People who anticipate that they might need Medicaid to pay for long-term nursing home care, need to plan ahead for it, if they hope to leave their heirs with an inheritance.
The government will help pay for long-term care in a nursing home through Medicaid, but Medicaid is only meant to pay for the poor. It is for people with no resources to pay on their own. Therefore, going on Medicaid is not a good way to preserve assets from nursing home expenses.
One way around this, is to intentionally not have any assets. Everything can be given away to heirs before going into a nursing home and requesting Medicaid, right?
Not so fast. It is not quite as simple as that. Planning for Medicaid needs to be done carefully, as the Wills, Trusts & Estates Prof Blog discusses in "Planning Ahead For Medicaid Approval."
The first thing to be aware of is that the government has clawback provisions that prevent people from giving away assets for the purpose of receiving Medicaid.
Any transfers made within five years prior to requesting Medicaid, will be scrutinized. If the transfers were for less than fair market value, then Medicaid eligibility can be denied.
It is possible to use irrevocable trusts to get around Medicaid eligibility problems.
Needless to say, those trusts need to be created very carefully and they also need to be created ahead of time.
The services of an elder law attorney are absolutely necessary to properly create the trusts.
For more information about elder law and estate planning and valuation in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Wills, Trusts & Estates Prof Blog (June 16, 2017) "Planning Ahead For Medicaid Approval."