While growing older, it’s crucial to think about how your health concerns might affect your livelihood. And, to be honest, health issues are likely to impact the livelihood of other members of your family as well, not to mention your accumulated assets. No one is immune, so it’s important to consider such things even if you are in good health, and it’s a reasonable solution to consult a Medicaid attorney in New York.
We know that it might feel intimidating to picture hospital stays, nursing home and long term care in your mind. However, the best time for planning your future is when you’re in sound mind and body, isn’t it?
If you approach your future carefully, you might be interested in Medicaid planning options in New York. To start with, this federal and state program was developed to expand access to health care for low-income individuals and families. Unless you are classified as low-income, you might need professional help with asset transfers. In addition, you may need asset protection as well.
At Shtark Law PC, a law firm based in New York, our skilled Medicaid planning attorneys will provide you with professional assistance in Medicaid planning. Also, we will help you allocate your finances to ensure that you won’t use up your savings on nursing home elder care or other medical services. In this article, we are explaining what Medicaid is, why you might need assistance with the Medicaid planning, and also walk you through the most common strategies that help become eligible for Medicaid application.
What is Medicaid Planning?
Medicaid planning is assistance with Medicaid applications that is aimed at ensuring the applicant’s compliance with Medicaid rules. In other words, it is a method of managing your possessions in order to satisfy eligibility guidelines. Most typically, elder law attorneys recommend Medicaid planning to individuals whose resources go a little beyond the financial benchmark for eligibility.
What is Medicaid
Medicaid is a federal and state program aimed at assisting people with limited income in covering their medical costs. The program offers the following medical services:
Long term care
Nursing home care
Emergency transportation and care
Medicaid Eligibility in New York
In New York, you can apply for Medicaid if you meet the following requirements:
You are a resident of New York State, a U.S. nationality person, citizen, permanent resident, or legal alien who is in need of health care assistance. Your income has to be identified as low or very low.
An applicant should meet one of these conditions:
- be a pregnant woman
- look after a child under 18
- be blind
- have a disability
- have a disabled family member
- be 65+ years old.
Low or very low income means that your yearly household income doesn’t go beyond these amounts:
Number of persons in the household
Total annual household income
If there are more than eight people in the household, add $5,958 per each one. Keep in mind that these figures are valid only for New York State, and they vary across the U.S.
Medicaid Planning Benefits
It’s a well-known fact that long term care can cost you a fortune in almost every U.S. state, New York being no exception. That’s why health issues can be a real threat for your financial resources: nursing home and long term care services might leave you without a dime in the end. What is more unpleasant, you risk leaving your beloved heirs without any legacy. Still, you can avoid this by working with a competent Medicaid lawyer who will help you with Medicaid planning. At Shtark Law in New York, an experienced Medicaid planning expert will give you details about rational legal approaches that can help protect your belongings. In other words, Medicaid planning helps you make your assets inaccessible.
Importance of Medicaid Planning: Case Studies
Medicaid planning is essential as over 50% of people need nursing home care at some point of their lives. In New York nursing homes, elder care typically costs $90,000 per year, or even more, so your entire life savings are very likely to be exhausted within a while. In this section, we’ll look through the typical scenarios when people might need help from a Medicaid planning lawyer.
One Spouse Needs Care
Even if one spouse gets health problems, the cost of nursing home for her or him in New York might quickly consume the couple’s savings. Still, keep in mind that the primary home is exempt from the Medicaid asset limit, and doesn’t impact Medicaid eligibility, as it’s suggested that the other spouse carries on living in it. Unfortunately, the spousal impoverishment guidelines do not apply for couples in which only one spouse seeks regular Medicaid. In such situations, it is necessary to consult a Medicaid planning expert who will develop a viable strategy to protect the assets for the non-applicant spouse.
Both Spouses Need Care
In New York, if both husband and wife require long term care, and can’t look after each other, it might exhaust their savings in a flash. In addition, this also creates a burden for their children, no matter if parents stay in the nursing home or are given home care. As you see, Medicaid planning is fairly crucial in this kind of case.
A Healthy Couple
Although that is not critical, it’s a good idea to ask for Medicaid planning advice when both you and your loved one feel absolutely well. Life might be unpredictable, no one is 100% immune to health issues and may need nursing home or long term care at a certain point of life. Therefore, you might want to preserve your belongings for your heirs and consider planning a Medicaid application.
Medicaid Planning Strategies
Let’s have a closer look at the most common income and asset planning methods that can be used to gain Medicaid eligibility in New York.
A Medicaid Asset Protection Trust
To keep your property from being counted towards Medicaid’s limit, you can set up a Medicaid asset protection trust. In addition, these trusts allow you to securely pass your belongings to your family after you depart this life. Don’t hesitate to get in touch with a Shtark Law Medicaid trust attorney in New York, who will give you detailed explanations on your options and provide you with quality legal assistance.
A Funeral Trust
As an alternative, some people create irrevocable funeral trusts, which are aimed at covering funeral expenses in advance. In fact, setting up an irrevocable funeral trust can decrease countable resources by up to $15,000 (that’s $30,000 for married couples). What is more, the applicant’s family won’t have to pay for the funeral when this person passes away.
When only one spouse seeks nursing home Medicaid, an annuity would be a reasonable solution. This strategy turns countable possessions into non-countable income for the community spouse. In other words, a certain amount of money is paid to an insurance vendor, and the healthy spouse receives regular monthly payments from this sum.
Spousal Asset Transfers
Another option implies spousal asset transfers. If only one of the spouses seeks nursing home Medicaid, the other spouse, who stays at home, is protected against impoverishment. New York allows the community spouse up to $15,450 in assets. In essence, this allowance keeps the non-applicant spouse from the effects of having too little resources to live, and, at the same time, it reduces the assets of the applicant to a Medicaid eligibility level.
Lady Bird Deed
Next, you can take advantage of a lady bird deed. It is a special form of life estate deed that gives the owner control over the assets until this person dies. After demise, estate is automatically passed to the new owners. The ownership of the property changes, so these assets aren’t counted as a part of the Medicaid recipient’s estate. Furthermore, this strategy helps ensure that the Medicaid recipient’s home will be transferred to his or her children as an inheritance. Contact our Medicaid lawyer in New York for more information.
Some couples get divorced when one spouse needs long term care Medicaid. Employing this technique can protect assets for the non-applicant spouse, and reduce the countable belongings of the applicant one. However, Medicaid divorce makes sense only when a couple owns considerable assets. An elder law attorney can give you more details and, taking into account your personal circumstances, provide you with a solution. In general, this is one of the most complex strategies.
A Skilled Lawyer Can Devise Solid Medicaid Planning Strategies
As you can see, it’s highly achievable to protect your assets and qualify for Medicaid. A Medicaid attorney will provide you with the necessary legal advice and assist you in preparing for long term care in New York.
To Wrap it Up
In New York, a Medicaid application can cover your long term care expenses, however, you must meet certain financial requirements. That’s why it’s a good idea to consult a Medicaid elder law attorney who will determine if you are eligible, and help you meet Medicaid compliance regulations if you are not.