Medicaid Estate Recovery 101

The average nursing home in Kentucky costs $7,330 per month. Planning for this expense is essential as Medicaid expects to be repaid the amount of money it spent on your care. In some cases, your family may be forced to sell your home to pay the government back in a process called Medicaid Estate Recovery. Fortunately, Elder Law Lawyers is here to help you avoid this situation through financial and estate planning. Below, we share some ways to plan for your future long-term care. 

What is Medicaid Estate Recovery?

Medicaid Estate Recovery is designed to repay Medicaid for the money it contributed to an individual’s nursing home care after their death. This repayment is obtained through the sale and seizure of assets like the individual’s home. 

How Can I Avoid Medicaid Estate Recovery?

While repaying the government for nursing home care ensures Medicaid is available to all who need it, it prevents your estate from being distributed according to your wishes. Here are ways to avoid Medicaid Asset Recovery and protect your assets. 

1. Medicaid Planning

Medicaid planning can help you pay for your future long-term care expenses. This plan starts with a detailed assessment of your circumstances and includes various strategies, such as:

• Trusts
• Annuities
• Transfers
• Exemptions

Along with creating this plan, a financial advisor and estate planning attorney can collaborate to find a way to pay for your long-term care.

2. Advanced Directives 

Before considering how to pay for long-term care, you need to determine the type of care you desire. An advanced directive can help you to do just that. This document allows you to express your wishes to your family and healthcare provider so they can make the right decisions for you, even if you cannot speak for yourself.

Two types of advanced directives can be customized to your situation, including living wills and powers of attorney. While a living will only pertains to your end-of-life care, a power of attorney names an individual of your choosing to make medical decisions on your behalf when you cannot do so yourself.

3. Qualified Income Trust

Medicaid does have income limits for the benefits it offers. However, federal law permits applicants to deposit their income into a qualified income trust (QIT) and still qualify for Medicaid, as these funds are not counted towards the income limit. This, in turn, allows applicants to retain their assets and distribute them as they wish.

Frequently Asked Questions About Medicaid Estate Recovery

While the prospect of Medicaid Estate Recovery can be frightening, working with an estate attorney, like those at Elder Law Lawyers, can alleviate your concerns. Our team can answer any questions you may have about this process. Below are some common questions we hear from our clients about Medicaid Estate Recovery.

1. What kinds of assets can Medicaid recover?

In the state of Kentucky, the following assets can be used to repay Medicaid: 

• Cash
• Investments
• Property 

To protect these assets and others, it is important to have the appropriate estate planning documents in place well before you need long-term care. 

2. How can I benefit from Medicaid planning?

Along with avoiding the Medicaid Estate Recovery process, the benefits of Medicaid planning include:

• Long-term care cost savings
• Obtaining assistance without diminishing assets
• Protecting your partner’s income and assets
• Maintaining your desired standard of living
• Making sure your estate is distributed as intended
• Avoiding potential family or legal conflicts

To determine how Medicaid planning can benefit you specifically, consult your attorney.

3. What happens if I don’t protect my assets from Medicaid Estate Recovery?

If there are no protective measures in place, like estate planning documents, Medicaid can place a lien on your home, claiming it as collateral for repayment. To prevent this from occurring, consult with an estate planning attorney. 

Protect Your Assets & Your Future in Kentucky

While you may think it’s too soon to start Medicaid planning, that’s far from the truth. This important step helps you prepare for possibly needing long-term care in the future and protects your assets from Medicaid Estate Recovery. To get started on your Medicaid planning, contact Elder Law Lawyers today.

Plan for Your Future in Kentucky With Elder Law Lawyers

Avoiding Medicaid Estate Recovery is just one part of creating a plan for your future. The right estate planning documents can help you afford long-term care and make your wishes known to your family. Contact Elder Law Lawyers online or call us at 859-543-0061 to start planning for your future today.