Even if you’re healthy now, there’s a fair chance that you’re going to need long-term care at some point in your life.
This care, whether received in a facility or at home, can be extraordinarily expensive. Most people don’t have the resources to pay for this care on their own, though, and those who do would rather save their money so that they can leave it to their loved ones. That’s why Medicaid planning can be important for you and your family.
Understanding the Medicaid lookback period
Qualifying for Medicaid means that you’re going to have to reduce your income and your assets to the point that you meet federal eligibility requirements. While there are strategies to do this, including gifting money to your loved ones and setting up certain types of trusts, Medicaid has a five-year lookback period.
The purpose of this lookback period is to see if you unjustifiably gifted or sold assets under their fair market value when those assets could’ve been used to pay for your long-term care needs.
If it’s found that those transactions were in violation of Medicaid’s restrictions, then you’ll be penalized. That’s why you and your spouse need to start planning now if you want to eventually use Medicaid to help cover your long-term care costs.
Do you want to know more about Medicaid planning?
Medicaid planning is a complicated process that requires a lot of foresight and knowledge of effective estate planning strategies. You can learn more about what strategies are at your disposal by reading up on this issue and asking any questions you might have. By doing so, you’ll hopefully be able to move forward confident that your long-term care needs will be met while protecting your wealth as much as possible.