Medicaid, Estate Planning and You!
By: Anthony Cooper
Medicaid is a federally funded, state-administered, healthcare program for low-income individuals and families. Since the program is intended to assist low-income individuals, they must meet certain eligibility requirement. One disadvantage to late estate planning is protecting your assets while navigating Medicaid eligibility. For example, single individuals in North Dakota are allowed to keep only $3,000 in assets when they apply for Medicaid, along with a reasonable burial policy. Married couples with one spouse staying at home while the other is in a long-term care facility are allowed to keep one vehicle, the marital home, and a reasonable burial policy. The spouse in the nursing home can only keep $3,000, and the community spouse (the spouse that will stay at home) gets to keep half of the couple’s countable assets but not to exceed certain North Dakota asset limits. If the Medicaid applicant’s assets are over $3,000, it must be spent down.
Planning and applying for Medicaid can be overly complex. It is important to note, gifting of any amount for a period of five years prior to applying to Medicaid may be classified as a disqualifying transfer. This is what we call the five-year look-back policy. This means that Medicaid case workers will examine an individual’s financial records 60 months prior to the date of application. They will also inquire about any transfer of property that took place within the five-year look back period. A transfer for less than fair market value during this period may be disqualifying.
Moreover, many individuals fail to consider what happens to their assets if they need to enter a long-term care facility. Your assets can simply be your home that you hope to convey to a family member or friend after your passing. Long-term care later in life might be hard to consider, especially when an individual is in good health. If you already have an estate plan in place, and you have considered what happens to your assets if you enter a long-term care facility, you are already ahead of the game when it comes to Medicaid planning. If you have not, your lifelong savings and retirement may be at risk if you suddenly need to enter a long-term care facility. Nursing home care is expensive. According to the North Department of Human Services, the average nursing facility rate is $352.42 per day as of January 1, 2022, this is over $100,000.00 per year.
Is it too late to begin planning? Will I lose all my assets if I suddenly need to enter a nursing home? Of course, it is best to plan for any unforeseeable event that may occur in your future, but the answer depends on your unique situation. That is where we come in. At Boppre Law Firm we have knowledgeable, experienced counsel, who will guide you every step of the way. Check us out online or call us today.