Medicaid Planning May Be Most Beneficial for Those with Little Savings

It’s common for me to speak with families about Medicaid planning, and often, the idea of such planning is immediately dismissed as unnecessary because Mom and Dad “only” have $50,000 in savings, a house and a car. The family assumes that since there is only $50,000 in liquid assets to spend down, they need to spend that as quickly as possible to obtain Medicaid eligibility.  What they don’t know is that when assets are relatively low, financing long-term care with the Medicaid program is more about protecting the healthy spouse that’s living in the home than securing payment for the ill spouse’s nursing home.

Let’s say Dad has a stroke and needs to go into a nursing home, and Mom remains healthy, but her income is only $1,100 per month from social security. Instead of spending the $50,000 on Dad’s nursing home until it’s depleted below the Medicaid asset limit, we can design a plan that allows Mom to keep the home, the car and about $25,000 in cash while using the other $25,000 to benefit her by paying off the car, the mortgage or putting a new roof on the home. The point is that everything the couple owned when Dad went into the nursing home, with good planning, can be utilized for the benefit of Mom as she lives at home in the community.

Mom would also be entitled to enough of Dad’s income, in addition to her own $1,100 of Social Security, to ensure she has enough money to pay her bills and other needs.  For a family in this situation, saving the entire $50,000 of the couple’s life savings for the benefit of Mom could make the difference between her thriving in the community for years instead of ending up in a facility herself, reliant on Medicaid.

Medicaid and Elder Care Planning are not just for the wealthy. I often feel my clients that have less to protect need good planning the most, and I really enjoy helping them realize those benefits.

Posted in Blog, Older Adults.