Be Proactive Instead of Reactive About the Medicaid Five-Year Lookback Period
When you are gainfully employed, you probably only think about publicly funded healthcare programs in the most general of terms. You might think that Medicare is for seniors, but Medicaid is for children and for disabled adults of working age, who will presumably switch to Medicare when they turn 65. There is more overlap than you might recognize. Medicare does not make all healthcare free for seniors; you still have to pay premiums, and these, plus the out-of-pocket expenses, can be as financially burdensome as the health insurance you received through your employer. Medicare is anything but generous with nursing home care. Many seniors who require more than a few months of long-term care eventually run out of assets and need to apply for Medicaid. When this happens, all it costs you is your Social Security check and most of your estate. Planning for long-term care is the best way to prevent complete financial collapse in the event of a sudden decline in health, but if your health crisis arrives sooner than you thought possible, there are still crisis management measures that can stave off financial catastrophe. To find out how to keep Medicaid nursing home care from devouring your estate, contact a Bronx estate planning lawyer.
The Best Time to Consider Your Future as an Elderly Medicaid Beneficiary Is When You Are Young and Healthy
Medicaid will pay your nursing home bills if your assets are valued at less than $33,000. After you die, it will file a claim against your estate to reimburse itself for the money it spent on your care, even though it will have already received some payment in the form of your Social Security check. It might deny your application for Medicaid if it determines that you deliberately spent down your assets in the past five years, such as by giving cash gifts to family members or transferring property.
The best solutions are to avoid needing Medicaid at all, such as by buying long-term care insurance or hybrid life insurance. If you cannot do this, the next best thing is to transfer your property to a Medicaid asset protection trust, but you should do this now, at least five years before you need to enter a nursing home.
What If You Missed the Boat on the Five-Year Lookback Period?
If you suffer a sudden, serious illness and need to enter a nursing home, the best thing to do is to transfer your property to a family member. Sign an agreement with your relative, saying that half of the transferred property is a gift, while the other half is a loan. Then half the relative pays you installments on the loan, and uses that money to pay your nursing home bills.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you manage the crisis of needing to enter a nursing home sooner than you anticipated. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.