Anyone who has looked into financial assistance for nursing home residency from Medicare and Medicaid knows that there are serious complications in the process. Far too many people over the years have been surprised to learn that they can’t leave the financial gifts for their families as intended while still receiving Medicare and Medicaid benefits.

Although it is possible to leave a decent financial legacy for their families and receive federal and state assistance for nursing home costs, it is not a simple process. Read on to learn a little more about obtaining assistance and the financial dangers involved.

What is Medicaid Look-Back and Spend-Down?

Medicaid assistance is not available for everyone; it is limited to those who have lower income levels. When applying for Medicaid assistance, there is a five-year “look-back” period. If you have made any gifts over the past five-years, they can be counted against your overall eligibility for financial assistance.

Another aspect of this income limitation is the “spend-down,” a procedure by which you can spend enough of your assets to be eligible for assistance.

What Can You Do?

Obviously, penalties for gifting and a forced liquidation of your assets are not ideal if you intend to leave some kind of financial legacy for your family. There are a few things you can do to minimize the damage of the current system while still realizing your estate planning goals:

  • Work with experienced lawyers: Medicare and Medicaid are extremely complicated, requiring knowledge and experience from your legal counsel. Make sure you work with an attorney who has handled these issues before.
  • Get started as soon as possible: Too many people wait until the last minute, only to discover that the last minute is actually too late. If you can start working with an attorney more than five years before you think you might apply for public benefits, you will be in a much better position to maximize your estate planning potential.
  • Don’t do anything impulsive: Even the simplest gifts to children and grandchildren or impulsive purchases could have consequences you don’t foresee. Make sure you understand the potential consequences before committing to anything financially.

Although there are numerous online do-it-yourself estate planning options available, none of them can give you the protection and insights you can get from an experienced, dedicated lawyer.

As you are considering your estate planning and late-life care options, make sure you seek the counsel of an honest attorney you can trust to help you protect your financial interests throughout the process.