Individuals often assume that their health insurance will adequately cover their medical expenses, including long-term care in an assisted living facility or a nursing home. The prospect that insurance coverage will be adequate to cover these costs is low. Most insureds have life insurance benefits caps, and medical costs have soared during the past few years.
The goal of estate planning is preparation. One important aspect of this process is drafting a will, establishing health care directives and powers of attorney. For example, asset protection planning is crucial because it may include funding trusts.
What asset protection planning entails
This aspect of estate planning involves crafting a strategy to shield your assets from creditors, court judgments and divorce. It’s not uncommon for individuals to rely on asset protection planning to protect valuable property, such as their homes, from being liquidated to cover their medical expenses later in life. This outcome is a real possibility unless the property’s owner has pre-planned for this occurrence by placing the home in a trust. Why?
How Medicaid eligibility and expense recovery work
Individuals who have valuable assets don’t often qualify for Medicaid. Instead, the government expects potential recipients to liquidate their property to pay their medical or long-term care costs. Even if someone does qualify for benefits, their loved ones can expect Medicaid to aggressively try and recover their expenses after a recipient’s death.
Trusts can enhance prospective recipients’ eligibility for benefits and minimize their chances of having their estate depleted through Medicaid collection efforts.
Having access to Medicaid can be very valuable. Trusts are key to you qualifying for this needs-based government-sponsored insurance program.