Medicaid Planning: Protecting Your Assets and Your Eligibility

528 College Road Greensboro, NC 27410 ❍ Phone: (336) 547-9999
Protecting Your Assets and Your Eligibility
MEDICAID PLANNING

WHY COMPREHENSIVE ESTATE PLANNING IS
NECESSARY
Estate planning is something that should be
ongoing, not something that is done once and
forgotten.

As you grow, so does your family
and your estate.

Consequently, your estate plan
should also grow to ensure that you,
your family, and your assets are
protected.

One threat to those assets,
particularly during your retirement
years, is the cost of long-term care.

Medicaid can help; however, you
must first qualify for benefits.

Once again, your hard-earned assets
may be in jeopardy unless you
include Medicaid planning in your
comprehensive estate plan now.

WHAT IS MEDICAID?
Medicaid is a health insurance program for low
income individual and families as well as for the
disabled and elderly.

Medicaid is primarily funded by the
U.S. federal government; however,
the individual states may also add
to their Medicaid funding.

Medicaid is administered by the
individual states which causes the
eligibility criteria, as well as
available benefits, to vary somewhat
from one state to another.

WILL YOU NEED LONG-TERM CARE?
The longer you live, the better the odds are that
you will need long-term care at some point.

In fact, the odds of needing long-
term care at any time in your life are
likely higher than you realized.
Consider the following facts and
figures:

During your working years you stand a 1 in 5 chance
of suffering an injury or illness that leads to the
need for long-term care.
By age 65, you stand a 1 in 2 chance of needing
long-term care before you die.
At age 85 those odds increase to 3 in 4
The average yearly cost of long-term care is over
$80,000 nationwide

In North Carolina, the average yearly cost for long-
term care is just over $90,000 as of 2016
Looking 20 years into the future, that cost is
projected to run about $160,000 a year
The average stay in a long-term care facility is 2.5
years

Medicare does not cover long-term care costs nor
will most private health insurance policies.
Medicaid does cover long-term care costs
Almost half of all seniors count on Medicaid
benefits at some point

CAN MEDICAID HELP?
Although Medicaid does cover long-term care
costs, qualifying for benefits can be challenging
for many seniors.

Here’s why:

The problem for most senior applicant’s is that
Medicaid uses income and asset limits when
determining eligibility.
The asset, or “countable resources” limit is as low as
$2,000 for an individual in many states.
“Countable resources” refers to assets that count
toward your eligibility limit.

Some assets are exempt from your “countable
resources,” such as a home, a vehicle, and a burial
plot.
If the value of your assets exceeds the program limit
you will be required to rely on those assets before
Medicaid will start covering your expenses.
Your hard-earned assets could be depleted within a
matter of months.

CAN’T I JUST TRANSFER ASSETS TO MY CHILDREN
BEFORE I APPLY?
Transferring assets right before applying for
Medicaid no longer works.

Medicaid now uses a five year “look-back” rule.
Allows Medicaid to review your finances for the 5-
year period prior to applying for benefits.
Asset transfers during that time frame may be
ignored
The value of assets transferred will be imputed back
into your estate for the purpose of determining
eligibility for Medicaid.

HOW CAN MEDICAID PLANNING HELP?
The key to protecting your hard-earned assets and ensuring that
you will qualify for Medicaid benefits should you need them in the
future is to incorporate Medicaid planning into your
comprehensive estate plan now, long before the need to qualify for
Medicaid actually arises.

WHAT IS MEDICAID PLANNING?
Medicaid planning looks ahead to the likelihood
that you, and/or your spouse, will need to qualify
for Medicaid in the future.

Legal strategies are incorporated
into your estate plan to protect your
assets and ensure that you will
qualify for Medicaid benefits should
you need them in the future.

A Medicaid trust, for example,
might be created to remove assets
from your estate and protect them,
thereby reducing the value of your
“countable resources” and allowing
you to qualify for benefits.

WHAT ABOUT LAST MINUTE MEDICAID PLANNING?
Ideally you should incorporate Medicaid planning into
your estate plan at least five years prior to the need to
qualify for benefits to remain safely outside of the five-
year “look-back” rule.

Last minute Medicaid planning
might still be able to help you
though.

An experienced estate planning
attorney might be able to use some
Medicaid planning strategies to
help you even if you failed to start
planning early on.

If you have questions regarding
Medicaid planning, or any other
estate planning matters, contact us
online or call us at (336) 547-9999
for a free consultation

Medicaid Planning: Protecting Your Assets and Your Eligibility

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Medicaid Planning: Protecting Your Assets and Your Eligibility