Many individuals understand the importance of engaging in estate planning, yet many put off doing so until later in life. It becomes increasingly important for individuals nearing the age at which they can receive Medicaid benefits.
Individuals who don’t engage in Medicaid planning as they age put themselves at risk of losing access to these health care benefits they rely on to cover their medical care.
Who qualifies for Medicaid benefits?
There are two primary requirements that prospective Medicaid recipients must meet to qualify for benefits. First, their monthly income can’t exceed the $2,000 that most states honor. Second, recipients should own very basic assets such as a home, lower-cost car, funeral plan and life insurance policy. You could lose your eligibility for Medicaid if you were to have more assets than these.
What can you do to preserve your Medicaid eligibility?
There are some measures you can take to continue to be eligible for Medicaid. One option is to deed your marital home to your spouse. You may be able to keep a portion of the proceeds from that sale after your husband or wife’s death without putting your Medicaid benefits in peril.
You should keep in mind that there may be a delay in your receipt of Medicaid benefits if you do this, as it will fall into the look-back period. Know that the Internal Revenue Service (IRS) allows you as a Medicaid recipient to divest yourself of up to $14,000 in assets. You may qualify for benefits by doing this.
Another option for preserving your Medicaid eligibility is to reject any alimony that your former spouse owes you. You may ask them to transfer property to you instead of paying you a monthly stipend.
A third option you might want to consider to preserve your eligibility for Medicaid is to transfer your assets to a blind or disabled child under the age of 21. Funding a trust that benefits a spouse or someone else under the age of 65 may be a good option as well.
Preserving access to your Medicaid benefits
Reducing your assets is key to preserving your eligibility for Medicaid benefits here in Florida. You may delay your receipt of these much-needed medical benefits by not handling these transfers correctly. An attorney can provide guidance to ensure that everything goes as seamlessly as possible.