Part of the estate planning process should focus on what will happen to you if you become incapacitated or need long-term care. Many people overlook this step, which can leave them and their family in a difficult spot if additional care is needed. While you can utilize a long-term care insurance plan to potentially offset your costs, these plans can be expensive and oftentimes carry strict terms that are difficult to meet. You should consider one of those coverage options before entirely writing it off, but another option is to see if you can qualify for Medicaid.
How estate planning may help you qualify for Medicaid
If you qualify for Medicaid, then the government will help pay for your long-term care. But to qualify, you’ll have to meet certain asset and income thresholds. This is where estate planning may prove helpful. By utilizing certain trusts, you may be able to effectively reduce your assets to the point that you qualify for Medicaid. This is because once assets are placed in certain trusts, you no longer own them, and they can no longer be counted against you for Medicaid eligibility purposes.
But don’t make the mistake of thinking that you’ll be completely without needed assets as you try to qualify for Medicaid. There are certain trust types out there that may provide you with a little bit of income while still allowing you to secure the long-term care that you need.
There can be a lot of moving pieces to an effective estate plan. So many, in fact, that it can quickly become confusing and daunting. But this isn’t something that you can put to the side forever. Instead, now is the time to think about what you can do to create the estate plan that suits your needs.