If you’re a Georgia resident who hasn’t yet planned for the possibility of future long-term care needs, it’s important to start. The fact is that most of us can expect to require some level of long-term care in the future, and relatively few of us will be able to pay for it on our own. Nursing home costs have risen dramatically in recent decades, and can now cost between $7000 and $10,000 a month in many areas of the country. Without adequate planning, you’ll likely struggle to pay for any prolonged stay in a nursing care facility. With that in mind, it’s important to have the Georgia Medicaid planning you need to ensure that your care can be paid for when it’s needed.
Why Medicaid?
Nursing home costs are something that few people can adequately prepare for even if they want to shoulder those costs on their own. Most Americans have less than $10,000 in retirement savings – or about the equivalent of a little more than a month’s worth of care in a long-term care facility. Far too many seniors reach the point where they need nursing home care without the savings needed to cover those costs. That leaves them with few options.
For those who haven’t planned for those financial costs, the choices can be difficult. Many find themselves with just enough in assets to disqualify for them benefits, but nowhere near enough wealth to pay for their care. When that happens, their options are limited:
- Many are forced to spend down assets to reduce their wealth and meet the program’s strict $2,000 asset limit. That can force those seniors to essentially impoverish themselves to qualify for Medicaid benefits. And while some assets are exempt from being counted for asset eligibility purposes, most are not.
- Other seniors end up relying on friends and family to help them meet the cost of care. The problem with that is that most families are already struggling to make ends meet, leaving little available for those kinds of needs.
- Some seniors may even act quickly to give away wealth, thinking that they can protect their assets by transferring ownership to loved ones. Thanks to Medicaid’s five-year look-back riles, however, those efforts can result in harsh ineligibility penalties.
And while some of today’s workers might think that they’re safe from nursing home costs, expecting Medicare to cover those expenses, nothing could be further from the truth. Yes, Medicare will on occasion help with some costs, but that assistance is limited to a mere 100 days of coverage and only in certain situations. To deal with long-term care costs, Americans need to rely on the program that helps low-income adults and children get the health insurance coverage they need: Medicaid.
In fact, Medicaid today serves as the largest single provider of nursing home payments in America, helping millions of the nation’s seniors to meet those excessive care costs. Without Medicaid’s long-term care assistance, many American seniors would have no way to pay for that important care. However, it is more important than ever before that Americans properly plan to ensure that they will eventually qualify for the care they need.
Your Planning Options
Medicaid planning is something that is best started earlier in life, since you don’t want to run into problems with that five-year look-back provision later. That provision enables Medicaid to go back through your asset transfers in the five-year period directly preceding your Medicaid application. That could result in any transferred assets being counted as part of your estate, and creating a penalty that could leave you ineligible for benefits for a period ranging from months to years. If that happens, you could be left without benefits and without the assets you need to pay for care on your own.
Proper Medicaid planning can eliminate such penalties and ensure that you qualify for benefits without using emergency measures like spend-down techniques. There are several different options that you can choose, and they are all intended to reduce the size of your countable estate to get it below that $2,000 asset limit. They include:
- One of the best ways to reduce your estate is to use liberal gifting techniques to transfer wealth to loved ones. This is especially beneficial when you’ve already planned to leave your family an inheritance, and involves transferring that inheritance to them while you’re still alive, over the course of several years.
- Using annuities. You can also use wealth to buy annuities that pay you regular income over a set period. This option is often used by those who have waited too long to use gifting or other techniques, but it can still enable you to salvage a portion of your wealth from nursing home costs.
- You can use irrevocable trusts to remove wealth from your estate permanently. When those assets are placed in an irrevocable trust, they are beyond your reach and protected from creditors, nursing home costs, and even the estate tax. You can even use trusts that provide a means for income-earning assets to continue to pay you income every month – ensuring that you receive some benefit from your wealth while you’re still alive. Then, when you pass away, those assets can be used for the benefit of your heirs.
As you might expect, this type of planning can be complex and risky for those who are unfamiliar with estate and Medicaid planning. To ensure that you don’t encounter problems, you should always work with an experienced attorney while creating and implementing this type of strategy.
The good news is that a solid legal team can help you to create the Medicaid planning strategy you need to protect your long-term care needs. The attorneys at the Fouts Law Group, LLC have the experience and expertise you need to secure your plan and ensure that you have the protections you need to safeguard your interests and qualify for those important benefits. To find out how Georgia Medicaid planning can help you to be better prepared for your long-term care needs, contact us online or give us a call at (404) 596-7520 today.
