Many of us do our very best to prepare for the inevitable – we will all pass away. We create a will and ensure our assets go to those persons, entities, or charities with as much planning as we can. But have you asked yourself what happens if there is no money or assets when you pass on? You may find that Medicaid becomes a necessary resource.
Many of us don’t understand that helping or gifting a family member, having to live on social security without much in savings, or paying federal tax are not the things that cause retired persons to bankrupt or run out of money.
Well if those things aren’t what we need to be concerned about what IS? Data shows that around seventy percent of persons over 65 will require some type of long term care during their lifetime. The estimated cost of staying in a nursing home can be upwards of $7,000 per month. At that rate it is not hard to see how quickly your savings can be depleted.
We all want to provide for our spouses, children, and other family members. Information is power so read on for some powerful tips to consider.
Medicaid? And What About Medicare?
These are both types of an insurance that can help you in your planning and in your consideration of long-term health care.
What IS Medicaid? And what IS Medicare?
“Medicaid is a health care program that assists low-income families or individuals in paying for long-term medical and custodial care costs. Medicaid is a joint program, funded primarily by the federal government and run at the state level, where coverage may vary.” Excerpt from www.investopedia.com
“Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).” Excerpt from www.medicare.gov.
Now, let’s look at how they play into long-term health care.
Long-Term Health Care With Medicare
- Medicare does not pay for ‘long-term health care’.
- Skilled nursing care (if over 100 days) is defined as long-term health care.
- Even if you do meet the qualifications under Medicare for skilled nursing it can’t be longer than 100 days. An additional requirement is ‘continued improvement’. Unless you are continually improving you will find Medicare will terminate that type of care after only thirty days.
Medicaid and Long-Term Care
- Medicaid does contribute to long-term health care, if you qualify.
- To be eligible you must meet requirements for both a financial and a medical need.
- If you do not immediately seem to meet the requirements, there may be exceptions to the rules that a Legal-Eagles attorney can discuss with you.
- Your eligibility depends mostly on your age, the state you live in (Florida in our case), and the specific Medicaid program.
- Usually persons with Alzheimer’s Disease or other cognitively based diseases can qualify.
Securing Your Assets
People of all ages think they must avoid having their Last Will and Testament go into probate. This is based on information from their friends, neighbors and family who had or know someone who had a difficult probate. Not all probate matters have issues; in fact our attorneys at Mario, Gunde, Peters, Rhoden & Kelley have completed summary probate for clients in as little as 3 months and ancillary probate in 45 days.
Here are some strategies to protect assets:
- You can earn approximately $1800 dollars per month to receive Medicaid.
- Florida’s constitutional Homestead protection for your primary residence.
- Remember that while Medicaid cannot ‘take’ your home there are times when a lien will be filed and it must be paid off when the last spouse passes or sells the home.
- Using a Revocable Living Trust does not protect assets from Medicaid.
- Talk about using beneficiaries on Retirement Accounts and bank accounts.
- How do Life Insurance Policies play into planning?
- Beneficiaries can be identified by a Pay-On-Death Accounts.Holding real property in the form of Joint Ownership or Joint Tenancy.
- Personal Services Contracts may give you an option to share assets with your family and still qualify for Medicaid.
- Giving gifts to family or friends can effect your qualification for Medicaid.
- Ask your attorney about the simplified procedure for small estates.
Call the office today or use the contact form at the top of this page to arrange a phone or in person consultation with one of our estate planning attorneys. Initial consultations are always at no charge. (321) 631-0506, phones answered and attorneys available 24/7.