Medicaid Planning

Medicaid Planning: What It Is & Why You Need It

The term “Medicaid planning” is actually a broad term that includes a wide variety of services. The single factor that unifies all of these services is that they have something to do with helping you prepare or plan to apply for and receive Medicaid benefits.

However, in the context of long-term Medicaid planning, the discussion usually centers around planning for long-term care in retirement homes, skilled nursing facilities, and similar facilities.

You may immediately think: “I don’t need Medicaid, and, more importantly, I don’t qualify for it.” But you might be surprised.
While it may be true that you don’t, by true definition, “need” the free financial assistance that Medicaid can provide, you can still benefit from it and use it to protect your assets for your family.

Meanwhile, you may not technically qualify for Medicaid right now, but Medicaid planning is in large part about making smart financial decisions that help you qualify while protecting as much of your accumulated wealth as possible.

That’s where Hunter Sargent, PLLC, can come in. As experienced Medicaid planning attorneys in Denton, Texas, we can help you build a solid long-term financial and estate plan, complete with Medicaid planning.

The Benefits of Medicaid Planning with an Attorney

Why should you care about Medicaid planning? Why is it worth your time?
There are two key reasons: Medicaid planning helps you cover the costs of long-term care, and you can do so while keeping valuable assets like your house in the family even after your passing.

Cover Long-Term Care

Here’s the most important starting point when you’re trying to decide whether Medicaid planning is worthwhile for you: Medicare does not cover long-term care. So, even when you ring in that fabled 65th birthday, you are no closer to having your future nursing home care needs covered than you were at 64.

But Medicaid can and does cover long-term care. To be clear, it doesn’t automatically cover long-term care, but with proper planning, it can. And the savings that benefit can generate will add up over time.

Consider the fact that the monthly cost of a private room at a nursing home is projected to be $9,240 by 2031. That adds up to more than $110,000 per year. You may not need it now, but Medicaid could prove to be extremely helpful.

Keep Your House

For those who already know Medicaid can cover long-term care costs, there is yet another hurdle placed in front of them by misinformation from others: They believe that they will automatically lose their homes after they die if they accept Medicaid.

While this is a real, possible scenario that does happen in some cases, it is not a foregone conclusion. In fact, with the proper Medicaid planning, you can keep your house, qualify for long-term care assistance from Medicaid, and keep your home in your family long after your passing.

This is one of the central functions of Medicaid planning lawyers, and it’s one that few people realize is actually on the table.

Understanding Medicaid Trusts & Asset Protection Strategies

You might have seen the income and asset requirements above and immediately assumed Medicaid was off the table for your long-term care coverage. But this is one of the primary points of Medicaid planning: configuring your financial situation so that you retain as much familial wealth as possible while meeting Medicaid eligibility requirements.

Medicaid planning attorneys achieve that objective for their clients by employing one or more asset protection strategies, including the establishment of Medicaid trusts. Here are a few examples:

Establishing Miller Trusts

A Miller trust is a highly specific financial vehicle commonly used when Medicaid applicants have too much income to qualify for long-term care benefits. Put simply, this trust allows you to direct your excess income into it. That way, you qualify for Medicaid benefits.

With a Miller trust, you may have access to a small stipend for basic needs, but otherwise, your income in the trust will be out of your reach.

Transferring or Spending Down Countable Assets

What about assets? The first thing to understand is that not all assets will count against the limits set for Medicaid eligibility. Two notable exceptions are your home and vehicle (up to a certain value).

But many people over age 65 find that they do, in fact, exceed the limits for countable assets. In these cases, the Medicaid planning attorney at Hunter Sargent, PLLC, can help you transfer the excess countable assets into uncountable assets.

That “transfer” can be somewhat literal or just be a matter of spending down the value of the countable asset. For example, the money in your bank account is a countable asset, but your home (up to a certain value) is not. So, if you spent the excess cash on needed home improvements before applying for Medicaid, you could feasibly reduce the value of your assets to the point that you are eligible for Medicaid.

Working with an Attorney

The above are just some of the most basic asset and income strategies involved in Medicaid planning for nursing home care. Even these basic strategies are complex legal and financial matters that often require the expertise of an experienced lawyer.

That’s why one of the broadest and most effective Medicaid planning strategies can be to simply contact a qualified Medicaid planning lawyer. The right attorney can provide customized advice and guidance for your unique situation, giving you the best possible chance of qualifying for the extremely valuable long-term care benefits of Medicaid.