A comprehensive approach to estate planning often includes Medicaid planning. When planning for a time when one needs long-term health care, Medicaid planning can help pave the road to coverage. However, what happens if a person is disqualified because their income is too high to meet Medicaid requirements?
Medicaid planning may be as simple as collecting and preparing documents, or it may require an overhaul of personal finances to qualify. Not all states allow excess income to be converted into non-countable assets. Luckily, Colorado is one of 25 states that allows for “Qualified income trusts,” also known as “Miller trusts,” to meet Medicaid’s income requirements.
What is a Miller trust?
Medicaid long-term care eligibility can be obtained even when someone’s income is over the limit by using a Miller trust. Income beyond Medicaid’s limits can be placed in a Miller trust, which no longer makes it income. This strategy is a powerful tool for meeting Medicaid’s income requirements even when one makes too much money.
Benefits of Medicaid planning
When ourselves or our loved ones are healthy and active, Medicaid planning can seem like a task for another day. However, preparing for long-term care and Medicaid benefits before they are needed is a proactive way to be prepared. Here are some additional benefits:
- The expense of long-term care is lifted: Having Medicaid guarantees that a person will receive the much-needed care without being a financial burden on family members.
- The healthy spouse’s resources are protected: When one spouse is in long-term care that is paid for by Medicaid, it helps the healthy spouse to have the financial resources to live.
- Assets are protected for one’s heirs: Medicaid planning can help to secure property and assets that can be left to the next generation instead of being used in paying medical bills.
A comprehensive approach to Medicaid planning should be taken to ensure that everything is accounted for.
Applying and being evaluated for Medicaid can be a complicated and time-consuming process. Having professionals by your side can help to make the process much smoother.