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Medicaid planning a must in order to protect one's assets

Long-term care planning is something that many people in Texas and elsewhere fail to complete. At the end of the day, this only hurts them and their loved ones in the long run. Why? Long-term care is ridiculously expensive, and many people will require Medicaid in order to pay for it. However, without proper Medicaid planning, one may not qualify, and one's assets may be put in jeopardy.

The U.S. Department of Health and Human Services says that a 65-year-old person has nearly a 70 percent chance of needing the services of a long-term care provider. Approximately 35 percent of older adults will require care in a skilled nursing facility. The cost of such care is difficult for most people to afford, and a large part of the population does not have insurance that covers long-term care.

So, without insurance, how does one pay for long-term care? The answer for most is Medicaid, but this is not available to everyone. Medicaid puts restrictions on who qualifies. It is meant for those with low incomes and few assets. How can one qualify then?

There are a few things that one can do in order to meet Medicaid requirements. One option is setting up something called an asset protection trust. In doing so, one's assets are transferred to the trust and are no longer considered personal assets that can be used against one when applying for Medicaid. Another option is a spousal transfer and spousal refusal. This means that one may transfer any assets to one's spouse and that the spouse may then refuse to provide financial support for long-term care.

Medicaid planning years in advance is wise, as transferring assets to a trust or anyone other than a spouse is subject to something called the Medicaid five-year look-back. If assets are transferred five or less years from when services are needed, Medicaid may be withheld during a set penalty period. While it is impossible to know if or when long-term care services will be required, preparing now is in one's best interests in order to help avoid this look-back penalty. An experienced attorney can help Texas residents with Medicaid planning so that everything is ready for if it is needed.

Source: agingcare.com, "Top 5 Strategies to Protect Your Money from Medicaid", David A. Cutner, Accessed on May 24, 2017

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