Many older adults in Michigan will eventually need extensive medical support as they age. Some people want to age in place and try to continue living in the same home in their golden years, which may require visits from nursing professionals. Others may have more significant support needs and may eventually need to move into a nursing home.
Nursing home facilities cost thousands of dollars a month even if someone shares a room with another resident, which can be more than someone can pay with their retirement savings and Social Security benefits. Your Medicare coverage won’t apply to your nursing home expenses, which may mean that you require Medicaid.
Qualifying for Medicaid can be a challenge for some people if they don’t plan ahead.
Michigan looks back at years of financial records
Advance planning is key to getting Medicaid benefits because the state cares about more than just your immediate financial circumstances. When you apply because you need to move into a nursing home or receive other expensive medical care, the state will review five years or 60 months’ worth of your financial transactions.
Any large gifts or transfers made during that time will trigger a penalty. The state will determine the value of the inappropriate transfers and then expect you to pay for a comparable amount of care with your own resources. Planning ahead so that you have already made transfers and change the ownership of your most valuable property will make it much easier for you to get benefits quickly.
You also will reduce the chance of needing to pay a penalty or of your loved ones losing property from your estate to Medicaid recovery efforts.
How does advance planning work?
An adult preparing for retirement or thinking about their estate can also make plans to qualify for Medicaid if they need benefits later. Medicaid planning often involves transferring assets, making it trust or creating a schedule for annual gifts for family members and loved ones. The exact approach that you employ will depend on what assets you have, how soon you think you may need benefits and the beneficiaries that you want to receive property from your estate.
Thinking ahead about your future medical needs and how you will cover those costs will both protect you and preserve the legacy you want to leave.