Many older adults preparing for their golden years want to age in place. They aim to keep their cost-of-living expenses low by remaining in their home and relying on people they know for basic support. However, not everyone is fortunate enough to achieve that goal.
Some people require professional medical assistance later in life. Those individuals may have long-term care costs that add up to thousands of dollars per month. In most cases, the only way to guarantee access to benefits that help cover those costs is through advanced planning.
People preparing for retirement can plan ahead of time, which can help them qualify for Medicaid if they need in-home nursing support or decide to move to a nursing home. Medicare won’t cover those costs regardless of need, so advance planning is important.
Qualifying for Medicaid can be difficult
Medicaid has very strict limits that apply when people seek benefits. Specifically, there are rules limiting both income and countable assets for Medicaid applicants. The Medicaid program looks back at 60 months or five years of financial records when determining if people are actually eligible for benefits.
Advance planning is important or people are subject to a penalty. Any gifts or transfers made in the years leading up to their application can count against them when they apply. They may need to pay out of pocket for a specific number of months of care before Medicaid coverage starts.
Benefits can diminish an individual’s legacy
The other main concern for those who might eventually need Medicaid is that the state may make a claim against their estate after they die. The property that they want their children or other beneficiaries to inherit may end up covering their long-term care costs to reimburse Medicaid.
The only way to avoid those negative outcomes is through advanced planning well before Medicaid benefits become necessary. Those who address the possibility of needing long-term care in the future before their health declines protect themselves and others.
People who plan for retirement can feel more confident about getting benefits quickly when they need support later in life. They may also have less reason to worry about whether their loved ones inherit anything of value from their estate.
Addressing long-term care costs as part of the broader estate planning process is a smart move for most people thinking about their golden years and their final legacy. Care costs can be difficult to cover without advanced planning and can significantly reduce the value of an estate after an individual dies
