To many people, estate planning is synonymous with drafting a will and thinking about their funeral preferences. However, people considering their legacies also often take steps to address their likely future needs in their golden years.
Many adults first create their estate plans as they begin preparing for retirement. Others drastically overhaul and expand their documents created years prior to address the unique needs that arise later in life. Estate planning before or early in retirement may help aging adults increase their chances of securing Medicaid long-term care benefits if their health declines substantially later in life.
Financial moves made early can protect assets
Medicaid has limits that apply to income and countable assets. People who wait to address their finances until they need Medicaid coverage are subject to a lookback penalty. A review of five years of financial records is standard when seeking long-term care Medicaid coverage.
Any large transfers or gifts in the 60 months before an application can trigger a penalty that leaves an adult ineligible for coverage for multiple months. Medicaid planning strategies include taking on co-owners for key assets, transferring property to trusts and engaging in a spend-down in cases where older adults have too much property to qualify for Medicaid benefits.
With the right support, Medicaid planning as part of the overall estate planning process can help older adults qualify for Medicaid if their health declines and protect their legacy as well. People who prepare for future Medicaid applications well in advance can improve their chances of getting prompt benefit approval and protect their assets.