Unless you’re independently wealthy, there’s a good chance that you may have paused at some point in life and wondered how you could ever hope to pay for nursing care should that ever become a concern. Long-term care costs have exploded in recent decades, and have now reached the point where many seniors across the United States are paying in excess of $200 a day in nursing home expenses. Depending on where you live, that means that your costs could be anywhere from $70,000 to more than $100,000 a year. Obviously, even the most diligent savers and investors wills struggle to build a nest egg that can cover those kinds of costs for even a few years of long-term care.
To make matters worse, most seniors would really like to have the opportunity to leave some kind of inheritance legacy behind when they die. Without help, however, most are left facing the prospect of nursing home costs that will consume much if not all of the value of their estates. Worse, many find that their estate management miscalculations leave them not only bereft of resources to pay for care, but also temporarily ineligible for Medicaid benefits that might otherwise help them with the expense. The good news is that you can avoid these problems and better shepherd your asset resources with sound Medicaid planning assistance from a Michigan estate planning attorney.
Don’t Plan on Help from Medicare
Seniors can hardly be blamed for running into difficulty with nursing home costs. After all, there has been little effort made at the public level to explain to seniors or their families how the various government programs actually work. That has led many seniors to assume that programs they have paid into their entire working lives – such as Medicare, for example – would help defray the expense associated with nursing care in the senior years. To be blunt, it won’t – at least, not in a way that will provide long-term assurances.
Medicare will sometimes cover a limited stay in a nursing home, but few seniors just go to a long-term care facility for a brief stay. Since that program provides almost no relief for seniors who require more extensive coverage, seniors usually end up relying on the Medicaid program – a federal program for the needy that is administered by the states for the benefit of their citizens. Medicaid will provide benefits for seniors who meet the eligibility income and asset limits, and its coverage for nursing home can be long-term.
Why Assets Are at Risk
There is a caveat, of course. If you have assets in excess of those eligibility standards, then you will be denied benefits from Medicaid. In fact, the program expects you to use your own assets before you can receive any benefits. Obviously, that can leave seniors in a position in which they must exhaust their savings before they can ever receive even a cent from the Medicaid program. While that might seem fair to some, it is a standard that can have devastating consequences for married seniors or seniors with dependents, since they must spend virtually all of their assets – leaving their well spouses or dependents with no savings on which to rely.
To avoid this and other negative scenarios, seniors need to plan ahead to ensure that they make themselves eligible for Medicaid without being forced to liquidate all of their assets and literally impoverish themselves just to get the assistance they need. To get around that, some seniors try to simply give away or otherwise transfer ownership of their assets to family members to get their net worth under the eligibility limits. The problem with that strategy is that Medicaid’s five-year look-back period works to identify transfers of that kind that occurred in the five years prior to the Medicaid application. Any such transfers within that five-year period are counted as assets, and the senior can end up being penalized with a denial of benefits for a period of time.
Finally, assets that you may retain while receiving benefits may be subject to Medicaid’s recovery efforts after you die. That can leave your estate subject to Medicaid recovery, leaving little for your well spouse, children, or other heirs. Obviously, that is something that most people would choose to avoid if given the choice.
Medicaid Planning Can Help!
The good news is that there are ways to protect your assets while still ensuring that you are eligible for the benefits you need when you need them most. These strategies can only be effective, however, when you recognize your risk early enough to take action before a problem arises. Medicaid planning is something that should begin early so that you are not left juggling assets in the last few years before entering a nursing home – or fund yourself unexpectedly requiring long-term care due to injury or illness.
Comprehensive estate planning can help, but including effective Medicaid planning strategies that are designed to manage your assets in a way that ensures eligibility for program benefits. There are different strategies that can be employed, depending on your unique needs. One of the most common involves the use of Medicaid trusts that enable you to transfer ownership of your assets into a trust – which then prevents them from being counted by Medicaid when your program eligibility is being calculated. That approach works for many seniors, but it is something that needs to be handled by an experienced lawyer to ensure that everything is done properly.
Contact Your Michigan Estate Planning Attorneys
Michigan residents deserve a law firm with the estate planning and elder law expertise needed to create competent and effective Medicaid planning strategies that work. At Biddinger, Bitzer & Estelle, PLLC, our legal team has the experience and proven track record you need to protect your assets and ensure that you qualify for important Medicaid program benefits if you ever need long-term nursing home care. Give us a call at (989) 872-5601 or contact us online to learn how we can help you with all your Medicaid and other estate planning needs.