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The other day I got a call from Jane inquiring about Medicaid. Her question is similar to one we get all the time so it is worth blogging about and sharing this with others that I know have the same question. Here’s the question…

How can I qualify for Medicaid and not lose most, if not all, of my resources and assets?

The best answer is to start planning 5 years before you think you might need Medicaid. Not always easy to think that far ahead but it is really the best way use the most effective planning techniques to protect your resources and assets. Our main strategy is to use “special planning techniques” that are customized to the individual needs of the client to make the appropriate transfers…ideally at least five years before applying for institutional level of care benefits.

The place we would recommend anyone starts is by creating an Estate Strategy that takes into account the present and future needs of the individual, spouse, partner, or family members. Since none of us can predict the future, it’s hard to judge when Jane or her husband, Dick, might need long-term care or other Medicaid benefits. With people living longer and with people 65 years and older being the fastest growing segment of the US population, it is becoming more and more important for people to do proactive planning if they want to pass any of their wealth to their heirs.

Our definition of proactive planning in this situation is, “utilizing strategies that can protect the assets of individuals who may one day require long-term care.”

Long-term planning is the best method of proactive planning and clients who use this strategy will typically save more than twice what a client will save when crisis planning is needed…twice! This is money that can go to a loved one instead of the government or some other non-related entity. I can’t over stress the importance of longer term planning. And if you can start a year ahead, or two, or hopefully 5 you will find more and more opportunities to protect what’s yours and not give it away to those who don’t deserve it.

There are three methods we would want to talk about with you about to help you in the area of Long-term Planning…

  1. We use a specialized Medicaid Trust as the center piece for long-term proactive planning. Property placed in this trust can be 100% protected after five years. The types of assets typically placed in this trust are residences, both in state and out of state, investment funds, annuities, and life insurance policies. This is an extremely cost-effective way to protect your resources.
  2. Another strategy we incorporate into a plan is the use of Personal Care Agreements. These agreements are especially effective when a family member is caring for a senior loved one. There is no five-year look back because it is a fee for service contract. While these need to be written to be very specific and each one is very personalized, it would be very beneficial to learn more about a Personal Care Agreement and how it could potentially work for you and your situation.
  3. If either of these aren’t either applicable or relevant to you, then I definitely recommend you engage in the minimum planning tool available to you…an Asset Protecting Power of Attorney. This is definitely a tool you should have in place and it can be created as part of your longer term strategy as a starting point to help you get to where you want to end up.

If Medicaid is something that is a very real possibility in your future, let’s set up a complimentary exploratory meeting to review your situation and we can share what the particular options are for you given where you are in life and with your specific situation. Then you can make an educated decision on what to do and hopefully you are able to take advantage of some of these powerful tools and keep more of what is already yours…that would be a huge gift to you and your loved ones.

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