Olympia Estate Planning

What is Medicaid Planning?

Medicaid planning is an aspect of estate planning that a lot of people do not know much about. Even if you know that Medicaid has something provides health care insurance to the poor, those with disabilities, or the elderly, you may not know how this process works, or why it has anything to do with estate planning. To help better explain what Medicaid planning is and why it might become a part of your estate plan, today we are going to take a look at some essential questions surrounding the Medicaid planning process.

What is Medicaid?

Medicaid is a health insurance program jointly operated by the federal government and the 50 state governments that is designed to provide insurance coverage for people with disabilities, low-income children, and seniors. As a part of this coverage, Medicaid pays for the expenses associated with long-term care costs for people with disabilities or anyone who need to reside in an eldercare facility such as a nursing home or assisted living center.

What is Medicaid planning?

Medicaid planning is the process in which people create a plan that will allow them to use Medicaid to pay for long-term care costs as they get older. The planning process can be a little complicated, but it involves some basic steps.

First, those developing a Medicaid plan have to know what they own. Medicaid is only available to those who meet stringent asset eligibility criteria. In other words, if you have too much money, you cannot use Medicaid.

Second, once you know what you own, you then have to determine if there are any options available to you that will allow you to structure your assets in such a way that you can still keep as much as possible while receiving Medicaid. This evaluation is very complicated and can take a lot of time. It also requires the advice and guidance of an expert, which is why crafting a Medicaid plan with the assistance of your estate planning attorney is absolutely essential.

Who needs a Medicaid plan?

Almost anyone can benefit from crafting a Medicaid plan, but those most in need are those who believe they might need long-term care in the immediate or near-term future. Because Medicaid eligibility criteria are so stringent, and because there are significant time limitations associated with them, you have to be able to begin your Medicaid planning efforts as soon as possible. In fact, if you wait too long to begin Medicaid planning, you might be forced to spend some or all of your nonexempt assets before you receive the Medicaid benefits. This will effectively mean that you will have very little, if anything at all, to pass on as inheritances if you are forced to pay for long-term care costs on your own instead of using Medicaid to pay for them for you.