If you have been having health issues and believe that you may need nursing home care within the next few years, now is the time to start thinking about how to preserve your wealth.
Preserving your wealth is possible if you plan far enough in advance. There are a few things to keep in mind as you do.
You need to consider the Medicaid look-back period
According to the American Council on Aging, the Medicaid look-back period is 60 months. That means that if you make any major transfers of your assets during that time, those assets may still fall into the value of your estate and hinder your ability to obtain Medicaid.
Medicaid’s look-back period is designed to prevent Medicaid applicants from selling, giving away or hiding assets in a way that would help them qualify for Medicaid when they should have been using their assets to pay for their medical costs.
When does the Medicaid look-back period begin?
The 60-month timeline begins on the date that you apply for Medicaid. So, for example, if you set up a trust on July 10, 2022, your assets will still be included in the look-back period until July 11, 2027. You need to wait that full five years before those assets will be excluded.
Why does the look-back period matter to you now?
The sooner you can start setting aside assets and preserving your wealth through trusts or other options the better. The look-back period could force you to spend down any assets that exceed the Medicaid limits, which could mean that you could spend thousands on your nursing home care before Medicaid kicks in.
Prepare for Medicaid now by considering your trust options
If you want to start preparing for Medicaid and need to minimize the risk of losing assets during a look-back period, you need to start preparing now. Good preparation means looking into irrevocable trusts and other options that may help you minimize the value of your estate to help you better qualify for Medicaid without losing the assets you’ve worked so hard to obtain. The right Medicaid planning process could help you avoid spending more than you have to.