As we enter our twilight years, Medicaid becomes much more important, if not vital to our long-term planning. After all, nursing homes can cost well over $100,000 a year, and this cost is not covered by Medicare. And, for each dollar that goes to your long-term care or the nursing home, is another dollar taken away from your kids and grandkids. Indeed, without proper planning, you could find that the generational wealth you created as your legacy, disappears into the wallets of the nursing home and medical industry.
Long-term care insurance and Medicaid
If you are just now thinking about long-term care, depending on your age, you may have more or fewer options. If you are over 60 years old, long-term care insurance is likely prohibitively expensive. Though, if you are under 60, you could look into adding this type of insurance to your estate plan.
The other option that many seniors want to utilize is Medicaid. This can make more financial sense than long-term care insurance, depending on your specific situation. Because it is only for low-income citizens, there are eligibility requirements.
Medicaid programs are run differently from state to state, and as such, if you move outside of Kentucky, you may need to update your estate plan to make sure your plans are still legally enforceable. This is true of even the income and resource limits to qualify, and it can vary wildly. Income limits can be anywhere from $800 to $2,000 a month, and your total resources can be limited from $2,000 to $15,000. Of course, married applicants have higher limits, and even if only one spouse applies, they may still qualify for the higher eligibility.
How do I qualify?
In two words: Medicaid trust. The technical term for these trusts is Medicaid asset protection trusts, but they also go by Medicaid qualifying trust or home protection trust. To create this type of trust, you transfer your assets to the irrevocable trust during a “spend down” phase. Though, since all asset transfers are subject to a look-back period, which is usually, 5 years, this spend-down phase must occur prior to this period. The Medicaid trust assets are then protected, and you can then, qualify for Medicaid in Bowling Green, Kentucky.