Planning for long-term care can raise a tough question: How can you prepare for Medicaid without putting your home, savings or family legacy at risk? For Colleyville seniors, early planning may help you protect your assets while preparing for future care.
How do assets affect Medicaid eligibility?
Medicaid looks at your money and property when you apply for certain long-term care benefits. Some assets may count toward eligibility, while others may receive different treatment.
Several planning tools may help:
- Medicaid Asset Protection Trust: An irrevocable trust may protect some assets, but putting assets into the trust can start Medicaid’s 60-month look-back period under federal law and Texas rules.
- Qualified Income Trust: A Miller Trust may help manage income that is above Medicaid limits.
- Spousal resource allowance: A spouse who does not apply for Medicaid may keep part of the couple’s countable assets, subject to federal and Texas limits.
Timing can affect how these options work. Federal and Texas rules look at certain transfers made during the 60-month look-back period. If a transfer for less than fair market value causes a penalty period, that period generally starts when you otherwise qualify for benefits and receive care in a facility.
How can you plan a Medicaid spend down?
A Medicaid spend down does not necessarily mean giving away your property. You may be able to use some resources for allowed expenses that benefit you or your household.
For example, home repairs, medical care or certain purchases may help reduce assets that count toward Medicaid limits. Federal law and Texas rules may also protect certain transfers made to or for the sole benefit of a spouse.
Each transaction can affect your Medicaid application in a different way. As a result, the timing and records for transfers and expenses can be important.
Could Medicaid recover costs from your estate?
Texas has a Medicaid Estate Recovery Program (MERP). The state may seek repayment for certain long-term care services provided to people age 55 or older after their death.
MERP generally applies to assets that pass through probate. Some property transferred outside probate, such as real estate transferred through an Enhanced Life Estate Deed, also called a Lady Bird Deed, may receive different treatment under Texas rules. Certain hardship exceptions and other exemptions may also apply based on your family situation.
Start planning before care becomes urgent
Medicaid planning may give you more options when you start before long-term care becomes urgent. Reviewing your trusts, income, property transfers and estate plans early may help you avoid choices that could affect future Medicaid eligibility.