As people prepare for retirement, they have to think carefully about what may happen in the future. Those who do not yet have an estate plan may finally decide to sit down and draft a will. Those who already have basic testamentary documents may decide to revise their paperwork to reflect their changing situation.
One of the most important steps older adults can take when preparing for retirement is Medicaid planning. Why do those preparing for retirement need to plan to more easily qualify for Medicaid?
Medicare won’t cover everything
Retired adults usually expect that Medicare will cover their expenses when they need medical treatment. However, there are many limits to Medicare. Medicare does not cover long-term rehabilitation services or nursing home costs. Adults need Medicaid to pay for those expenses if they do not have enough money to cover those costs.
Unfortunately, qualifying for Medicaid can be very difficult. There are limits to both the personal property someone can have and their income. Advance planning often entails changing how people hold certain assets, possibly by using them to fund a trust.
Thorough Medicaid planning will allow someone to qualify for benefits more quickly if they need support during their golden years. Any major gifts or transfers in the five years before someone applies can trigger delayed benefits and financial penalties. Therefore, planning before retirement can reduce someone’s risk of a penalty when they need benefits quickly.
Medicaid planning can also help reduce the chances of Medicaid estate recovery claims taking the property that someone wanted their loved ones to inherit. Learning more about Medicaid planning and other aspects of elder law may help people maximize their financial stability during retirement.