Preserve Your Family Wealth With Proper Medicaid Planning

Preserve Your Family Wealth With Proper Medicaid Planning: 5 Important Things to Consider

As retirement approaches, many people shift from a focus of making more money to preserving the assets and resources they have built up over their working years. The shift from growth mode to protection mode is common and should be taken seriously.

One relevant concern we often hear while guiding clients through the planning process is the fear that they may outlive their assets or that their last dollar will be spent on home health aides or nursing home care. Indeed, wealth preservation planning has shifted from minimizing estate tax payments to seeking cost coverage options for long-term personal care by taking steps to become eligible for Medicaid. The reasons for the shift are 2-fold: (1) tax rules have changed making tax planning necessary only if you have very high net worth and, (2) the costs of long-term care have increased significantly. If you have less than $2,000,000 in assets, you must engage in the protection conversation…and the earlier the better.

If You’re Younger than Age 70 and Healthy

Retirement is a good time to make sure your estate plan is up to date—and to prepare for the years ahead. This is an exciting time and full of changes. You’ve worked hard to get to this season, so protect the life you’ve built with an estate plan that addresses your needs. We can help you with:

● Giving to kids, grandkids, charities, and organizations both during your lifetime and after you’ve gone.

● Protecting what you’ve earned from the high (and rising!) costs of home care, assisted living, and nursing homes.

● Avoiding or reducing tax burdens associated with giving real property, qualified money (like retirement accounts), and other valuable assets.

If You’re Younger than Age 70 and Not Healthy

Medicaid Planning prior to age 70 may be appropriate when a family member or a couple has one partner diagnosed with a degenerative disease, such as Alzheimer’s, Parkinson’s Disease or Multiple Sclerosis. You may still have some time, but due to the required five-year “look back” constraints for asset transfers, a comprehensive understanding of Medicaid is essential. As such, sick individuals should get educated on Medicaid requirements immediately upon diagnosis of a degenerative disease. If you find yourself in a crisis situation- reach out immediately for help.

You Have High Income, But Low Assets

Large amounts of either assets or income can make a person Medicaid ineligible. However, while assets can easily be transferred to another family member, income is often not transferable and depends on the State in which you reside. Make sure to check your State’s rules. As a retiree, you may have a pension, Social Security and annuities generating income that will one day be given to the nursing home because income is hard to transfer. Pre-planning and an Asset Protection Roadmap can help you protect your assets.

If You Have Disabled Minor Children

If you have a minor child that is disabled, the closer that child gets to 18, the more you need to consider various planning options. If the child has “legal capacity” to sign documents after age 18, financial and medical powers of attorney are a must. If not, then be sure to seek guardianship and conservatorship over that child. This will ensure that you have the authority to manage his or her affairs after the age of 18. Medicaid and several other benefits may be available to him or her, and you must be prepared to gain access to these.

Medicaid Planning for Unmarried or Widowed Persons

Medicaid is designed to maximize asset protection for married couples, but there are still several very beneficial planning strategies if you’re single. This article is not the place to get into all of the details, but prior knowledge is key to ensuring you’re ready. If you’re single, the key is to see an expert early on so you can take advantage of these strategies. Don’t wait!

Establish Your Strategy Now

We are all clinging on to our youth and independence- no one loves the idea of getting old. But keep in mind, planning for what is to come gives you confidence that your future is secure, assures you that your wishes will be met, and preserves and protects your family’s wealth.

If you have questions about Medicaid pre-planning or want additional information about affording long term care while protecting your assets, contact us for a free consultation or an Asset Protection Roadmap.