Holly M. Homra
Denton Law Firm
555 Jefferson Street
Paducah, Kentucky 42001
Medicaid Planning: Your Best Approach to Financial and Healthcare Peace of Mind
With the rising cost of long-term healthcare, planning for future expenses is more important than ever. Proper planning can mean the difference between your hard-earned money going to your loved ones, or dwindling away towards nursing home costs. Medicaid qualification could be your best option to combat this undesirable outcome.
Often, clients will come into our office with a desire to plan for Medicaid qualification, but aren’t sure where to begin. Let’s start with the basics. Medicaid planning can take place in one of two ways: 1) advanced planning or 2) emergency planning. While both options can result in savings, timing will determine which approach is right for you.
Advanced Medicaid Planning
The most desirable planning method, advanced planning is advantageous for persons who are still in good health and likely have at least five years before the need for long-term care approaches. Why five years? Medicaid regulations include a “five-year lookback period.” This means that any assets (sometimes called “resources”) that are transferred within five years of applying for Medicaid will be considered when determining your assets for Medicaid qualification purposes. Even if you no longer own the assets, their value at the time of transfer can be counted against you. The goal of advanced planning is to reduce your countable assets to the Medicaid resource limit at least five years before Medicaid application is necessary. This is most often done through irrevocable trust creation, granting of life estates, or transformation of assets into exempt resources.
With the advanced planning approach, you or your loved ones will have a much easier time completing the Medicaid application process and can be confident in your qualification, if and when the time comes.
Emergency Medicaid Planning
What if it’s too late for advanced planning? Life is unpredictable, and we never know when we will need long-term care. While not ideal, emergency planning is often necessary to protect your assets and can still result in savings. Emergency planning involves some of the same steps as advanced planning. First, an assessment of your income and resources will be undertaken to determine what is and is not countable for Medicaid qualification purposes. From there, it may be necessary to spend down these resources, by making exempt transfers or purchasing certain exempt resources. It may also be necessary to create a trust to manage your income. It is best to get the emergency planning process started as soon as you or a loved one enters long-term care, in order to have the best chance at the most savings.
Navigating the Medicaid application process can be daunting, but no matter which approach is right for you, an experienced elder law and estate planning attorney can walk you through the process. If you would like more information about Medicaid planning, please contact Holly Homra at (270)-450-8253.