BY DEBRA VERNI
Many couples, in their golden years, find
themselves wondering: What if one or both of
them is admitted into a nursing home and needs
Medicaid?
After saving throughout their lives, they are
fearful that if one of them enters a nursing home,
they will have to exhaust their life savings to
pay for the cost of care before they can become
eligible for Medicaid. The average nursing home
cost is $13,000 per month, which translates to
$156,000 per year. Don’t let a nursing home take
all of your hard earned money. If you plan ahead,
this can be avoided.
Many people draft documents when they are
young and never consider reviewing or updating
them. Some couples with wills drafted in the
past, may not realize that their wills could harm
them, if they did not consider Medicaid issues
when they executed them. This can result in
devastating consequences.
Sometimes, couples attempt to make an estate
plan where they leave all of their assets to each
other upon the death of the other spouse. These
are sometimes referred to as “I Love You” wills.
This may seem appropriate and easy to do at
the time, but if the surviving spouse is on the
verge of entering a nursing home and then inherits
a large amount of money from the deceased
spouse, the surviving spouse may not be eligible
for Medicaid, or even worse if the surviving
spouse is already on Medicaid, it may disqualify
them from receiving their benefits. Such an estate
plan could result in an unintentionally difficult
situation for the surviving spouse.
You can protect your assets by using a trust.
There are trusts that can be used to help applicants
qualify for Medicaid or to prevent estate
recovery of certain assets. Trusts can also prove
useful in preventing individuals who are already
receiving public benefits from losing them.
An applicant who exceeds the income limit
may still qualify for benefits, provided all income
in excess of the income limit is placed into a
certain type of trust (sometimes called a “pooled”
trust) each month.
The law related to Medicaid eligibility is
complex and there may be other estate planning
techniques you can use. These are only some of
the issues. Speak with an attorney about the
potential steps you must take and the documents
you must execute to protect your assets when
contemplating future Medicaid coverage.
Verni is a principal of the Herzog Law Firm in
Saratoga Springs