Many residents of the Dallas-Fort Worth area may find themselves in a bind as they get older and face the reality that they will require long-term care in a nursing home or other assisted living facility.
On the one hand, the government’s Medicaid program will pay for this care but requires a person first to have almost no assets in his name and little to no income.
On the other hand, the person may have worked hard to build up a legacy that they want to pass on to their loved ones. She would hate to see that property instead go to nursing home bills or reimbursement of the Medicaid program.
A Texan may be able both to get the long-term care he needs through Medicaid and pass along some of his hard-earned money to his family. However, doing so may require some careful planning.
Quickly disposing of one’s assets is not a wise option
To qualify for Medicaid, a person might be tempted to give away all of their assets in order to meet Medicaid’s eligibility requirements.
While some planned gifting years in advance may be a valid option, it is not wise to distribute one’s property quickly to one’s children or others once they have a long-term care need.
Medicaid imposes what people often refer to as a look-back period of 60 months on most gifts or other distributions of property. Distributions to a person’s spouse are an important exception.
Basically, if a person gives away property within the look-back period, they will be subject to a penalty period during which, even if they are otherwise eligible, Medicaid will not pay for long-term care.
The patient will have to find other means to finance their medical and personal care needs during the time of the penalty.
There are many valid strategies, many involving the use of trusts, which Texans can use to do Medicaid planning, even in the short term, which will not leave them scrambling to finance their care.
It is important to understand these legal options and execute them properly.