Preserving Your Assets While Paying For Nursing Home Care
You have worked hard all your life to create a home and to accumulate enough savings to live on in retirement, while still having something to pass along to your children. Unfortunately, the older you get, the prospect of having to deplete your life savings in order to pay the high costs associated with nursing home care may loom on the horizon. Medicaid planning now can help to address potential issues you could run into in the future, allowing you to get the care you need while preserving your home and other assets
‘Spending Down’ To Gain Medicaid Eligibility
The Medicaid program provides medical benefits for more than 72 million Americans. Coverage includes medical care and treatment costs, rehabilitation for injuries, illnesses, or disabilities, and long term care services for those suffering physical or mental conditions that prevent them from being at home or caring for themselves. In order to receive these benefits, you must meet eligibility requirements, which are based both on financial status as well as medical need.
Thirty-six states, including New York, have ‘medically needy’ Medicaid programs that provide for those suffering serious health conditions who exceed the income eligibility requirements. In order to qualify, you must pay for certain services that are not covered under your existing insurance. Known as ‘spending down’, once you have paid an amount greater than the difference between your current income and Medicaid’s maximum allowable income requirements, you may then be eligible for services. Unfortunately, in order to reach this amount, you may end up spending money that was meant to provide either for your own retirement or as an inheritance.
Planning Now To Ensure Medicaid Eligibility
There are steps you can take to preserve assets while ensuring Medicaid eligibility, but it is important to take those steps now, prior to when nursing home care is required. The New York Department of Health advises that there is a five year ‘look back’ period when applying for benefits, and any property given away or sold during this period could make you ineligible. Actions you may want to consider in the years prior to needing extensive care include:
- Make monetary gifts now to loved ones, rather than waiting to provide these funds through an inheritance.
- Transferring property you own into your spouse’s or other family members name.
- Creating a trust, which allows you to transfer assets, while continuing to access them as needed.
Unfortunately, none of these are foolproof when it comes to ensuring Medicaid eligibility. You also need to be extremely cautious of avoiding potential tax penalties, as well as ‘gifting’ money or property you may eventually need to provide for yourself.
Our New York Medicaid Planning Attorneys Are Here to Help
To discuss the available options in terms of ensuring your future financial and medical needs are provided for, call or contact Cavallo & Cavallo online. Whether taking the appropriate precautions in terms of advance planning or dealing with a more immediate and pressing concern our professional New York Medicaid planning and asset protection attorneys are here to help. Request a consultation in our Bronx or Westchester office today.