It becomes increasingly important for a Medicaid recipient to engage in estate planning as they age. If they don't, then they risk losing access to the benefits that they rely upon for their long-term medical care.
Most individuals qualify to receive Medicaid provided that they meet two conditions. Their monthly income mustn't exceed the $2,000 threshold that most states have in place. The recipient shouldn't have more assets than the essentials such as a lower-cost car, home, life insurance policy or funeral plan.
There are some steps that Medicaid recipients can take to preserve their eligibility for these government-sponsored medical benefits.
The Medicaid recipient's spouse can have the marital home deeded to them. If they sell it, they can keep a portion of the proceeds after their death without jeopardizing their right to receive benefits.
Although it would result in a look-back period or a potential delay in receiving benefits, the Internal Revenue Service (IRS) does allow Medicaid recipients to gift up to $14,000 to someone else to divest themselves of some assets. They can do this to help them qualify for benefits.
A Medicaid recipient can reject any spousal support that they may be owed. This doesn't mean that their ex will walk away without having to pay alimony. They just may agree to transfer tangible property instead of monthly monetary payments.
Prospective Medicaid recipients can also transfer their assets to their disabled or blind children who are less than 21-years-old, their spouse or into a trust for someone under the age of 65.
The look-back period for all transfers is five years. It's therefore virtually impossible for a prospective Medicaid recipient to turn over assets to someone else and then to apply for and qualify to receive these medical benefits right away.
Transferring assets is a key part of preserving your eligibility for Medicaid in North Carolina. Doing this incorrectly or delaying this may result in you losing timely access to these much-needed medical benefits. A wills & estates attorney here in Statesville can help you in planning for both your future and that of loved ones as well.