medicaid advisor: prepare for your care

Preparing Early for Your Care

BY COLIN SANDLER

In life, we do so many things to protect ourselves against potential adverse events. We buy health insurance in case we get sick. We buy car insurance in case we have a car accident - and homeowners’ insurance for the many things that can go wrong with our home.

Still, even in a society where these insurances are something most of us buy in to, so few people do any planning for their longterm care needs. Many people find the cost of longterm care insurance prohibitive. Or they may not qualify for it by the time they seek it out. So what else can we do?

Meeting with a Medicaid specialist and/ or an elder law attorney while you're still in good health is an important first step. You can do some strategic planning with your assets to ensure you will be eligible for benefits when the time comes. The earlier you do this planning, the more likely you will be able to shelter your assets. Moreover, getting educated and understanding your options will make you better prepared for certain possible eventualities.

The most common tool for sheltering assets in advance is an irrevocable trust. Typically, an irrevocable trust can be funded with property, life insurance policies, annuities, or other financial assets.

You would not place any kind of retirement assets into an irrevocable trust but those assets can be exempt once you are taking income from them.

A primary reason people push back on the idea of an irrevocable trust is it requires you to give control of those assets to your trustees, which are often your children but can be anyone you trust.

Although technically the person who creates the trust can no longer directly access the assets, the trustees can access most trusts if needed. More often than not, assets placed in a trust, such as property or life insurance, are sitting there - accumulating value for the future. Another important reason to do some preemptive planning is to make sure you have essential, yet simple, planning documents in place, including a power of attorney and health care proxy. Not having these items when you need them can be devastating.

If you seek to obtain a power of attorney for a loved one when she/he no longer has the capacity to appoint you, then you cannot get a power of attorney. In these types of cases, most likely, you will be forced to go to court and have a guardian appointed. And there is no guarantee that you will be appointed the guardian. It could be somebody outside the family who will then be able to make decisions about your loved one even if you don't agree with those decisions.

Planning tools such as a power of attorney and irrevocable trusts need to be completed by a qualified attorney. However, exploring the options and understanding what type of services are available for long-term care as well as how the Medicaid program can potentially help you in the future is invaluable.

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Colin Sandler, LCSW, CCM, is the owner of Medicaid Solutions and has been providing advice on aging to seniors and their families for over 20 years. Call 914-924-2566 or email Colin@Medicaidsolutions.com; 2127 Crompond Rd, Cortlandt Manor, NY.