A substantial portion of the elderly population in the U.S. ends up relying on nursing homes for care in their later years. For this considerable expense, aging residents of New York may be counting on Medicaid to help with the cost of necessary healthcare and nursing home stay. Unfortunately, what many individuals may not realize is that Medicaid is a complex system of regulations and requirements, and, without the proper Medicaid planning, many individuals find themselves ineligible to receive benefits when the time comes.
One of the most notable requirements is that an individual’s net worth must be below a certain threshold. The Medicaid program does not merely look at bank accounts, but it takes into consideration essentially every asset a person owns. On top of this is the stipulation that the individual must not have given away anything of value over the course of the previous five years, including birthday and Christmas presents. If the total value of gifts given over the last five years exceeds a certain amount, the individual will be ineligible for Medicaid.
There are planning methods individuals can employ to help them become Medicaid eligible in the future. However, it’s important to note that the earlier these are utilized, the better, and preferably at least five years before nursing home admittance is needed. Many individuals may find it helpful to consult an attorney with experience in Medicaid planning and elder law to help with the implementation of these strategies.
Simply giving away assets is one approach, but can require careful planning, especially when it involves stocks and bonds or real estate, as otherwise the gift-giver may face tax liability. There are also ways a New York Medicaid planning attorney can help protect real estate through carefully detailed deeds and documentation. Specialized irrevocable trusts, sometimes informally referred to as “Medicaid Trusts” are another possibility individuals may wish to discuss an attorney. Since basic estate planning rarely includes any planning for Medicaid eligibility, it can be critical to consult an experienced elder law attorney to help ensure these issues are addressed before it’s too late.
Source: limaohio.com, “Legal-Ease: Asset protection from nursing home expenses“, Lee R. Schroeder, May 27, 2017