Medicaid helps millions of Americans throughout the United States. If you believe you are eligible to receive Medicaid, it is beneficial for you to begin planning for your eligibility at least five years in advance. When eligibility is determined, the history of your assets will be looked into. As a result, you must have a clear picture of your financial status, making early Medicaid planning critical. The failure to prepare yourself can result in serious fines and other legal repercussions. It is best to reach out to an experienced attorney to ensure that you are on the right track. Read on to learn more about the process.
What Is Medicaid Planning in Michigan?
Medicaid planning is the process of organizing your finances and assets as a way to qualify for Medicaid while preserving as much of your estate as legally possible. In Ypsilanti and the surrounding Washtenaw County communities, Medicaid planning is often utilized by older individuals who are considering nursing homes and other long-term medical expenses.
Restructuring assets is a significant part of Medicaid planning, as the strict eligibility limits made early action imperative to avoid unnecessary financial hardship later.
Key Facts About Medicaid Planning
- Medicaid helps cover the cost of long-term care for eligible applicants
- Medicaid is dependent on the income and liquid assets
- Medicaid applications typically involve a five-year lookback period
- Inadequate transfer of assets can result in delays that impact eligibility
- Irrevocable trusts are commonly used in planning
- Early action can help families secure their home and savings
Common Reasons Families Pursue Medicaid Planning
- Preparing for nursing home expenses
- Protecting assets from long-term care costs
- Preserving assets for future generations
- Avoiding unnecessary financial strains
- Structuring assets before a Medicaid application
Who Is Eligible to Receive Medicaid in Michigan?
Medicaid is a program for individuals whose income and/or resources are below certain levels. That being said, there are individuals who have medical bills that may be eligible even if their income and/or resources are above the Medicaid income levels that are allowed.
These eligibility levels generally change on January 1 of every year, so individuals looking to apply for Medicaid should determine their eligibility before doing so.
Individuals who are eligible for Medicaid can include children, pregnant women, single individuals, families, and individuals certified blind or disabled. If you are unsure whether you are eligible to receive Medicaid, you can reach out to our firm to discuss your various options.
Medicaid Eligibility Factors
- Monthly income
- Countable financial assets
- Disability
- Age
- Household size
- Medical expenses
- Long-term medical needs
- Past asset transactions
What Assets Will Medicaid Review?
When reviewing an applicant’s eligibility for Medicaid, several assets will be considered, including:
- Bank accounts
- Real estate
- Investment accounts
- Retirement funds
- Trusts
- Gifts and transfers initiated during the five-year lookback period
- Life insurance policies
How Far in Advance Should Medicaid Planning Begin?
Unfortunately, many people are unaware that Medicaid planning should begin at least five years before long-term care is necessary. Because this involves a five-year lookback period in which asset transfers are subject to review and may count against your eligibility, early planning is critical.
Failure to begin planning early means that individuals may have to spend down a considerable amount of their assets in order to become eligible for benefits. As such, early planning can help families in Washtenaw County and throughout Michigan receive important legal and financial protections during this process.
Reasons to Begin Medicaid Planning Early
- Helps families prepare for Medicaid’s five-year lookback period
- Allows you to legally restructure assets
- Preserves more wealth
- Reduces financial stress during medical emergencies
- Helps families plan and prepare for nursing home expenses
What Are the Best Ways to Restructure Assets in Michigan?
As stated before, your assets will be looked into in order to help determine your eligibility. Luckily, there are a variety of ways that you can restructure your assets to help you prepare for Medicaid eligibility.
Medicaid Asset Planning Strategies
- Gift certain assets to family members or loved ones
- Create irrevocable trusts
- Transfer the title of the home to the beneficiaries who would receive it upon the decedent’s passing anyway
- Pay off debts and mortgages
- Make repairs to your home
- Prepay for your funeral expenses
- Consult an attorney regarding other restructuring methods that may work for your specific situation
How Irrevocable Trusts May Help With Medicaid Planning
Trust funds are a helpful way to protect your assets during the Medicaid planning process in Michigan. Assets transferred to a properly structured irrevocable trust may no longer count as personally owned assets for the purposes of Medicaid eligibility.
As irrevocable trusts are generally unable to be modified or revoked, this can assist families in preserving certain assets while preparing for long-term care needs.
What Happens if You Don’t Plan Ahead in Michigan?
If you do not have proper Medicaid plans in place, you may ultimately need to spend a considerable amount of your savings and assets on long-term care before you reach the eligibility requirements to receive these benefits.
Risks of Failing to Plan for Medicaid
- Loss of savings
- Forced liquidation of assets
- Delays in approval for Medicaid benefits
- High out-of-pocket expenses
- Financial hardship for loved ones
Schedule a Consultation with Our Ypsilanti Medicaid Planning Firm
Estate planning can be incredibly complex, especially if you are beginning to consider Medicaid planning. That is why it’s in your best interest to connect with an experienced attorney with Collis, Griffor, & Hendra to discuss your legal options. Our team understands how overwhelming these matters can be to navigate, which is why we will do everything in our power to help you fight for the best possible outcome. If you need a seasoned firm to help you with any estate-related matter, please do not hesitate to contact Collis, Griffor & Hendra today to schedule a consultation.
