Like several people out there, you may feel that you don’t need to plan for long-term care simply because you are basking in good health. You see, the issue with such mentality is that, your health status can change rapidly like the weather, especially 30 years from now. No one can correctly predict his or her health status in the future, thus, it is important that you put necessary plans in place so that when those ugly situations arises, you will be well prepared.
In fact, based on stats, at least two-thirds of people over the age of 65 will need some type of long-term care at some point in their life. Ultimately, if you are enjoying good health now, you still need to consider Medicaid planning.
Why do you need to plan for Long-Term Care?
Many people believe that long-term health care is only for those who are prone to illness. They don’t realize that no one plans to be ill. It is a condition that can happen to anyone. For instance, you could suffer a terrible injury as a result of a car accident which could mean you will require long-term care of some kind. Some individuals require long-term care because they need help with their day to day activities like dressing, grooming, etc.
Health Insurance isn’t always the way
It is quite unfortunate, but there are some individuals out there who miscalculate the actual cost of long-term health care, which is typically very costly. The average yearly cost of long-term health care is almost $100,000. Imagine that almost half of people 65 and older require long-term care for a minimum of 5 years. Several people believe in the misconception that Medicare and private health insurance are enough to cater to the expenses of long-term care. Actually, these financial resources done cover those costs.
What is a Medicaid Trust?
A Medicaid trust is a type of irrevocable trust created by an individual during his or her lifetime. This type of trust is used to hold the title to an individual’s home, including other properties or assets. This type of trust can also persevere your right to reside in your home, including the right to select a trustee as you deem fit. Since this type of trust offer management and legal protection of the assets you put in them, they provide an ideal option for individuals who are worried about safeguarding their estates from the influence of nursing home care cost.
However, these are essential factors that you need to consider if it is the appropriate choice for you. Because Medicaid trust are irrevocable, it is impossible to alter it. This is not often an issue since all that is written in the trust are for your benefit and not that of a beneficiary as it is with other types of irrevocable trust. You also have the authority to utilize all the income gathered by the trust’s assets. In addition, by halting your access to the principal in the trust, you automatically lose ownership of those assets when determining your Medicaid qualification.
How can Medicaid Planning Help you be Ready?
Medicaid benefits are designed to assist low-income individuals settle medical services. Since Medicaid is a needs-based benefit scheme, to be eligible it is important that you have not more than $2,000 in assets. Even if some assets, such as your home, are not added, it is still very easy to use up your savings before Medicaid will start covering your long-term care expenses. But, the aim of Medicaid planning is to ensure that you don’t use up all your resources, while still being eligible for benefits,
How can Medicaid Help You?
A Medicaid trust come with several benefit. Aside from helping you secure your assets, this irrevocable trust can be created to allow you to alter beneficiaries and channel the distribution of trust properties to your beneficiaries after your demise. Also, this trust can allow you to share the properties in your trust even while alive. Since the divestment happened when the property was sent into the Medicaid trust, distributions that occurred at the lookback period can be made to your beneficiaries without attracting sanctions.