If you have spent a lifetime acquiring assets and developing a retirement fund, you probably don't think it's likely that you will need help from the government after you retire. After all, you may have Medicare to cover your expenses. However, Medicare is more limited than most people realize.
The benefits available under Medicare will not cover the costs of long-term care, which is a common need among older adults. Depending on the level of care you require as you age, you can expect to pay several thousand dollars each month, if not more, for nursing home care.
Medicare can leave you financially vulnerable in your later years
You can't depend on Medicare to cover nursing home stays. Instead, those who need to live in a nursing home or have skilled nursing assistants in their own home may find that they will have to pay out-of-pocket until they have completely diminished their savings. The alternative is to qualify for Medicaid, which, again, often requires that you spend your own assets first.
Not only does this mean that you will have to deal with the stress of applying for Medicaid when you are already in a position of great need, but it means that you won't be able to leave behind any sort of legacy for your loved ones. Engaging in Medicaid planning now can allow you the peace of mind that comes from knowing that your costs will be covered and your legacy will persist as you continue to age.
Medicaid planning often involves the use of trusts
In order to qualify for Medicaid, you must meet certain requirements for the overall value of your personal property and for your annual income. The government doesn't want people intentionally gaming the system, so they go back over financial records for five years before the date of the application.
In other words, you need to start planning for services well before you ever think you might need them. Creating a trust is an ideal way to maintain control over your assets without sacrificing your potential eligibility for Medicaid in the future. Transferring funds or even your home into a trust now will help ensure that those assets won't wind up liquidated to pay for medical debt in the future or keep you from connecting with the medical benefits you need.
Medicaid planning requires careful consideration
There is no one-size-fits-all solution for Medicaid planning, just like there is no perfect solution for creating a last will. Every family has unique circumstances that contribute to what needs to happen during estate planning.
Sitting down to talk about your needs and your financial situation with an experienced estate planning attorney is an important first step to ensure that you qualify for Medicaid when you need it in the future.