The cost of elder care in the United States, and New England in particular, could bankrupt many families in a matter of months without financial planning and the help of government assistance. If an older person is in need of long-term care services in Rhode Island, approval for Medicaid can save them and their family hundreds of thousands of dollars. However, Medicaid eligibility can be complicated to understand and eligibility challenging to obtain. For this reason, many people seek the help of financial or legal professionals to structure their assets in a way to both secure Medicaid eligibility and protect their assets from encumbrance or sale.
In order for someone to be eligible for Medicaid assistance, their countable assets and income must fall below a certain threshold. Legal professionals can assist their clients by creating trusts and using other estate planning strategies to meet the asset and income thresholds and secure Medicaid eligibility. In the vast majority of cases, the cost of Medicaid planning will be substantially less than the amount of money saved by securing Medicaid eligibility to cover long-term care expenses.
Depending on a Medicaid applicant’s marital status, the value of a primary home may or may not be counted toward the Medicaid eligibility cap. If one spouse does not need long term care, a marital home will not be counted toward the asset limit; however, the federal government may be able to place a lien on a property and recoup some of the assistance from the spouse’s estate down the line. Couples seeking to protect their estate for children or other heirs, as well as single homeowners in need of long term care, may be able to create certain types of trusts to keep their home from being counted or taken by the government while still maintaining Medicaid eligibility.