As we age, the chances of requiring a home health aid, assisted living, or nursing home care increase for all of us. Referred to as long term care, this type of health care can be extremely expensive, and it is not covered by Medicare or other health insurance. As a result, this type of care can deplete your life savings, leaving your spouse impoverished and eating up any money you planned to leave to your family.
The only government program that covers long term care expenses is Medicaid. Unfortunately, Medicaid is only available to individuals who have minimal assets. To qualify for Medicaid in New York, a single applicant can have no more than $15,900 in assets and married applicants can have no more than $23,400 in assets. This includes everything you own – including your home. Since there aren’t too many houses or apartments that are worth less than $25,000, in order to receive Medicaid if you own your own home, you will have to either sell your home and use the proceeds on your care or agree to relinquish your home to the state upon your death.
While you may not need Medicaid now, planning early is the best way to preserve and protect your assets. By transferring your assets to a Medicaid trust, you can continue to benefit from the assets, while putting them beyond the reach of the government if you need to apply for Medicaid. Unfortunately, if you wait until you need Medicaid, it will likely be too late to shield your assets.
The Medicaid authorities review all of an applicant’s financial records, and an asset transfer in the within five years prior to your application will disqualify you for institutional care coverage, and a transfer within nine months prior to your application will disqualify you for home care coverage. As a result of recent legislative changes, the nine-month period for home care coverage will increase each month by one month until it reaches 30 months in July 2023. A penalty is assessed for all unexplained transfers of money including gifts to family members (other than a spouse) during the applicable look-back period.
How We Can Help
At the Village Law Firm, our Team will help you choose the right strategy for protecting your assets as you age.
Medicaid Asset Protection Trust
We may recommend creating an Irrevocable Medicaid Asset Protection Trust to protect your primary residence and certain income producing assets from Medicaid claims. Transferring your home to a Medicaid Asset Protection Trust can allow you to remain in your home and preserve it for your heirs. Transferring your assets to this type of trust can allow you to receive the income from the assets while shielding them for your family. Our Team will walk you through the intricacies of setting up the trust and help you determine if it is the right option for you and your family. Medicaid planning generally requires relinquishing a significant amount of control over year assets, so it’s important to engage a legal team that will carefully explain all the pros and cons of any strategy prior to making a decision.
With years of experience applying for Medicaid on behalf of clients and implementing strategies to protect client assets, our Team can help you make the best decision for you and your family.