Navigating the ins and outs of Medicaid planning can feel overwhelming, especially with so much information available to you. However, it is vitally important to start thinking about Medicaid Planning early and to have a realistic understanding of what it consists of and what it can achieve.
Too often, people think that Medicaid Planning can achieve miracles and are disappointed by what they need to do to reach Medicaid eligibility. If you want to avoid spending down your savings, and retain your legacy for your family, you need to start thinking about Medicaid planning early, more than five years ahead of when you will eventually need it.
If you’d like a more thorough understanding of Medicaid planning, you can watch the recording of our webinar on how to plan for long-term nursing home care using Medicaid, as well as read our blog on the top questions you should be asking about Medicaid by visiting our website.
To help you out, we’re debunking the top five Medicaid planning myths that people often believe.
Medicaid planning myth 1: If I need care now, I won’t need to pay for it or spend any money
A lot of people think that if they suddenly need care, they’ll get coverage right away without having to spend anything. Unfortunately, that’s not how it works. Crisis planning usually means you’ll need to spend down your assets to meet Medicaid’s requirements. Waiting until the last minute can lead to rushed decisions and financial headaches. If you decide to give anything away, and it’s less than five years before you try to use Medicaid, there will be a penalty period. Planning more than five years ahead can help you avoid these pitfalls and ensure you’re ready when the time comes.
Medicaid planning myth 2: Giving away the house is the best solution
Another common belief is that you should just give your house to your kids to protect it from Medicaid. This may sound simple but, this can actually cause big problems, especially with taxes. When you gift your house, it can result in huge capital gains taxes for your children. Plus, if you make the transfer within five years of applying for Medicaid, it can trigger penalties and delay your eligibility. It’s better to look into other asset protection strategies with a professional so that your family isn’t unnecessarily burdened with tax bills, and your legacy stays intact.
Medicaid planning myth 3: I’ll just let my children take care of me
Some people plan on relying entirely on their kids for their long-term care. This can place a massive burden on your family. Moreover, in Colorado, there’s no law that requires your children to support you financially so if they do not want to, they don’t have to. Planning for professional care ensures you get the help you need without putting undue stress on your loved ones.
Medicaid planning myth 4: I won’t ever need care
It’s easy to think you’ll be the lucky one who never needs long-term care, especially with an added complication like dementia. But the reality is, many of us will face these challenges. Planning for potential health issues, including cognitive decline, is vitally important. This is because nursing home care, and particularly memory care for those with dementia, is very expensive in Colorado. Nursing home care can cost $7,000-$12,000 per month. Proper planning means you’re prepared for anything, helping to maintain your quality of life and financial security.
Medicaid planning myth 5: I’ll have enough money to pay myself
A lot of people are reluctant to take a serious look at their finances and potential longevity. They assume their savings will cover any future care needs. But long-term care is expensive and can quickly drain your resources, even if you’ve saved well your whole life. Medicaid planning allows you to realistically assess your financial situation and come up with a plan to cover care expenses without running out of money.
Medicaid planning can be tricky, but not having mistaken beliefs is a good start. By understanding the realities, you can make better decisions for your future. Talking to an elder law attorney can give you the guidance you need to navigate Medicaid planning with confidence. This way, you can ensure that you and your loved ones are well-prepared for whatever comes your way, and you can have peace of mind that your legacy is protected.
If you have any questions or would like to discuss your circumstances, please call us on 720 457 4573 or email at info@rockymtnelderlaw.com.
