When you think about your retirement and plan for your golden years, you likely envision yourself being healthy and active until your very last days. While that may be an admirable wish, it is far from the reality experienced by many aging adults in Michigan and across the United States.
You may eventually require the daily support of medical professionals for your safety and well-being as you age. Medicaid planning as part of the estate planning process long before you may require benefits is an important step as someone preparing for their retirement in Michigan.
Medicaid benefits may be necessary as you age
As soon as you are old enough to retire, you can potentially receive Medicare benefits. Medicare will cover some of your hospitalization costs and treatment needs. However, the more support you require, the more likely it is that Medicare won’t cover those services.
You may need Medicaid to pay for nursing home expenses, as Medicare will not cover such costs. According to an analysis of 2020 nursing home financial data, Michigan nursing home care costs roughly 16% more than the national average. It will cost, on average, $8.973 per month to stay in a nursing home. Many people can’t cover such massive monthly charges on their own.
Advanced planning is crucial to getting benefits when you need them
If you don’t review your financial circumstances and make some changes years before you apply for Medicaid, you may find yourself ineligible for benefits or subject to a substantial penalty. Any transfers made in the years immediately preceding your application will make the state question claims of hardship. You may have to repay the value of those transfers by covering care costs out of pocket despite lacking the resources to do so.
As if that weren’t compelling enough of a reason to plan for benefits ahead of time, there is also your legacy to consider. Michigan’s Medicaid program will initiate estate recovery efforts and ask your estate to repay every cent of medical care that you received through Medicaid benefits.
Only advance planning and changing the ownership of certain assets can help you protect them from such efforts. Recognizing that you need to address future medical expenses and considering a specialized trust to address those expenses when creating your estate plan will make it easier for you to get Medicaid benefits as you grow older.
There are many different options to consider, and there is no “one-size fits all” estate plan. That is why the attorneys at Gudeman & Associates custom tailor estate plans based on you and your family’s specific needs and circumstances. Contact us today to schedule a free estate planning consultation.