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By John R. Merlino Jr. Esq.
Founding Attorney

The cost of long-term care in the United States is steep and continues to climb year after year. There are few that can afford long term nursing home or assisted living care for very long and even fewer that can do so without having assets rapidly depleted down to nothing. Medicaid is a program administered on both the federal and state level that helps cover the cost of long-term care for individuals with limited income or financial resources. Many will look to Medicaid in later years to help cover the substantial costs of long-term care, but qualifying for these much-needed benefits can be difficult.

What is Medicaid Planning?

There are strict requirements for qualifying for critical Medicaid benefits. One of the most stringent requirements is the income and asset limit. The problem is, however, that many people end up falling nearly outside of the income and asset limit. This is a difficult position to be in as a person may make slightly too much to qualify for Medicaid, but not have enough to cover all expenses for very long. Medicaid planning helps individuals that will eventually need to access Medicaid benefits, but allow them to protect other financial resources so that they will have access to money to cover other cost of living expenses.

For purposes of determining Medicaid eligibility, all income that a person receives from any source will be included in counting towards the income limit. Income sources may include job wages, Social Security Income, payments from annuities, pension payments, alimony payments and more. Assets are also counted in determining Medicaid eligibility. Countable assets, or resources such as investment accounts, real estate, financial accounts, cash, and more will be included. Some assets such as a vehicle, household items, primary residence home, among other things, will be exempt from the calculation.

Medicaid planning utilizes a variety of means to protect assets and exclude them from calculations for Medicaid purposes. For instance, gifting to family members and employing irrevocable trusts may be used in Medicaid planning. Transferring ownership of a home or other asset to intended beneficiaries may also be utilized. A word of caution, however, is needed. There is a Medicaid look-back period. The look-back period looks to prevent people from intentionally giving away assets for the sole purpose of trying to qualify for Medicaid benefits. This means that certain assets transfers made within 5 years of applying for Medicaid benefits will be penalized. You could be fined or be disqualified from receiving Medicaid benefits for a certain period of time.

Estate Planning Attorneys

When properly executed, Medicaid planning will allow you to preserve your assets so that they are not quickly exhausted covering the heavy costs associated with long-term care. Talk to the knowledgeable attorneys at Merlino & Gonzalez about your Medicaid planning options and how they come into play with your estate plan. Contact us today.

About the Author
John is a fierce advocate and the office guru for problem-solving and brainstorming. He guides clients through every stage of a real estate transaction from offer to contract, navigating through nerve-shattering home inspection and title clearance concerns, maintaining constant contact with lenders, conducting the actual closing, and continuing to advise clients with regard to any post-closing concerns.  John brings a practical and fair-minded approach to the process which has earned him the respect of his clients and peers.