Most established adults don’t think about Medicaid until they need health care benefits. Particularly once people start preparing for retirement, there may be an assumption that Medicare can help them cover their expenses.
Unfortunately, older adults sometimes become too complacent and may do themselves and their close loved ones a real disservice. Medicare has very strict limits regarding what it covers. Older adults who have higher support needs may find that Medicare doesn’t offer enough protection.
Older adults may need Medicaid to help pay for in-home support or a bed in a nursing home. If people don’t plan in advance for Medicaid eligibility, they may face a penalty when they apply. Even if they avoid the penalty, their loved ones may pay the price later.
Medicaid can make claims in probate court
As a need-based program, Medicaid has strict limits on both income and countable assets. The one major asset that people can generally retain without struggling to get benefits when they need them is their primary residence. Usually, older adults can qualify for Medicaid regardless of how much home equity they have accumulated.
Their home might very well be the cornerstone of their estate plan. They may intend to have a loved one inherit the property. Other times, they may instruct their personal representatives to sell the property so that all of their loved ones inherit a portion of its value. Those plans may not come to fruition if the homeowner requires Medicaid benefits.
The Medicaid estate recovery program can make a claim for repayment in probate court. The courts may order the liquidation of any valuable property, including the home owned by the decedent who received benefits. Their loved ones may not be able to inherit anything because of the cost associated with their nursing home stay or in-home support.
Advanced planning to qualify for Medicaid can help people get benefits quickly when they require them. Effective Medicaid planning can also help protect assets from estate recovery efforts. Reviewing personal holdings at length can help those preparing for retirement protect themselves and their legacy. With proper planning, older adults may be able to access Medicaid while minimizing consequences.
