If you believe you may need Medicaid, it is best to plan ahead.
Planning for Medicaid needs to be done carefully as the Wills, Trusts & Estates Prof Blog discusses in “Planning Ahead For Medicaid Approval.”
The government will help pay for long-term care in a nursing home through Medicaid, but Medicaid is only meant to pay for the poor. It is for people with no resources to pay on their own. Therefore, going on Medicaid is not a good way to preserve assets from nursing home expenses.
One way around this, is to intentionally not have any assets. Everything can be given away to heirs before going into a nursing home and requesting Medicaid, right? Wrong, it isn’t that simple.
The first thing to be aware of, is that the government has clawback provisions that prevent people from giving away assets for the purpose of receiving Medicaid.
Any transfers made within five years prior to requesting Medicaid, will be scrutinized. If the transfers were for less than fair market value, then Medicaid eligibility can be denied.
It is possible to use irrevocable trusts to get around Medicaid eligibility problems.
Needless to say, those trusts need to be created very carefully and they also need to be created ahead of time.
If you are thinking of a trust, it would probably be best to work with an estate planning attorney who can advise you on your unique circumstances.