Your retirement plans probably focus mostly on Medicare for your health care needs, not Medicaid for long term care. After all, Medicaid is a need-based program, and you have set aside funds for years to save for your retirement.
You probably assume you will not have to worry about qualifying for Long Term Care Medicaid because you own your home and are in good health as you reproach retirement age. However, no one knows what will happen when they grow older. Some people will fall or become physically frail and require nursing home care. Others may develop Alzheimer’s Disease or dementia, making them dependent on other people for their care and safety.
If you do not plan to ensure that you can qualify for Medicaid when you need it, then your legacy could be at risk after you die.
The state will want its money back after your death
To qualify for Long-Term Care Medicaid benefits, you have to show that you have limited assets. Typically, your home will not count against you, but your savings accounts and other assets will.
Even though the home is not countable for purposes of initial eligibility, Medicaid will keep track of expenditures made on your behalf, and under the Estate Recovery Program, can lien that property at your death to recoup those expenditures. Advanced planning can change that result, but it is complicated and needs to be done carefully, and often well in advance of the need for Medicaid. If done properly, however, it can streamline the process and protect the property you would like to pass to your loved ones after your death.
How Medicaid planning works
Planning to secure Medicaid benefits often involves intentionally divesting yourself of assets. This may involve outright gifts of assets or changes in title to the real estate, or it can involve creation of irrevocable trusts.
Those who plan can limit the likelihood of their most valuable property going to the government instead of to their loved ones after they are dead. Planning for Medicaid, even if you hope to never need it, can help protect the people you love and solidify the legacy you wish to leave.