Medicaid is a federally funded (primarily) but state administered healthcare program for low income individuals and families as well as the aged and disabled. Like many people you may go through your entire working years without ever needing Medicaid benefits, only to find that as a senior they are crucial to your ability to cover the high cost of long-term care. You have heard the horror stories though about people losing their assets when they suddenly need to qualify for Medicaid. Understandably, your biggest concern is whether your home is at risk if you apply for Medicaid.
Your concerns are not unfounded. Each individual state determines its own eligibility requirements for Medicaid benefits; however, all states have an income and resources limit that cannot be exceeded. In most cases, the resources cap is very low, often as low as $2000. While this should give you pause, keep in mind that the limit applies to countable resources. Many assets are excluded from the resources calculation, such as:
- • The value of your homestead up to a certain amount unless there is a spouse, minor child, or disabled child lawfully residing in the home;
- • The value of one automobile;
- • The value of life estate interest in real property;
- • The value of household goods and personal effects;
- • The value of undivided interest in heirs property; and
- • Up to $1,500; and set aside for the individual’s burial. (An additional $1,500 for a spouse, if living)
- • The cash value of life insurance policies owned by the individual when the total face value of all policies is $10,000 or less.
The best way to ensure that your home is protected in the event you need to qualify for Medicaid one day is to include Medicaid planning in your comprehensive estate plan. While the equity you have in your home may not be considered a countable resource, many of your other assets likely will be. For this reason, it is imperative that you plan ahead to protect those assets because trying to protect them at the last minute will not work. Medicaid uses a five year “look-back” period when evaluating an application. Essentially, this means that any assets transfers during the five years prior to your application date may be discounted and the value of the assets transferred will be imputed back into your estate.
If you have additional questions or concerns about Medicaid planning or estate planning in general, contact the experienced New York estate planning attorneys at The Law Offices of Saul Kobrick, P.C. by calling 800-295-1917 to schedule your appointment.