It can be tempting to think of an estate plan as something for the far-off future. A plan that you hope you won’t need for some time. However, it’s important to remember that the financial decisions you make every day affect the assets that will make up that estate plan.
On April 3, 2020, the New York State Legislature approved a $177 billion state budget, which also included actions on policy issues including an important change to Medicaid community care eligibility.
What changed and when does it go into effect?
The new legislation imposes a 30-month look-back period for Medicaid community care applicants, an extension of the current 3-month look-back period. This will bring the home care program’s look-back period closer to the five-year look-back for nursing home Medicaid.
All changes to New York’s Medicaid laws go into effect on October 1, 2020. Many who are planning to use Medicaid’s service in the future and wish to remain living at home risk being caught by surprise.
What does that mean?
As there is a resource limit for Medicaid, there is an income cap. You must qualify for the income requirements to be eligible. A look-back period means Medicaid will look at your financial transactions and asset transfers for the 30-month period to see if you’ve been giving away money to meet the income requirement. There is a penalty if you do so.
Why is this relevant to my estate planning?
It is more important than ever to plan accordingly and, if necessary, act now before the new community care Medicaid laws go into effect. Proper financial planning should be completed before this look-back extension begins. If you are planning for a future that could involve home care, plan to reduce your estate well in advance of this 30-month look-back period.
These new laws will negatively affect many people financially. Give yourself peace of mind and decrease worry amid the current public health crisis. Proactively protect your estate with informed decision-making and a solid financial plan.