Medicaid can help you get the long-term nursing home care you may eventually need, but you must plan for it in order to qualify. By planning for it, you can protect the assets you’ve worked so hard for, while also obtaining the care and benefits that Medicaid can provide.
For more than 35 years, the Raleigh Medicaid planning lawyers at the Brady Cobin Law Group, PLLC, have helped countless North Carolina families make proper arrangements for affording long-term care. We know how to help you preserve your home and assets while still qualifying for Medicaid.
Our respected North Carolina estate planning law firm is proud to help people make thoughtful and smart preparations for their long-term care needs. If you have questions about Medicaid or need help planning for the future, we are here. Contact us today to set up a consultation.[videosingle id=”32585″ /]
How Medicaid Planning Can Benefit You
Medicaid is an important source of benefits for many Americans. It provides significant health care and long-term care benefits for those who qualify. Medicaid provides more benefits in some areas than programs like Medicare.
Unfortunately, to qualify for Medicaid, you must have a low income and low levels of assets. This means that if you’ve spent a lifetime working and saving, you may think that you can’t qualify for Medicaid. But you can.
Medicaid planning can help you secure your assets while meeting the requirements for the program. Planning ahead will allow you to safeguard your assets and property, pass on assets to those you love, and give you peace of mind. The further in advance you begin planning, the better off you’ll be.
Planning for Medicaid is important because asset transfers are subject to a look-back rule. A look-back rule looks at transfers of assets for a five-year period before applying for Medicaid. Any asset transfers during this period may subject you to penalties that can delay your benefits and cost you money. By planning ahead, you can make sure you minimize your costs and maximize your benefits.
Income and Asset Requirements for Medicaid
In North Carolina, you must have low income and a small amount of assets to qualify for Medicaid. According to the North Carolina Department of Health and Human Services:
- Income requirements: An individual must have a monthly income of $1,012 or less, and a couple must have a monthly income of $1,372 or less.
- Asset requirements: An individual may not have more than $2,000 in assets, and a couple may not have more than $3,000 in assets. Assets include contents of bank accounts, cash on hand, stocks, bonds, insurance policies, and any other investments. It’s important to know that your home, a car, furniture, clothing, and jewelry are not counted as assets.
These are very low amounts of income and assets, but an experienced Medicaid planning lawyer can help you structure your income and assets so that you qualify for benefits while retaining use of your most important possessions.
It’s also important to know that in North Carolina, you may be able to exceed the established level of income and still qualify for Medicaid benefits. In a case where your income is above the threshold for Medicaid, you may be given a Medicaid deductible before benefits will accrue. An elder law attorney can help you understand how the system works and devise a plan that’s right for you.
How to Protect Your Assets
There are several tools our estate planning attorneys may use to reduce your income and assets in a way that preserves your legacy while allowing you to qualify for Medicaid benefits. Planning for Medicaid may involve:
- Trusts. Some trusts count as assets under Medicaid, but irrevocable trusts do not. Irrevocable trusts are a type of trust that are hard to change or modify. When you put your assets into an irrevocable trust, you no longer have control over them. However, the trust can be structured for your benefit and the benefit of those you love. This will allow you to benefit from your assets while protecting them.
- Gifts. Gifts are a powerful tool for passing on assets to those you care about. Gifts may be tax-free up to specific amounts. If you’re planning on leaving assets and property to loved ones, it may make sense to leave these gifts early. It can help you and your loved ones to gift these assets in advance of needing Medicaid.
- Real estate transfers. A person’s home is often the most valuable possession. Although the home isn’t counted as an asset for Medicaid qualification purposes, it may still be subject to recoupment if there is no surviving spouse or other qualifying family members. There are rules and penalties for transferring a home or other real estate, so it’s best to plan ahead.
After a benefits holder passes away, Medicaid will attempt to recoup the cost of the benefits the program paid. This recoupment is subject to restrictions when a benefits holder has a spouse or a disabled child. These rules can be complicated and can drain your estate of the funds that you want to pass on. Planning ahead is the best way to protect your assets while receiving the long-term care benefits of Medicaid.
Understanding the Difference Between Medicaid and Medicare
Medicaid and Medicare are two very different programs for providing health care to Americans in need.
Medicaid is aimed at supporting low-income people and has strict income and asset requirements. It covers people at every age and provides short- and long-term care. Medicaid is administered by state agencies that receive federal funds and assistance. It’s an important part of health care, but due to income and asset restrictions, you must plan to use it effectively.
Medicare is a federal health insurance program mostly used by people 65 years and older. It also covers some younger patients if they are disabled or have other conditions. It does not have any income or asset restrictions to qualify. Medicare will cover most of the cost of health care but may require deductibles for certain health care costs. Unlike Medicaid, Medicare does not cover much long-term care.
Our Raleigh Medicaid Planning Attorneys Are Here to Help
Nursing homes and other long-term health care costs can drain your resources dry. Medicaid offers people significant long-term health care benefits, but you’ll need to plan ahead if you want to use them.
At the Brady Cobin Law Group, we have more than 35 years of experience helping individuals qualify for Medicaid while protecting their assets. If you have questions about how Medicaid could play a role in your estate plan, contact us today.
Dan Brady & staff are professional at all times. Would recommend Brady/Cobin to anyone looking for Estate Planning services!