Your careful planning can make for a smooth transition from your parents paying their care costs to using Medicaid. Medicaid begins paying long term care costs when your parent has "spent down" his own money to the Medicaid asset caps.
It can be hard to face that money is running out. Caregiving is so time consuming that families can feel that they are too busy to be strategic in the Medicaid process.
Five critical financial tasks when qualifying for Medicaid
- Create a budget and monitor the rate that your parent's funds are being spent.
- Build alternative budgets that reflect possible changes in your parent's elder care needs.
- Find a trustworthy Medicaid advisor who can guide you and your parent through preserving their estate.
- If your parent needs long term care in a facility, set aside funds for admission to a Medicaid nursing home as a private pay patient.
- Well before it's time to apply for Medicaid, get an application and being gathering all the paperwork that will be needed later.
Not everyone knows that you can or should plan your transition to Medicaid. The elder law attorney of one of my clients told her "come back when your mom's money has been spent down to $2000 and we'll file the paperwork." Luckily my client did not follow her attorney's advice.
Not being strategic puts you and your parent in limbo when your parent is out of money and yet all the paperwork for Medicaid services has not yet come through. I watched as another client incurred a large debt for home care while searching for an acceptable Medicaid qualified nursing home for her mother. Almost all the nursing homes we contacted had waiting lists.
Once your parent needs long term care, start planning for a possible day when your parent will need Medicaid. On your own or with the help of your parent's financial advisor, draw up a budget that reflects your parent's current expenses. Create other scenarios for your parent including increased home care services, living in a senior care community and living in a nursing home. How long will your parent's funds last before they spend down to the Medicaid limits?
If your parent wants to preserve part of his estate for his heirs, you'll need to work with an advisor. They can guide you through appropriate ways to shield your parent's assets during the process of qualifying for Medicaid and from asset recovery after their death.
Unless your parent is already of very limited means, you should seek some expert advice well before the time that their senior care needs use up all their money. Being strategic can mean a smooth transition to Medicaid services.
Have you helped your parent transition to Medicaid? Share your experiences with us.
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