For some older adults, the years immediately before their retirement will be when they first put together an estate plan. Plenty of others will already have an estate plan in place when they start discussing retirement, but recognize that they will need to make some updates. After all, their children no longer require guardianship, and they may now have different assets to distribute among their beneficiaries as well.
Another issue that older adults may need to address when creating or updating documents is the possibility that they will require Medicaid benefits as they get older. Medicaid can cover forms of care and treatment that Medicare will not generally pay for, like residency costs at a nursing home and the expenses associated with skilled nursing support in someone’s home.
Why advance planning is important
The New York Medicaid program is not accessible to everyone. It is a needs-based program, and applicants will be subject to a thorough review of their resources and income. The state will actually look back at five years of financial records, and any large gifts or transfers could put someone at risk of a penalty.
Typically, older adults will benefit from planning ahead to qualify for Medicaid at least five years or 60 months before they need benefits. That way, they can make strategic gifts and transfer certain resources to trusts or family members without risking a penalty. Timely transfers will help someone qualify for Medicaid more quickly when they need benefits later and can protect those assets from estate recovery efforts after someone dies.
Without proper planning, older adults may not be able to get Medicaid when they need help the most. Even if they do qualify for benefits, their loved ones could end up in a difficult situation where they lose all inheritance rights because of estate recovery efforts after they die. Elder law planning, including Medicaid planning, is beneficial both for the security of an older adult and for the protection of the legacy they want to leave for others after their death.
Learning more about Medicaid planning and other elder law concerns with the assistance of a legal professional can benefit those who are thinking about their needs after retirement.