Long-term care expenses, such as moving into a nursing home, can be something you plan for in advance or end up dealing with unexpectedly. As many as 70% of adults aged 65 or older will need long-term care at some point. The average cost for a semi-private room in a nursing home is around $63,144 a year in Missouri.
You may have heard of the five-year plan to protect your assets when planning to qualify for Medicaid (called MO HealthNet in Missouri) to assist with the costs of long-term care. However, there are other ways to keep your wealth even as you enter a nursing home using Medicaid without planning five years in advance. Your countable assets must be less than $5,909.25 (applicable until June 2025) in order to qualify, but there are legitimate ways to spend down your money without losing it all to nursing home costs.
Many people may tell you there isn’t much that can be done if you don’t plan five years in advance. But that’s not typically true.
Stop listening to the internet and everyone else saying you have to lose all of your money. You can leverage income streams, which are not assets, to get on Medicaid quickly without losing everything, even if you haven’t planned for a nursing home.
Don’t Listen to the Doomsday Scenario
We think you’ll be surprised by how much we can save you and get your family member on Medicaid faster than you expect. You don’t need to be in poverty to benefit from Medicaid. Strategically moving around your assets can reduce your resources while still allowing for a partial transfer to your spouse or children.
What other people won’t tell you is that you can create income streams and account for gifting penalties by turning assets into income. The key is to plan for the long term on a short-term deadline.
Technique 1: Create an Estate Plan That Works
One thing you can do is create an estate plan that transfers your wealth to your children now in an irrevocable trust. They can use that wealth to pay for your nursing home expenses for the first five years. With a high level of assets, preserving more down the road may be the goal. Our attorneys can help you navigate how to do this while complying with Medicaid regulations. You don’t have to give up your family farm!
Technique 2: Pay the Medicaid Penalty
Medicaid uses a formula to assess a financial penalty for transferring assets in less than five years. Compared to the amount of wealth you want to save, these penalties could be relatively small.
You would also have to delay going on Medicaid for a period of time as part of the penalty. But, again, you can use your wealth to create income streams to pay for the nursing home until Medicaid kicks in. We can show you how to set up income streams that meet Medicaid eligibility requirements.
Technique 3: Your Spouse Can Keep Assets!
Your spouse can keep a certain amount of assets if that spouse is not in a nursing home. The remaining assets can often be used to create an income stream for the non-nursing home spouse to preserve even more. Again, we can help you navigate how your spouse can help maintain wealth if a loved one goes into a nursing home.
Contact Our Experienced Attorneys for Legal Advice on How to Medicaid-Proof Your Assets
Our attorneys have helped many clients save their assets and wealth when someone needs to go into a nursing home. Contact us or call (417) 887-4170 to schedule a consultation.