Protecting Your Assets From The Cost Of Long-Term Care
Long-term care is very expensive for those who need it. In Florida, the average cost of care is between $90,000 and $100,000 every year. With figures like that, it is easy to see why so many people have to invest the savings they worked their entire life for just to pay for their care. To protect your asset, Medicaid planning is a critical step. Medicaid planning allows you to structure your assets and income before you may need to qualify for Medicaid. Medicaid planning is ethical and legal, but it is important to work with a St. Petersburg long-term care planning lawyer who can ensure you comply with the law.
Start Early
One of the most important elements of Medicaid planning is to start early. Medicaid has a five-year look-back period, which means if the applicant transfers any assets within the last five years, it may affect your eligibility for Medicaid depending on the value of the asset. If you can start the planning process early, there will be more options available, including being able to transfer property without facing those potential consequences.
Establish a Trust
Establishing a trust is one effective option for Medicaid planning. For this purpose, an Irrevocable Asset Protection Trust for Medicaid is typically used. When you transfer property into this type of trust, it is no longer part of your estate, and thus, it will not impact your Medicaid eligibility. While you do not have access to the principal assets of the trust during your lifetime, you may maintain an income interest in the trust if you want. You must name a trustee, other than yourself, to manage the trust assets. There are several benefits to such a trust, including safeguarding your hard-earned assets from the high cost of long-term care.
Gifting Property
Gifting property can reduce the total assets you own to meet the Medicaid limit. As with other planning strategies, there are rules and limitations regarding gifts. For example, if you gift property within five years of applying for Medicaid, it can affect your eligibility for Medicaid for a certain period of time. For 2024, the annual exclusion from gift tax is $18,000, meaning a person can give up to $18,000 to as many people they want without having to pay any taxes on the gifts. Therefore, gifting property up to $18,000 is another option for Medicaid planning.
Purchase Long-Term Care Insurance
Long-term care insurance covers the cost of long-term care and it can also reduce the need for Medicaid. However, coverage can be very expensive and it is not available to everyone. Insurance companies usually require a medical examination and may deny people who have pre-existing conditions. If you are approved, review the policy very carefully so you understand the deductible, coverage limits, and any limitations or exclusions.
Our Long-Term Care Planning Lawyer in St. Petersburg Can Help You Devise a Strategy
At Legacy Protection Lawyers, LLP, our St. Petersburg long-term care planning lawyer can outline the different options available to you and help you create a plan that will work for you now and in the future. Call us today at 727-471-5868 or contact us online to schedule a consultation and to get the legal help you need.
Source:
fhca.org/media_center/long_term_health_care_facts
