When you have been fully capable throughout your life, the concept of long-term care can seem alien to you. This may be especially true if you have taken good care of your health throughout your life. You could assume that it is unlikely that you ever need long-term care, but cannot overlook the costs of long-term care should you ever need it. Here, our Charlotte Medicaid lawyers will explain Medicaid countable assets.
Longevity plays a factor in the need for early planning
First of all, we should take a look at longevity. It would be logical to assume that healthy people are going to enjoy a good long life, and in fact, the oldest segment of the population is growing faster than any other. The Social Security Administration tells us that the life expectancy for a man who is turning 67 today is 85 years; for a woman of the same age, the life expectancy is 87 years.
People who reach their mid-eighties often do require long-term care. A leading culprit is Alzheimer’s disease. This disease strikes up to 45 percent of people who have reached the age of 85. When you consider all of these facts, you can see why long-term care should be on your radar when you are developing a plan for aging. Our Charlotte Medicaid lawyers are here to get you started planning.
Nursing home asset protection
Long-term care is quite expensive, and Medicare will not help with these costs. Medicare will cover convalescent care, but it does not cover custodial care. You can protect assets as you prepare yourself for possible long-term care costs if you take steps that lead to Medicaid eligibility. This government health insurance program does pay for long-term care.
Medicaid Countable assets and resource allowances
There is a $2000 limit on countable assets for an individual, but some things are not countable, including your home (with an equity limit of $552,000). Plus, if you are married and you apply for Medicaid while your spouse is still capable of independent living, your spouse could keep half of the assets that are considered to be Medicaid countable assets. This is called the Community Spouse Resource Allowance.
The maximum Community Spouse Resource Allowance in North Carolina for 2017 is $120,900, and the minimum is $24,180. When it comes to Medicaid countable assets, you could give them to your loved ones before you apply for Medicaid coverage. Keep in mind that your actions are subject to a 5 year Medicaid look back, which means that you will be responsible for repaying the government for any assets that you gave a way with in 5 years of applying for Medicaid. It is a complex system that our Medicaid Attorney can help you navigate.
What about placing Medicaid countable assets in a living trust?
A revocable living trust can be a good estate planning choice for many people, and you do not have to be extraordinarily wealthy to realize the benefits. However, a living trust will not satisfy all objectives. Many people seek eligibility for Medicaid late in their lives because this government-run health insurance program pays for long-term care. The majority of seniors will someday need help with their activities of daily living, and Medicare does not pay for this type of assistance.
If you convey assets into a revocable living trust, they would be counted by the Medicaid program if you were to look at the program for long-term care assistance. Since this type of trust is revocable, you can take back personal possession of the assets at any time, and you can also act as the trustee and the beneficiary while you are living. Due to the fact that you retain this level of control, the assets would be counted by Medicaid.
Charlotte Medicaid lawyers suggest using Medicaid trusts
Though assets that have been conveyed into a living trust would be countable for Medicaid purposes, there is another type of trust that you could utilize if you want to get assets out of your own name. In addition to revocable trusts, there are also irrevocable trusts that you cannot rescind or dissolve. Assets that have been conveyed into an irrevocable Medicaid trust would not be countable.
Plus, if you have income producing assets, you could create an income only Medicaid trust. The principal would not be counted, but you could continue to receive income from the earnings of the trust before you apply for Medicaid. However, there are asset limits that you must stay within to qualify for Medicaid, so that income may be absorbed by the program if you do eventually qualify for Medicaid to pay for living assistance.
Join us for a FREE seminar today! If you have questions regarding a long-term care, Medicaid or any other elder law matters, please contact the attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (704) 944-3245 in the Charlotte or Huntersville, North Carolina area, in Ashland, KY at (606) 324-5516 and for Florence, KY (859) 372-6655 . We are here to help!
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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