Understandably, it can be difficult to think too far in the future. However, when it comes to planning for the future, specifically your elder years, it is important to consider many scenarios. With much of the aging population spending their final years in a nursing home facility, it is impossible to not consider these costs. This end of life care can be necessary to plan for; however, it is exceedingly expensive. Thus, it is vital for older individuals in Georgia to consider a plan for long-term care and how Medicaid planning may be a beneficial step to take.
Qualifying for government benefits, such as Medicaid, can be confusing. This is especially true for those that wouldn’t currently be eligible for these benefits but would like to plan and prepare for possible eligibility in the future. In the state of Georgia, requirements for Medicaid is set at having no more than $2,000 in nonexempt assets. Additionally, the government is able to look back at a period of five years, paying close attention to any financial transactions made during the time period prior to filing for Medicaid.
This is where Medicaid planning comes in. By shifting wealth into trusts, individuals or couples could qualify for Medicaid when it comes to covering the expenses associated with elder care. Considering that the median cost across the nation for a private room in a nursing home is $97,455, that is simply not a bill that you or your partner could realistically pay out of pocket.
Because you have worked hard for the assets that you currently have, the last thing you want to see is everything being completely wiped out when you need to be cared for in a nursing home. By integrating Medicaid into you long-term financial planning, you could avoid this potential.
While there are many factors to keep into consideration, there are two that are major focus points. The first is timing. Recall that Medicaid can look as far back as five years. In order to pass the means test for eligibility, an individual must transfer their wealth at least 5 years prior to applying for the program It should be further noted that transfers made during this five year period may be subject to penalties in addition to making them ineligible for Medicaid services.
The second factor is the transfers themselves. How assets are transferred could present risks, making it important to consider the pros and cons with each type of transfer. In these matters, an irrevocable trust may be the best answer. The assets are considered no longer controlled by you, and they are subject to protection from creditors.
Medicaid planning, much like long-term planning in general, can be complex and multi-faceted. Thus, it is important to understand the process and how you and your loved ones could benefit from it.