3 Planning Methods Everyone Needs to Know About Using Medicaid and NOT LOSE their Assets

We had an interesting discussion with “Jane” (not her real name) in our office the other day and it was such a great and relevant question we thought we should share it with you as well.

Here’s the issue/question Jane asked, “How does someone qualify for Medicaid without losing most, if not all, their assets?” Great question!

We actually get this question (or one very similar to it) all the time. While everyone’s situation is different and usually requires some customization, there is a foundational strategy we start with to help everyone understand what is needed. For example, our main foundational strategy starts by using special planning techniques to make appropriate transfers at least five years before applying for institutional level of care benefits. This planning is important in advance of applying and helps put the right foundation in place for more specific changes that may be needed.

Since none of us can predict the future, it’s very hard to know when Jane or her husband, Dick, might need long-term care or other Medicaid benefits. With people living longer and with the fastest growing segment of the US population being people 65 years and older being, it more important than ever for people to do proactive planning if they want to be able to pass any of their wealth to their heirs. This was the discussion we had with Jane and her husband in helping them start to plan for their long-term care and to be ready for Medicaid benefits.

It’s important to understand what we mean by “proactive planning” as it pertains to this particular topic. Our definition of “proactive planning” is utilizing strategies that can protect the assets of individuals who may one day require long-term care.

Long-term planning is the best method of proactive planning and our clients who use this type of strategy typically save more than twice what a client will save when they have a crisis and need to more immediate planning. To help you understand what you should be thinking about today so you can be effective with your planning, we would like to share 3 of our most common long-term planning methods we use to get the discussion started.

Three common methods for long-term planning:

  1. Our specialized Medicaid Trust is our primary vehicle for long-term proactive planning. Property placed in this trust can be 100% protected after five years. Typically placed in this trust are residences, (both in state and out of state), funds, annuities, and life insurance policies. This is a cost-effective way to protect your resources.
  2. Personal Care Agreements are another strategy we use. These agreements are especially effective when a family member is caring for a senior loved one. There is no five-year lookback because it is a fee for service contract. We’d be pleased to prepare a Personal Care Agreement for you.
  3. If you don’t want to engage in either of these strategies, the minimum planning tool requires an Asset Protecting Power of Attorney.

These are the three foundational strategies we use to help get you started prior to customizing them for each individual. Hopefully this gives you a bit more background of what you might want to think about prior to determining the proper plan for your individual needs.

If you would like to discuss this further, please give us a call and we would be happy to sit down with you and give you some more detail around these options. As with any of our initial exploratory meetings, this is a “complementary” meeting and never a charge to at better understand the law and your individual options. It’s a great place to start as you learn more about how to protect your estate, keep more of what you have worked hard to earn, and give you more peace of mind.

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