Medicaid planning is vitally important to ensure that you are able to afford essential healthcare services that you may need as you get older or if you get sick. Medicare and private insurance provide no coverage for custodial care, which is the type of care that many people require in a nursing home or provided at home as they age and develop infirmities.
Because custodial care is very expensive and isn’t covered at all by insurance, getting Medicaid coverage may be the only way to avoid paying out of pocket for very costly and essential care. Putting a plan in place to qualify for Medicaid is necessary for most people to get this coverage when they need it because Medicaid is means-tested and having too many assets disqualifies you from benefits.
Frank & Kraft can help you to determine if you need to make a Medicaid plan and can assist with the process of creating and implementing your plan. You should not try to handle Medicaid planning on your own, as many people who do try to make plans on their own end up making damaging and costly mistakes. You can give us a call to talk with Medicaid planning attorneys about the planning process or read on to find out about some of the most common mistakes that are made when people try to create a Medicaid plan.
Mistake: Failing to Make a Plan
This is one of the biggest and most common mistakes people make. Many people do not realize how important making a Medicaid plan is because they think Medicare will cover the care they need. This is not true — Medicare is likely to cover no nursing home care at all unless you meet very specific requirements for needing skilled nursing care. Those who do not make a plan could find themselves facing substantial financial hardship, especially as Wall Street Journal indicates that a person who has turned 65 has around a 70 percent chance of needing nursing home care at some time during the course of the rest of their lives.
Mistake: Waiting too Long to Make a Plan
Waiting is another big problem and common mistake. Many people assume they won’t need to worry about protecting assets in case they need costly nursing home care until they are much older. Unfortunately, you never know when an injury or illness could occur that necessitates you get care in a nursing home. Further, Medicare also has a five year lookback rule which reviews five years of past transactions starting from the time you apply for benefits. If you transferred assets for less than fair market value or gave assets away during this time, you could face a period of disqualification from Medicaid coverage. You want to get your plans in place ideally at least five years before you need Medicaid so you don’t run into problems with the five year lookback rule.
Mistake: Using the Wrong Legal Tools to Make a Plan
Many people also make a big mistake in the tools they decide to use when creating a Medicaid plan. For example, if you transfer assets to a living trust, you may think those assets are safe because the trust owns the wealth and you don’t. However, because you retain continued control over trust assets and continued access to trust assets, the wealth in your living trust still counts for purposes of determining Medicaid eligibility and it is thus still at risk.
Mistake: Giving Away Assets
Finally, many people simply give away assets in an attempt to get Medicaid coverage. This won’t work and will trigger disqualification under the five year lookback rule.
Getting Help from Medicaid Planning Attorneys
Medicaid planning attorneys at Frank & Kraft can provide the help you need to avoid mistakes that undermine your efforts to create a Medicaid plan that works for your situation. When you work with a compassionate and knowledgeable legal professional at our firm, you can rest assured you will get the advice that you need to put the right plans in place to protect your assets and secure your future.
Don’t take a chance on not being able to leave a legacy to loved ones — work with Frank & Kraft today to put your plans in place. To find out more about the ways in which we can help with the Medicaid planning process, join us for a free seminar. You can also give us a call at 317-684-1100 or contact us online at any time to get your plans underway.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.