Experienced, Local Attorneys Serving Individuals, Businesses And Families With Distinction

Protecting your assets from long-term care costs

On Behalf of | May 8, 2023 | Estate Planning, Trusts

Protecting assets from long-term care costs is essential to estate planning. In Arkansas, long-term care can be quite expensive, with nursing home daily costs averaging around $220.

Medicaid can be an option for covering these costs, but it has strict eligibility rules and may require you to deplete your assets before qualifying. Luckily, estate planning strategies, such as Medicaid trusts or annuities, can help protect your assets while qualifying for Medicaid.

Medicaid rules in Arkansas

Medicaid provides healthcare coverage to low-income individuals funded by the federal and state government, including those who require long-term care. In Arkansas, Medicaid has strict asset and income eligibility requirements.

To qualify for Medicaid, an individual must have less than $2,000 in assets, with some exceptions. Additionally, Medicaid has a five-year lookback period that penalizes individuals who have transferred assets in the five years preceding their Medicaid application.

Protecting your assets from long-term care costs

Establishing a Medicaid trust is one strategy for protecting your assets while qualifying for Medicaid. A Medicaid trust allows you to transfer ownership of your assets to a trust to shield them from Medicaid’s asset and income eligibility requirements. This type of trust can be irrevocable, meaning you cannot make changes once you’ve established it, or revocable, meaning you can change it as needed.

Protecting your assets with Medicaid annuities

A Medicaid annuity is an annuity purchased with assets that you intend to qualify for Medicaid. It works by converting your countable assets into an income stream, which the law won’t count against Medicaid’s asset and income eligibility requirements. Medicaid annuities can be valuable for protecting assets, but they must be established correctly and follow Arkansas laws and regulations.

It’s important to note that both Medicaid trusts and annuities have complex rules and regulations in Arkansas. It would be wise to contact an attorney who can guide you through the process. Additionally, it would be best if you implemented these strategies well before needing long-term care.

Long-term care can be expensive in Arkansas, but by planning and protecting your assets, you can have peace of mind if you know that you have covered your long-term care needs without depleting your life savings.

Archives

Categories