People in different circumstances require different types of support. Estate planning can be as much about comfort during retirement as it is about ensuring that an individual leaves behind a meaningful legacy.
Proper estate planning can include Medicaid planning. This process helps optimize an individual’s chances of qualifying for Medicaid benefits when they need more intensive medical support later in life. Generally speaking, planning early is better than planning at the time of applying.
When is the ideal time to begin the Medicaid planning process?
People should plan years in advance
The need for advance planning for Medicaid benefits is not just about the possibility of cognitive decline and being incapable of planning later in life. There’s also the risk of a Medicaid penalty to consider.
When an eligible individual applies for Medicaid, the state doesn’t just look at their current assets and income. It is standard practice to look at 60 months or five years of financial records.
Any large gifts or transfers that occur during that time could result in a penalty. An older adult may need to pay their own care costs to make up for the amounts that they transferred or gifted to others before applying for Medicaid.
The surest way to secure Medicaid when benefits become necessary is to ensure that any major financial moves occur at least five years before the older adult requires benefits. For many people, Medicaid planning can be part of the estate planning review process that they engage in as they begin retirement.
Learning more about Medicaid benefits and elder law matters can help people determine what steps they need to take for their own protection. Moving assets to a trust, adding co-owners to certain resources and making other strategic moves early can increase an individual’s chances of qualifying for Medicaid quickly when the need for benefits arises.