When it comes to paying the costs of long-term nursing home care, families can easily exhaust all of their savings trying to cover the bill. For nursing home residents, the costs of long-term care can diminish your estate to the point that you have nothing left to pass on to your family. The good news is, there are steps you can take to save as much of your assets as possible while still receiving the care you need. Our attorneys can help guide you through the process of Medicaid crisis planning.
Timing is Crucial in Medicaid Crisis Planning
The first thing to understand is that, with Medicaid crisis planning, timing is crucial. The sooner you start the planning process, the better your chances are of saving as much of your assets as possible. Because this is a time-sensitive issue, it is recommended that you seek the assistance of experienced Medicaid attorneys who can guide you through the process while you focus on the necessary care for yourself or your loved one.
Through Medicaid crisis planning, our firm can help to identify important legal issues that apply to your situation, develop a plan, recruit and instruct the necessary professionals to help implement your plan, and assist with your Medicaid application so that it will be successfully approved.
“Spending Down” Does Not Preserve Assets
Typical advice for Medicaid patients preparing to enter a nursing home is to “spend down” their assets. This term refers to using your assets to pay for health care costs until you are eligible for Medicaid coverage since there are asset and income limitations. What this really means is that you spend your money on your health care until your assets are all but depleted. The trouble is, you are unable to preserve any of your assets that way.
Strategies That Actually Preserve Assets
There are some strategies that can be used to preserve your assets while still allowing you to become eligible for Medicaid coverage for your nursing home stay. For example, if you have debts such as a mortgage or a car loan, you can use your assets to pay those down or pay them off completely. You can perform needed maintenance or remodeling on your home. Since you are allowed to have one vehicle, you can buy a new car to replace an older one. Purchasing long-term care insurance and policies to cover funeral costs are also good options.
By using your assets in this way, you can still preserve your Medicaid eligibility and even become eligible more quickly. You will still be preserving your assets for your well spouse or other family members. These purchases will benefit your well spouse while you are in the nursing home.
Consider Ways to Benefit from the Community Spouse Resource Allowance
If you are married, your spouse is entitled to a Community Spouse Resource Allowance. This allowance is equal to half of the countable assets that are shared by the couple in question. A minimum Community Spouse Resource Allowance is also available. This is the amount that the healthy spouse can keep, even if it is more than half of the shared countable assets. The Community Spouse is allowed to keep 100% of the married couple’s combined assets up to the current minimum allowance and 50% of maximum allowance.
Determining Your Snapshot Date for Establishing the Allowance Percentages
In order to establish the total amount of countable assets and calculate the Community Spouse Resource Allowance, Medicaid will set the snapshot date. This is typically the first day of the month of nursing home institutionalization for the Medicaid recipient. If the recipient is not institutionalized, then Medicaid will use the date it was determined that the medical requirements were met.
One useful strategy is to have as much money and assets as possible as of the snapshot date in order to increase the percentage of the Community Spouse Resource Allowance. Once the institutionalized spouse has qualified for Medicaid long-term care assistance, the community spouse’s resources are no longer countable.
Early Medicaid Planning is a Must!
When you are budgeting for the future, you should certainly be aware of potential long-term care costs. It can be hard to imagine the possibility that you will no longer be able to handle all of your own day-to-day needs. However, studies show that most seniors in the United States will eventually require assistance with their daily living. Long-term care is very expensive and, for many, Medicaid is the solution. Before you need Medicaid crisis planning, early Medicaid planning may help to avoid that crisis.
Join us for a free seminar today! If you have questions regarding Medicaid crisis planning or any other Medicaid or elder law matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us in the Charlotte or Huntersville, NC area at (704) 944-3245 or for individuals in Kentucky at (606) 324-5516 (Ashland, KY) or at (859) 372-6655 (Florence, KY).