Although New Yorkers are worried about their own well being, those married also put much effort into caring for and about your spouse. This is why discussions about the end of their life and their estate plan are essential throughout a marriage.
While understanding what happens to a partner at the time of their death, it is also important to discern what end-of-life care will look like. Because many Americans end up in a nursing home, it is important to acknowledge this as a possible reality. Additionally, consider how the costs associated with this care will be paid.
Medicaid planning
Young or old, married couples cannot overlook the high costs associated with long-term care facilities like a nursing home. While it is possible to save up money over time to cover these costs, this is not always possible or the best answer for individuals and couples. What many want and choose to do is to preserve and protect their assets in the event that they enter a long-term care facility due to disability, incapacitation or old age.
This is where Medicaid eligibility can be essential. But how can one prove eligibility when they have savings and assets that they seek to pass onto loved ones after they pass? It should be further noted that for married couples, the assets of a spouse are also considered when establishing eligibility, which is based on one’s income and assets.
Protecting assets
There are three ways to protect assets through Medicaid planning. The first is to gift assets to adult children or other individuals; however, five years must have passed since this gifting or the value of the gift will be counted to determine an individual or their spouse’s eligibility for Medicaid. The second way is to have a third-part fund a special needs trust. Finally, the third option is to create a self-settled special needs trust for a spouse.
In order for one’s assets to be treated as unavailable for him or herself and a spouse, the trust cannot be created or funded during the creator’s lifetime. When creating a self-settled special needs trust for the benefit of a spouse, this must be created under one’s will. This requires a detailed and customized will that has assets titled in just the testator’s name.
Medicaid planning can be a detailed and complex process. Thus, it is a step that should not be taken lightly or overlooked. Those seeking to begin this planning process or update an estate plan to ensure Medicaid planning is properly addressed, it is important to fully understand the process and what legal rights one has.
