Creating a comprehensive estate plan requires you to do much more than simply decide who you wish to have your assets when you are gone. The distribution of your estate assets is only a small part of a well thought out estate plan. Other issues, such as incapacity planning, probate avoidance, and asset protection, for example, should also be considered. One other issue that you should consider when creating your estate plan is the possibility that you will need long-term care (LTC) at some point down the road. That possibility, in turn, should lead you to consider adding an Affton Medicaid planning component to your overall estate plan.
Will You Need LTC?
None of us wants to spend much time thinking about the need for LTC. You do, however, need to face the fact that you may end up in a nursing home, or other LTC facility, at some point in the future. Statistically speaking, you stand about a 50 percent chance of eventually needing LTC at the time you enter your retirement years. With each passing year, the odds that you will need LTC increase. BY age 85, your odds of one day needing LTC have increased to 75 percent. The high probability that you will need LTC should prompt you to plan for the possibility in your estate plan.
Long-Term Care Costs
The primary reason why it becomes important to consider your odds of eventually needing LTC is the cost of that care. The state of Missouri, like most states, offers different types of LTC options to those who need it. The cost of that care is high and is expected to continue to rise in the coming years. Currently, you can expect to pay around $5,000 per month for LTC in Missouri. To make matters worse, neither Medicare nor your basic health insurance coverage will likely pay for LTC care. Given that the average length of stay in a LTC facility is 2.5 years, you could easily be looking at a LTC bill of over $200,000.
Medicaid Can Help
The good news is that Medicaid can help; however, you must first qualify for Medicaid benefits. Because Medicaid is a “needs based” program, an applicant must demonstrate a financial need in order to be approved for benefits. To do that, you cannot have income nor assets that exceed the program limits. The income limits are tied to the Federal Poverty Level (FPL) for your geographic area and household size, and are subject to change each year to adjust for the cost of living increase. The asset limit is only $2,000 for an individual, meaning you cannot have non-exempt assets valued above that limit. If you failed to contemplate the potential need to qualify for Medicaid ahead of time, your assets will likely exceed the limit. If so, Medicaid will impose a waiting period during which time you will be expected to “spend-down” those excess assets. In simple terms, this means you will be expected to sell your assets and use the proceeds to pay your LTC expenses. Your retirement nest egg could disappear in a matter of months.
Affton Medicaid Planning
The way to prevent this from happening is to include Medicaid planning in your comprehensive estate plan long before you actually need to qualify for Medicaid. Starting early is the key to protecting your assets and qualifying for benefits because Medicaid also uses a five-year “look-back” period. The look-back rule allows Medicaid to review your finances for the five-year period prior to your application for any less than fair market value asset transfers. If any are uncovered, Medicaid will usually discount the transfer and impute the value of the assets back into your estate when determining your eligibility for benefits. Therefore, it is important to begin your Medicaid planning long before you think you will actually need to qualify for benefits.
Contact Us
If you are interested in more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about Medicaid planning , contact the experienced estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to
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