You are getting older and know that your estate plan is one way to help protect your interests. Something that you may be looking into obtaining in the future is Medicaid, but do you know what it takes to qualify for Medicaid and how to protect your assets from an unnecessary spend-down?
When you apply for Medicaid, all assets that fall within a look-back period will be reviewed. If those assets add up to more than the limit for Medicaid, then the value of those assets in your estate may need to be spent before you will be able to obtain Medicaid.
How does this look-back time period work for people in Colorado?
Medicaid’s look-back period is five years (60 months) in 49 states and Washington, D.C. California is the exception. There, the look-back period is shorter at just 30 months.
Here’s how the look-back period works. Imagine that you apply for Medicaid today and last transferred a gift of $10,000 to your beneficiary only 24 months ago. That transfer will be included in the total value of your estate.
In Colorado, you have to meet the income limit of $2,523 a month to qualify for Medicaid if you will go into nursing home care or use home and community based services. For those who have a disability or who are legally blind, the limit is $841 a month. Additionally, there is an asset limit of $2,000. If you are married and only you are applying for Medicaid, you may be able to qualify despite making that gift since your non-applicant spouse may have assets valued at up to $137,400.
Medicaid planning in advance may help you avoid spending down your assets
Medicaid is a difficult subject to discuss in some ways, because there are look-back periods and expectations of not giving away money or assets during a timeframe when a person may not yet have been considering nursing care. It can be frustrating when the asset limit is just out of reach, too.
Fortunately, with good estate planning techniques, it’s possible to minimize the risk of having to spend down your assets to qualify for Medicaid thanks to options to remove items from your estate legally, such as adding them to trusts well in advance of the look-back period.