We often see clients in our office who have made poor financial decisions because of inaccurate information. The following debunks some of the biggest myths surrounding Long Term Care Medicaid.
One of the biggest myths is that you must be poor to qualify for Medicaid. Most people do not realize that Medicaid consists of several programs– Medicaid at home is the biggest program (83%) and nursing facility Medicaid (Long Term Care Medicaid) is the most important to seniors. To qualify for Medicaid at home, you must have limited income and assets. The at-home program generally is not sufficient to help families with long term care needs. Long Term Care Medicaid, however, is specifically designed to provide governmental assistance for middle class seniors who require nursing facility based care. Long Term Care Medicaid allows you to receive significant financial assistance with the cost of care while keeping your assets. It takes professional help to keep most of your assets with Medicaid and to avoid any payback (estate recovery by the state) at your death.
The second and third biggest myths relate to gifting: give away everything before you require long term care OR do not give away your assets until you require long term care. Conflicting advice, so what do you do? The truth is that each situation is different. There is a look back period of 5 years when applying for Long Term care Medicaid. If gifting has taken place during the look back, the applicant will be penalized one month of care for every $6,810 gifted; meaning Medicaid will not cover the cost of care for one month per $6,810 given away. If you are confident you will not require nursing care within the next 5 years, you can potentially gift now to your children or to an irrevocable trust and wait out the look back period. But gifting must be done cautiously because it can cause bad results due to income taxes and other issues not related to Medicaid. But what do you do if you need nursing care now and you don’t have 5 years to plan. The good news is that most families can make strategic transfers and gifts that don’t result in a sanction or penalty. However, this strategic gifting requires the advice of an experienced elder law attorney familiar with the rules of gifting as it relates to long term care Medicaid.
Losing the homeplace – to pay for care or to Estate Recovery – is the fourth biggest myth we hear about. First, you are not required to sell the homeplace and use the money to pay for care. Your home is an exempt asset for Medicaid eligibility; but the home is at risk to lose at your death. Estate Recovery is a major concern for many clients. Estate Recovery is when the state of North Carolina makes a claim against your estate after your passing to recover the costs spent on your Long-Term Care. Again, the good news is that with good professional help, the homeplace, as well as any other real estate (that is titled correctly) can be excluded from probate and protected for heirs.
Call W.G. Alexander & Associates to learn more about Medicaid and other programs that may help pay for long term care. If you are in crisis, you should seek assistance from us immediately or attend our free seminars on Medicaid through our website at www.wgalaw.com or call us at (919) 256-7000.