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Three ways to engage in Medicaid planning

On Behalf of | Mar 5, 2024 | Estate Planning

Are you worried about the costs of your potential long-term care needs? If not, you probably should be. After all, these costs can quickly skyrocket, eating through your savings in short order. That means that by the time all is said and done, your estate may be left with far less than you expected, which can mean that your loved ones will be less supported when the time comes for them to inherit your estate.

Planning for Medicaid

One way to protect your estate, though, is to engage in Medicaid planning. Here, you lower your assets and your income so that you meet eligibility requirements for the federal program. That way your care needs will be covered by Medicaid, thereby protecting your assets more fully. Here are some ways that you may be able to reach eligibility:

  • Spend down: You might be able to spend some of your assets on qualifying items in order to reduce your assets to a level that allows you to qualify for Medicaid. There are some restrictions here, though, so make sure that you understand them before moving forward with this plan.
  • Gifting assets: You’re allowed to give away about $16,000 per year to an individual, which is a quick way to pass down wealth, reduce your assets, and enjoy watching your loved ones enjoy the money that you’ve given them.
  • Medicaid asset protect trust: This type of trust allows you set aside some wealth so that it isn’t counted for Medicaid eligibility purposes. This will allow you to eventually pass those assets down to your loved ones while still qualifying for Medicaid.

Create the sound estate plan that’s right for you

There’s a lot at stake when you’re dealing with long-term care. After all, an ineffective estate plan can cost you tens of thousands of dollars in otherwise avoidable expenses. That’s why if you hope to protect your assets and your loved ones as much as possible, then you may want to discuss estate planning with an experienced attorney.