Many of the baby boomers living here in New York may start to wonder about whether they will need long-term care at some point in the future. If you are one of them, then you may also wonder how to best prepare for the cost of that care.
You may know people who make just enough to get by but too much to qualify for Medicaid. You don't want to find yourself in this position should you reach a time when you need assisted living or nursing home care. Estate planning may help ensure that you have the ability to receive Medicaid and to supplement those benefits as well.
Protecting your assets
The sooner you begin estate planning, the higher the chances are that you will preserve your assets for your heirs and beneficiaries and still qualify for Medicaid should you need it at some point in the future. You may use any number of estate planning strategies to accomplish your goals when it comes to making sure that your heirs receive an inheritance.
However, when you combine that goal with the goal of making sure you could receive Medicaid, you need to move forward carefully. You may use trusts in order to accomplish your goals.
Should you use a revocable or irrevocable trust?
You can change a revocable trust or even terminate it during your life, and Medicaid considers the assets in these trusts to still be your property for qualification purposes. Irrevocable trusts cannot be changed, and you relinquish control over the assets in them. This makes them the best choice for Medicaid planning.
However, you must transfer assets into it within a certain amount of time prior to applying for benefits. Otherwise, they remain in your estate for qualification purposes. This time frame ranges between three and five years. If you have everything in place before that time, the trustee, which cannot be you, can administer the trust and make sure that any distributions to you do not make you ineligible for Medicaid.
Making the right choices for your situation
You have numerous options when it comes to estate planning and Medicaid planning. In order to make the right choices for your situation, you may need to consult with someone who understands long-term care planning. Deciding to plan for your family may be the easy part of your estate-planning journey. Determining the best way to protect yourself if you need care later in life often requires more intricate planning.