long-term care. Not all of these options will suit your circumstances, so you will need experienced attorneys to assist with a customized strategy. To learn how our team at Nawrocki Center for Elder Law can help, please contact us at 810-893-5277 or via our website to set up a consultation.