Adults preparing for retirement often take certain specific steps to better ensure their safety and comfort. They make changes to their homes so that they can live in their own houses comfortably later in life. They rework their budgets to better manage their costs on a fixed income. They put together estate plans for their protection and the protection of their loved ones when they die.
In addition to creating or updating a will to distribute their property among their beneficiaries, elder adults preparing for retirement may also want to explore the need for long-term care as they age. People may eventually need a nurse to visit their homes regularly or to move to a long-term care facility. As such, planning early in the retirement process for the possibility of future medical support needs can be a smart decision.
Advance planning can help people get key benefits
Medicare is the insurance program that supports older adults after they reach retirement age. Those who qualify for Medicare benefits can receive coverage for basic medical support needs. However, when people require long-term care, Medicare is not particularly helpful. Medicare limits benefits for rehabilitative support and long-term care facilities. Older adults may eventually need Medicaid to help them cover certain expenses.
Unlike Medicare, which is available based on someone’s employment history, Medicaid is only available to those who meet certain strict financial requirements. When someone applies for benefits, Medicaid looks back at five years of financial activity. Any substantial transfers or gifts in the years before someone’s Medicaid application could leave them ineligible for benefits or result in a financial penalty.
Medicaid also endangers someone’s legacy. Certain assets, including someone’s primary residence, could be at risk of liquidation to repay benefits after a Medicaid beneficiary dies. The sooner someone makes strategic moves with their resources, the less likely they are to be at risk of a penalty. Changing the ownership of major assets, creating a trust and gifting resources to family members are all ways for people to plan in advance for long-term care costs.
Thinking about the various challenges that may arise later in life can help people put together better estate plans that address elder law concerns. Long-term care planning is an often overlooked element of estate planning that can give people greater peace of mind as they age.
