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Should you account for Medicaid in your estate plan?

When building an estate plan, you likely have various factors to consider that can impact the distribution of your assets. One often overlooked aspect is the potential influence of Medicaid on your estate.

Understanding how Medicaid works and its implications for your legacy is essential for making informed estate planning decisions.

Medicaid basics

Medicaid is a government program designed to assist individuals with low income in covering their healthcare costs. While it primarily focuses on medical expenses during one’s lifetime, it can also play a role in the distribution of assets after death. When an individual receives Medicaid benefits, the program may seek reimbursement from their estate for the expenses incurred.

Impact on your estate

If Medicaid covers your healthcare costs, it may put a claim on your estate to recover the funds spent on your behalf. This can significantly affect the assets you intend to pass on to your heirs. Understanding the potential impact of Medicaid on your estate can help you plan more effectively and ensure the distribution of your assets according to your wishes.

Strategies to consider

To mitigate the impact of Medicaid on your estate, there are multiple strategies to consider. One option is to seek reliable long-term care insurance that can reduce your need to rely on Medicaid. Another strategy is to plan ahead by making gifts or transferring assets before receiving Medicaid assistance. However keep in mind that Medicaid has a look-back period, which may scrutinize such transfers.

Medicaid provides financial support to more than 90 million Americans. If you are one of the many people eligible for Medicaid benefits, factoring it into your estate plan when writing a will or setting up a trust can make all the difference in addressing your long-term care needs.