Frequently Asked Questions
Understanding Medicaid and Estate Planning
We’ve gathered our most frequently asked questions for your convenience. Browse through them, and feel free to reach out if you have any additional inquiries.
What is a Medicaid Crisis?
Medicaid crisis planning involves taking immediate steps to qualify an individual for Medicaid benefits while preserving as many assets as possible.
When an individual suddenly requires long-term care in a skilled nursing home, it is often referred to as a “Medicaid Crisis” – since such care is very expensive. With the proper steps, most everyone can become eligible for Medicaid.
When should I start Medicaid Crisis planning?
When you or a loved one starts needing skilled care, the ideal time to prepare for a Medicaid crisis was yesterday.
It’s best to start Medicaid crisis planning as soon as a need for long-term care is anticipated, but it can be initiated at any time, even after a health crisis occurs. The sooner your family begins Medicaid planning, the better prepared your family will be if a health crisis should come.
How does the Medicaid look-back period affect my assets?
Pennsylvania imposes a five (5) year “look-back” period, in which all transactions are scrutinized for gifting. If a Medicaid applicant gifts money during this period, this may result in a penalty period representing the number of days the gift could have paid for skilled nursing care.
What is a Medicaid spend-down?
To become eligible for Medicaid benefits, an applicant must meet income and asset limits. A Medicaid spend-down is the process of reducing an applicant’s total countable assets to meet these limits. This may involve paying off debt, making home improvements, or purchasing other exempt assets.
What is estate administration?
Estate administration is the process of managing and distributing a deceased person’s assets according to their will or state law if there is no will. This includes paying debts, taxes, and distributing the remaining assets to beneficiaries.
Who is responsible for estate administration?
The executor named in the will is responsible for estate administration. If there is no will, the court will appoint an administrator to handle these duties.
What is estate planning?
Estate planning involves creating legal documents and strategies to manage your assets and distribute them according to your wishes after your death. This can include wills, trusts, powers of attorney, and healthcare directives.
Why is estate planning important?
Estate planning ensures that your assets are distributed according to your wishes, minimizes taxes, avoids probate, and provides clear instructions for your care if you become incapacitated. It helps protect your loved ones from legal and financial complications.