If there is a chance that you may need end-of-life or long-term care, Medicaid planning should be on your to-do list. To be most effective, you should put Medicaid planning, including an appropriate trust, into motion at least five years before you will need to live in a nursing home. However, even at the last minute, so-called “crisis” Medicaid planning can help shelter at least part of the individual’s assets from being lost to the expense of nursing home care.
Unfortunately, too many people are not able to qualify for Medicaid to assist in paying for resident nursing facilities due to the assets in their possession. The gap between the assets you can possess and the cost of such nursing homes is too large to be overcome without appropriate planning.
What is a Medicaid Planning Trust?
A Medicaid Planning Trust is an irrevocable trust that changes ownership of assets from you to the trust itself, which then passes on to a beneficiary upon your death. Because the trust cannot be changed, altered, or abolished in any way once formed, Medicaid planning trusts are not included in asset calculations for Medicaid qualification in New Mexico.
It is important to understand that there are other types of irrevocable trusts that can be excluded from Medicaid asset calculations, and a Medicaid planning trust may not be right for you. However, revocable living trusts and some trusts termed “irrevocable” are considered as assets by Medicaid regardless. Our experienced estate attorneys can help you make the right choice for your unique circumstances.
Like other states, New Mexico has an asset limit of $2,000 for an individual to qualify for Medicaid, making these trusts invaluable to the families left behind. There are also monthly income limits, but they are complicated and dependent on several factors. Our New Mexico Medicaid planning attorneys can help you determine what you need to do to qualify.
Medicaid Planning Protects Your Assets for Your Family
Not only does a Medicaid planning trust help you become eligible for the financial assistance you need to maintain life in a nursing home, it also protects those assets for your family’s future. The beneficiary of the trust must be someone other than the person who establishes the trust for the assets to be excluded in Medicaid eligibility calculations.
For these types of trusts, you can name anyone you like as the beneficiary, including your children and grandchildren. The trustee must not be able to have access to any of the funds themselves, and you should designate someone you can trust to carry out your wishes appropriately. This means that, although the assets are tied up until your passing, your beneficiaries will receive the funds instead of the state or the nursing home.
Long Term Care Costs
Long-term care costs in New Mexico, like many other states, can pose a significant financial challenge for individuals and families. The expenses associated with nursing homes, assisted living facilities, and in-home care can add up quickly, potentially impacting one’s savings and assets. The average cost of long-term care services in New Mexico varies depending on the type and level of care required, but it often exceeds the national average. It’s crucial for individuals to consider how they will address these expenses in their retirement and estate planning. Exploring options such as long-term care insurance, Medicaid eligibility, and estate planning strategies can help New Mexicans navigate the potential financial burden of long-term care and ensure they receive the necessary care and support in their later years. There are several factors can determine the cost of long-term care in New Mexico such as:
- Type of Care Facility: The type of care facility you choose has a significant impact on the cost. Nursing homes, for example, tend to be more expensive than assisted living facilities or in-home care services.
- Location: The cost of long-term care can vary greatly depending on where you live within New Mexico. Urban areas generally have higher costs than rural areas.
- Level of Care: The level of care required, such as skilled nursing care or basic assistance with daily activities, affects the cost. More intensive care typically comes with a higher price tag.
- Facility Amenities: Facilities with upscale amenities and private rooms often charge more than those with basic accommodations.
- Duration of Care: The length of time you or your loved one will need care is a significant factor. Long-term care costs can accumulate over several years, so it’s essential to plan for the long term.
- Health Condition: The specific health needs and medical conditions of the individual requiring care can impact costs. Individuals with complex medical needs may require specialized care, which can be more expensive.
- Payment Method: How you plan to pay for long-term care also matters. If you have long-term care insurance or qualify for Medicaid benefits, your out-of-pocket costs may be lower.
- Inflation: Over time, the cost of long-term care tends to rise due to inflation. It’s crucial to factor in potential future cost increases when planning for long-term care needs.
- Caregiver’s Experience and Training: If you choose in-home care, the experience and qualifications of the caregivers can affect the cost. Highly skilled or specialized caregivers may charge more.
- Room Type: In residential care settings like assisted living facilities, the type of room chosen (private or shared) can impact costs.
- Understanding these factors and considering them in your long-term care planning is essential for making informed decisions and ensuring that you or your loved ones can receive the necessary care without encountering excessive financial strain.
New Mexico Estate Planning Attorneys for Medicaid Planning
In addition to Medicaid planning, there are other issues that you should be prepared for as you get closer to needing long-term nursing care. Medicaid planning in general is something that most people don’t think about until they need it, and that is a mistake. Take action now so that you know you are prepared when the time comes. Contact our experienced Albuquerque estate planning attorneys for assistance in these and other financial goals for your family’s future.
