Assets and Medicaid planning: How can I ensure a smooth transition?

When planning to receive Medicaid benefits, it’s critical to have a Medicaid asset protection plan in place to ensure you’ll receive high-quality care while protecting the savings you’ve worked hard to collect. A Denver elder law attorney can help you with proactive Medicaid estate and asset protection planning. At Colorado Estate Matters, we can guide you through the complex process of protecting your assets while transitioning to Medicaid.

assets and medicaid planning

Why do I need Medicaid asset protection planning?

Before Medicaid covers your long-term care costs, you must exhaust a large portion of your assets. You must have income and assets under a certain threshold to receive long-term care. Your income limit is determined by the care you need. However, it is usually around only $2,000 for an individual.

Not all assets are counted toward your limit. A non-countable asset is your personal belongings, one vehicle, and your primary residence. However, your primary residence is not exempt from the Medicaid Estate Recovery Program (MERP), which receives reimbursement for care from whatever is left in your estate, such as your home.

The requirement to exhaust most of your assets often leaves you with little to no savings for your beneficiaries. As such, you need help from an elder law and Medicaid asset protection planning attorney to help you proactively plan for the future.

What steps should I take to ensure a smooth transition to Medicaid?

If you’re planning to transition to Medicaid, there are steps you can take to help you arrange and manage your financial affairs. These steps will help you provide peace of mind for your beneficiaries. Here are some actions that can strengthen your Medican asset planning approach.

1. Start planning early

Medicaid will penalize you for transferring assets within five years of applying for Medicaid. Depending on the value of the transferred assets, you may have to wait for a period to be eligible to receive benefits.

2. Create a trust

A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust that can be used to protect assets from being considered by Medicaid. It can’t be changed or revoked once created, which must be exempted from Medicaid’s asset limit.

3. Gift assets

You may consider gifting your assets to someone before applying for Medicaid so they don’t count toward your eligibility. While this is an option, you must be sure you don’t gift any assets within the five-year Medicare application period.

4. Obtain long-term care insurance

This insurance can help you cover the costs needed for long-term care, reducing your need for Medicaid. However, it’s often costly, and you’ll likely be required to undergo a medical exam. You may be denied coverage if you have a pre-existing condition.

5. Use a qualified income trust (QIT)

You can use a QIT to receive income from your assets without them counting toward Medicaid’s limits. The income is paid to a trustee, who then pays it to you or your beneficiaries. Setting a QIT up properly is important, as Medicaid frequently audits these trusts.

6. Consult with a Denver elder law lawyer

We specialize in elder law and know Medicaid’s rules and regulations. We can help you protect your assets and ensure a smooth transition to Medicaid. As you age and become eligible for Medicaid, it’s important to have an experienced elder law lawyer in Denver to help plan to protect your assets for your beneficiaries.

How do I get help putting a Medicaid asset protection plan in place?

Our Denver elder law lawyers can help you. Schedule a no-obligation consultation with our team at Colorado Estate Matters today. Contact us at (303) 713-9147 for a free consultation to learn how we can help you protect your assets while planning your estate.

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