As a person ages, their medical care needs might increase. This comes at a time when their income might be decreasing. By the time they are retired, they might need considerable care, but they might not have the money to cover that care.
There are two programs that senior citizens might be able to use to help cover the medical costs they will face. Medicare is one that workers are entitled to that they have paid for through payroll withholding. Medicaid is a needs-based program that has specific income and asset requirements.
Long-term care needs are often a huge expense for senior citizens. Medicaid might be able to kick in some money to help cover that care, but it will only go into effect when you are able to meet the requirements for the program.
If you think that you will have to count on Medicaid to cover that long-term care expense when you get older, you need to start thinking about Medicaid planning now. One reason for this is that there is a five-year, look-back period that comes with this program.
This means that anything you gave away through a transfer of assets or a gift during the 60 months prior to the application will be looked at. These can trigger penalties that can put a serious damper on the assistance you receive.
Because of that look-back period, you should start Medicaid planning now. It is never too early to do this, but it can easily become too late if you don’t do this. This also gives you a chance to consider the gift taxes and how your estate taxes might be impacted by the choices you make now.
Written by Ronald A. Fatoullah, Esq, principal of Ronald Fatoullah & Associates, a New York law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Attorney Fatoullah is a Member of the National ElderCare Matters Alliance, and he and his firm are Featured Members of ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for families.