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Tackling estate plans with Medicaid planning in mind: Part 1

On Behalf of | Jun 26, 2019 | Medicaid/MassHealth Planning |

When it comes to estate planning in Massachusetts, many people do not craft their arrangements with Medicaid in mind. This is often due to overlooking potential long-term care needs, not knowing the eligibility rules or little to no knowledge about the benefits that the government program offers to help seniors manage their long-term care costs. Whether you are in the process of finalizing your end-of-life documents or have yet to start them, you should not overlook the importance of including estate plan provisions that allow you to take advantage of Medicaid long-term care benefits should you need them. 

Your assets and need to preserve the family dynamic may compel you to focus more on the kind of instructions you want to leave behind for your family and loved ones after you die. Part of successful estate planning is for you to consider all possible contingencies. Death is not the only reason why you should seek to protect your estate. Unexpected medical expenses and long-term care costs can diminish it and rob your beneficiaries of their inheritance. Here is why you should consider incorporating Medicaid planning into your estate plans

Incompetence may occur before death 

These days, seniors live longer, but that does not mean they do so without health challenges. As you get older and experience life, you may encounter circumstances that render you closely, if not completely, incompetent. Until that time arises, you remain in control of your finances and important affairs. But once you become legally unable to manage them physically or mentally, you will likely rely on your family. 

Consideration of end-of-life care costs protects the estate 

Without sound financial planning and resources, you and your family may not have the means to handle the financial challenges of paying for any medical and long-term care expenses you may incur before your death. To ensure you receive the standard of care you may require from the appropriate medical professionals and communities, you could sell off assets and hope the cost of healthcare does not continue to exponentially increase. Or, you could act now to ensure your eligibility for Medicaid. 

One of the most common reasons seniors cannot take advantage of Medicaid benefits is that they run afoul of the rules regarding the transfer of assets. One way the government determines eligibility is by evaluating how applicants dispose or transfer their assets during the five-year period preceding the application date. Applicants can transfer and gift their assets at will. However, any transfers that occur during that five-year window must meet certain criteria or qualify as an exemption to prevent benefit disqualification.