2 Reasons Medicaid Planning Should Be Part of Your Trust and Estate Planning

Should you incorporate Medicaid planning into your trust and estate planning? Here are three reasons you should.

Longer life expectancy rates and higher costs of elder care mean Medicaid planning is more important now than ever. Seniors – individuals 65 years and older—may qualify for Medicaid, which is a federal-state program that provides assistance for healthcare costs. Taking the time to go through proper Medicaid planning with a trusted expert is a smart move for two primary reasons:

#1: Ensure Your Assets and Income Fall below the Minimum to Qualify

Eligibility requirements for Medicaid differ from state to state; seniors must also meet the minimum federal standards. If, as a senior adult, you have too much income or too many assets, you may be ineligible for Medicaid. Then, you will have to foot the bill for medical costs on your own.

Rather than having to spend every last penny on healthcare costs, there’s another way. Medicaid planning exists to help you to pay for care while protecting assets for your loved ones today and in the future.

Accountants who specialize in Medicaid planning can help you find ways to make income and assets inaccessible by rearranging finances and sheltering assets. The process may seem complicated, and it is. That’s why it makes all the difference to work with an expert who can help you to make sense of it all and plan most effectively.

#2: Preserve Assets for Loved Ones, Including Your Spouse

By sheltering assets, you may be able to trade countable assets for exempt ones. That can make them inaccessible to the state as they consider your assets and income for Medicaid qualification.

Doing this also impacts the assets you can pass on to loved ones. An example might be using your savings account to pay off a mortgage for your spouse. Or it may mean purchasing a car for a loved one rather than using that money to pay for medical bills and being left with nothing else to provide for your spouse and other relatives.

Because each state has a list of exempt assets, such as the family home, an automobile, term life insurance, and burial plots, you may be able to make adjustments to move assets to this category. Other options to preserve assets include:

  • Establish an irrevocable trust to exclude property from your list of assets
  • Convert assets into a stream of income by purchasing a premium immediate annuity; this enables one spouse to receive a consistent income stream, while the other utilizes Medicaid

Reach Out to Incompass for Expert Medicaid Planning Services

Working with professional accountants who have extensive experience in Medicaid planning can help you to avoid some of the drawbacks and risks. They might include possible look back periods on assets, Medicaid disqualification, and recovery of the estate.

The rules for Medicaid eligibility change frequently and vary state to state. Therefore, this isn’t a task for someone who doesn’t know the ins and outs of the system on a state and federal level. At Incompass, our team can help you to structure your finances and prepare documents to ensure the best possible outcome.

From creating trusts and managing asset transfers to converting countable assets into exempt ones, we will work hard to help you do what is necessary to take care of yourself and your family members. Connect with us online now to get started.

Categories: TRUSTS, ESTATES & FIDUCIARIES.