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  • Writer's pictureMcNickle & Bonner

Medicaid Planning Tips to Protect Your Assets and Qualify for Medicaid

For seniors, many of whom will need long-term care, the importance of Medicaid planning cannot be overemphasized.

According to the U.S. Department of Health and Human Services, a person 65 and above has a 70% chance of requiring long-term care and support.

Unfortunately, long-term care is expensive. The median cost of long-term care in a private room is about $100,000. And many seniors that do not want to spend their life savings on long-term care turn to Medicaid.

However, Medicaid is needs-based.

You must be classified as low-income to qualify. For a household of one in Pennsylvania, you must have an annual income of less than $18,075 before taxes to be eligible for Medicaid.

How do you protect your savings from being wiped out by long-term care and still qualify for Medicaid? Here’s where Medicaid planning steps in.

Experienced PA estate planning attorneys can help with legal strategies to help you meet your needs. Below are some Medicaid planning techniques.

Start planning as soon as possible

To escape funding long-term care with their savings and qualify for Medicaid, many people transfer and gift assets to their loved ones.

However, Medicaid has a five-year (60 months) lookback period. This means the government will look at your finances for the five years before application. If you’ve transferred assets within this period to meet Medicaid eligibility, you could be penalized and become ineligible.

Hence it’s important to begin Medicaid planning at least five years before you’ll need long-term care. Since the chances that seniors will need long-term care are sky high, you need to begin planning today.

Even if you’re healthy, you can never tell what’s around the corner. No matter what happens, Medicaid planning will ensure you preserve your assets and get the long-term health care you deserve.

Create an irrevocable trust

To reach Medicaid’s asset limit, a simple strategy is converting non-countable assets into uncountable ones. One way to do this is by creating an irrevocable trust.

It allows you to transfer the ownership of assets, such as a home, into a trust, enabling you to transfer them to your children and loved ones as an inheritance. By creating an irrevocable trust, you are no longer considered the assets owner and will have no access to them.

You can put assets of any value in an irrevocable trust, and they’ll not be counted as an asset by Medicaid.

Contact an elder care planning attorney

Medicaid is complicated. The rules and regulations are very complex for a typical person to understand. Navigating it on your own may lead to disqualification, which means you may have to eat into your savings to finance long-term care.

Whether you’re transferring assets or placing them in a trust, you need to do it the right way, or else, you risk getting penalized.

If you’re in Pennsylvania, the experienced elder care planning attorneys at McNickle & Bonner can ensure you qualify for Medicaid without losing your assets using the above strategies and others. Call us for free to get started.


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