The longer you live, the greater the odds are that you, or a spouse, will need long-term care. The cost of that care, on average, will run over $75,000 a year as of 2015, and is expected to continue to increase in costs in the years to come. Unless you have a long-term care insurance policy, you will either have to pay for this care out of pocket or turn to Medicaid to help cover the costs. You may have heard nightmare stories about people losing their assets when they were forced to apply for Medicaid. Specifically, you may want to know if your home is at risk if you need Medicaid to help pay for long-term care? The answer is it depends.
Medicaid will help cover long-term care costs if you qualify for benefits. To be eligible for benefits, however, your income and resources must fall below the program limits. For most elderly applicants the resources limit is where the problems begin because the limit is often as low as $2,000. The good news is that only “countable” resources are considered when calculating the value of your assets. Some assets are excluded, such as:
• The value of life estate interest in real property;
• The value of household goods and personal effects;
• The value of undivided interest in heirs property; and
• Up to $1,500; and set aside for the individual’s burial. (An additional $1,500 for a spouse, if living)
• The cash value of life insurance policies owned by the individual when the total face value of all policies is $10,000 or less.
For many applicants, their home is excluded when determining eligibility for Medicaid. The same exclusion will then usually apply when considering the risk of the Medicaid Asset Recovery Program coming after the home after your death. The ARP has the authority to files claims against the estate of a decedent who received benefits while alive. There are several ways, however, in which a primary residence can be exempt.
The best way to ensure that your home, and more importantly –other assets, are protected when you apply for Medicaid is to include Medicaid planning in your comprehensive estate plan now because transferring assets at the time you apply for Medicaid will not work.
If you have additional questions or concerns about your Texas estate plan, contact the experienced Texas estate planning attorneys at The Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your appointment today.