Planning
At some point in their lives, almost everyone realizes they need to start planning for a financially stable future. Though many people want to plan ahead for the costs of living, medical expenses, and other eventualities, very few do so effectively. In fact, more than 66 percent of people who are currently trying to plan in advance feel that they’re not truly prepared. Many who feel confident in their efforts ultimately find that they overlooked a few critical factors.
Planning Ahead for Your Financial Future
Planning for the future entails numerous considerations. It’s important to have enough financial resources on hand to draw from after retirement. Many people make investments and tangible assets like real estate part of their plans not only for themselves but to pass along to their children and grandchildren. Medicaid can play an essential role in future financial stability and planning for the constantly rising costs of healthcare as well.
Unfortunately, though, the other measures you take to ensure financial stability can hamper your eligibility for Medicaid. That, in turn, could force you to either sacrifice your assets or draw from them to cover your future medical expenses. Keep the following options in mind to protect your assets and improve your likelihood of being approved for Medicaid Planning.
Irrevocable Trusts
One of the most effective ways to safeguard your assets without interfering with your Medicaid eligibility is to place those assets in an irrevocable trust. If assets are held in an irrevocable trust, they’re untouchable. They’re no longer part of your estate, so you can’t sell them to cover the costs of medical care. Medicaid only considers those you can liquidate when determining your eligibility. That protects your qualification for Medicaid as well as the assets you’d like to hold onto and leave for your heirs.
Medicaid-Compliant Annuities
Another option is to transfer assets into a Medicaid-compliant annuity. That involves placing money into an account to be returned to you in payments over time. It doesn’t detract from your assets, and it’ll give you a steady stream of money coming in. Still, those annuities are exempt from Medicaid’s limits, so they’re not factored into your assets when determining eligibility. Not all annuities fall in line with Medicaid’s requirements, though, so it’s important to structure yours according to the program’s prerequisites.
Gifting Assets
You can also gift assets before applying for Medicaid. You’ll need to plan ahead and do this well in advance of needing Medicaid, though. The program has a five-year look-back period. That means it can evaluate your finances and any changes you’ve made to your assets over five years before your application is submitted. If it finds that you’ve gifted assets during that period, you could still be deemed ineligible, so your efforts will have been in vain. If carried out properly, though, gifting assets can ensure your heirs receive what you intended for them to without affecting your eligibility.
Securing Your Assets and Finances
While planning ahead is the key to securing your financial future, the measures you take ahead of time can actually have the opposite impact of what you hope. As far as Medicaid is concerned, if you have assets that can be sold to cover medical expenses, you don’t need help from the program. That, in turn, can drain your resources and leave you with little to pass along to your loved ones. To avoid that type of problem, as well as potential legal complications, consider working with a professional Medicaid planner.
