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What Is Medicaid Planning?
Medicaid is a federal insurance program designed to provide health care coverage to low-income individuals, including children, pregnant mothers, elderly adults, and those with disabilities. Those who are eligible for Medicaid receive benefits to help them pay for important medical treatment and procedures.
To be eligible for Medicaid benefits, a person must have an income that does not exceed a certain amount. A person’s income and assets are taken into account when determining their eligibility for Medicaid. However, not all sources of wealth are counted when it comes to demonstrating Medicaid eligibility. Like tax returns, certain items can be excluded or deducted from your income for purposes of proving eligibility for Medicaid.
Will My Parents Lose Their House?
For retired adults, Medicaid is an essential benefit. Many people who reach the age of retirement tend to be more susceptible to health complications. Senior-aged adults typically need more prescription medications and may need important—and often expensive—medical interventions. If an elderly adult loses eligibility for Medicaid, they are personally responsible for more—if not all—of their health expenses.
Major medical conditions, such as cardiovascular disease, diabetes, cognitive impairment, and other disabling illnesses, can eat up a significant amount of financial resources. Without a steady income, other than retirement or pension proceeds, health care expenses can rapidly overwhelm the economic resources of a retired-aged adult.
As a result, a major illness has the potential of plunging elderly adults into debt. Without an effective plan to counteract this, parents and grandparents are at risk of losing their assets—including their home—to repossession and foreclosures to pay off creditors.
How Will Medicaid Planning Protect My Parents?
Medicaid planning is designed to preserve a person’s eligibility for Medicaid benefits by looking at the income requirements and rules for eligibility and organizing a person’s property and assets accordingly.
For example, assets can be placed in a special type of trust to prevent them from being counted toward your parents’ income for Medicaid eligibility purposes.
Property held in a trust is legally owned by the trust and managed by a person known as a “trustee.” A trustee cannot use trust property however they please. Instead, trustees have a legal duty to control and manage trust property to serve the interests of the trust’s beneficiaries, not their own self-interests. A trustee usually invests trust assets to produce income that is later distributed to the trust beneficiaries.
The terms of a trust can be crafted so that the trust assets, and the income derived from those assets, do not count toward the beneficiary’s income for purposes of determining Medicaid eligibility.
For More Information, Contact the Law Office of Wendra J. Moran
If you want to know more about how to protect your parents and their interests, you should call the Law Office of Wendra J. Moran for legal advice. Attorney Wendra Moran is a skilled and experienced estate planning attorney who is dedicated to protecting you and your family’s legal and financial interests.
To schedule an initial consultation with Attorney Wendra Moran, call the office at (225) 228-4445 or complete an online request formtoday.