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SENIOR LIFE ODYSSEY: You don’t have to be poor to get long-term care benefits
Have you heard stories about people who “lost everything” when they needed long-term care? Or do you know someone who is exhausted from caring for a loved one because they can’t afford a nursing home?
These stories make me especially sad because it doesn’t have to be that way!
You’re probably familiar with government benefits like Social Security and Medicare – programs designed to help older Americans. You may also have heard of Medicaid – a program designed to provide medical benefits to the elderly and folks with limited income and/or assets.
Unfortunately, many people believe Medicaid is only available to poor people. But if you or a loved one is over 65 or disabled, you can probably qualify for Medicaid even if you have significant assets and a decent income.
You don’t have to hide your assets. In fact, you shouldn’t hide your assets. The law provides perfectly legal ways to qualify for Medicaid if you know the rules. If you qualify, Medicaid helps pay for at-home care, assisted living, or nursing home care – whatever meets your needs. You don’t have to be poor, and you don’t have to sell everything you own to get benefits.
The best way to qualify is to plan ahead. With proper planning, you can protect nearly everything you own against long-term care costs. That planning should be done at least five years before long-term care is needed. Who knows when you’ll need care, though? So it’s best to talk with a Medicaid professional or elder law attorney sooner, rather than later.
Even if you haven’t planned ahead, there are ways to protect most, if not all, of your assets if you or your spouse need care. The key is to “spend down” your assets to the level Medicaid requires.
Spending down your assets doesn’t mean giving them away or losing them, however.
If one spouse needs nursing home care, but the other spouse is at home:
• Their house is not a “countable” asset, so it doesn’t count against the resource limit, and it doesn’t have to be sold.
• If the spouse at home has a retirement account like an IRA or 401k, that doesn’t count either, and it doesn’t have to be spent down.
• Excess funds can be used to buy a special type of annuity that pays nearly all of those funds back to the at-home spouse in just a few months. The annuity doesn’t count against the asset limit, and it can help protect nearly everything the married couple owns.
No matter whether the Medicaid applicant is single or married, or whether one spouse or both need benefits, you also can “spend down” assets by buying these non-countable items:
• Income producing real estate, like farmland or rental property.
• Any item the applicant or his/her spouse needs, like a new television set, a lift chair or repairs to their home.
• Certain funeral and burial-related items.
If these spend-down options are not enough, funds can be invested in an asset protection trust, which doesn’t count against your asset limit. It does mean some of your funds will have to go toward your care, but most of what you worked hard for can go to your heirs when you’re gone.
I’ve shared this information, not as a “do it yourself” checklist, but to give readers an idea what is possible. To the average person, applying for Medicaid and protecting your assets is nearly impossible without help. Taking any of the steps I’ve outlined and doing it in the wrong way, or even filling out the application for Medicaid incorrectly, can cause you to lose benefits and cost you money.
Here’s the key point: You don’t have to be poor to qualify for long-term care benefits.
The rules are complicated, but Medicaid is available to nearly everyone over age 65 or disabled, so long as you have a need for care and a professional to help you meet the financial requirements. The care you receive with Medicaid is no different than the care you receive when you pay out of your own pocket.
This overview is provided as a public service, not as legal, financial or tax advice to any specific individual. Be sure to speak to a qualified attorney, financial adviser or tax specialist who can answer your questions, analyze your goals, and give personalized advice.
Michael and Adam Goss of Goss Law are Greencastle attorneys who focuses on estate planning and elder law.