There are those who don’t pay particular attention to long-term care costs for two different reasons, both of which are based on faulty reasoning. Some individuals are under the impression that Medicare will take care of all their health care needs once they reach the age of 65, but Medicare does not cover long-term care.
There are also those who have a “it’ll never happen to me” mentality. Current statistics indicate that four out of every 10 people who reach the age of 65 will indeed require long-term care at some point in their lives, and 25% of people who are 85 years old and older are residing in a nursing home at any given time in the United States. So yes, it can happen to you.
If you are concerned about meeting the costs of long-term care given the facts stated above, Medicaid may be an option. To qualify for Medicaid you cannot have more than $2000 in assets, but things like your home, your car, and your personal possessions are exempt and don’t count toward this $2000 limit.
So, in an effort to become Medicaid eligible people often give gifts to their loved ones to reduce their personal assets. This can be a useful strategy, but it’s important to recognize the fact that Medicaid uses a five-year “look back” rule that penalizes applicants who give gifts in an effort to “spend down” to gain Medicaid eligibility within 60 months prior to applying for benefits.
Medicaid can be the solution to a very difficult problem, but it can be complicated to keep your assets in the family while meeting the eligibility requirements. The best way to proceed is to consult with an experienced elder law attorney who will give your situation personalized attention and advise you with regard to the possible use of Medicaid as a way to meet long-term care expenses should they arise at some point in time.
- Show Your Love by Creating an Estate Plan - March 21, 2023
- What You Need to Know About SECURE Act 2.0 - March 14, 2023
- The Lessons from Lisa Marie - March 7, 2023