Estate Planning For Peace Of Mind

Medicaid trusts for long-term care planning

On Behalf of | Aug 23, 2021 | Elder Law |

Many Texas seniors may expect to need long-term care in the future. Nursing homes can be very expensive, ranging in price from $75,000 to $150,000 or more per year. Unlike other forms of primary medical care for seniors, Medicare does not provide coverage for long-term nursing care. While some people may have long-term care insurance to cover their needs, many others may need to turn to Medicaid for support. However, Medicaid has strict eligibility requirements that may be difficult to meet, and many people may have too many assets to qualify for Medicaid but far too little to pay for long-term care.

Why consider Medicaid planning?

Medicaid planning can be an important option for many seniors that want to protect their future eligibility for public long-term care coverage. Because there is a look-back period when assessing a Medicaid application, planning should be completed five years or more in advance of an application for coverage. A Medicaid trust can be one important future-planning option to preserve savings or set aside funds for loved ones. A Medicaid qualifying trust, Medicaid protection trust or a home protection trust may provide options for seniors to obtain the coverage they need without losing everything they have.

Eligibility requirements for Medicaid

Medicaid eligibility is based on both income and asset requirements. Typically, single applicants must have no more than $2,000 in countable assets, and the income limit may range to a point around $2,000 monthly. If people do not have a plan for Medicaid eligibility, they may need to spend down any excess assets or use any income over the limits to pay for medical expenses.

A Medicaid trust is a type of irrevocable trust, which places the assets in the hands of another party, with the creator giving up their ability to change the trust. Medicaid planning can be part of an overall estate plan, allowing seniors to access needed care while protecting their assets.