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Medicaid planning protects your children, not just you

On Behalf of | Nov 23, 2022 | Medicaid

Most adults preparing for retirement in Indiana realize that Medicare will take care of their basic needs. Although Medicare doesn’t necessarily cover the full cost of prescription medication or certain intensive services, it provides excellent general coverage for those past retirement age.

While you may hope that Medicare will meet all of your needs indefinitely, there is no guarantee. You may end up breaking your hip and need to spend six months at a rehabilitation facility later in life. You might also get diagnosed with Alzheimer’s disease and need to move into a nursing home.

Such services are not eligible for Medicare coverage and will require Medicaid benefits unless you can pay out of pocket. Advance planning is crucial not only for your own protection but for that of your children.

Why planning is necessary

The Medicaid program in Indiana is only available to those with limited personal assets and income. You need to plan ahead to change how you hold certain property or reduce the value of your personal assets so that you can qualify when you need benefits. Otherwise, you may be subject to a penalty that could create significant financial strain.

There is one asset that won’t prevent you from getting benefits. You can still qualify when you own a home regardless of how much it is worth, but that is where the risk for your children comes from, at least after your death. The chances are good that you would like to pass your home to the next generation when you die or at least sell the home so they can have the money that it is worth.

If you don’t plan ahead to qualify for Medicaid when the time comes, your home could be vulnerable to estate recovery efforts after you die. Medicaid can bring a claim in probate court to recover every cent ever paid on your behalf. The rights of your loved ones to inherit from your estate do not supersede the right of the estate recovery program to make a debt-related claim. The courts might even order the liquidation or sale of your home, leaving you with nothing to pass on to your children when you die.

When you take the time to plan so that you can qualify for Medicaid, you don’t have to worry about if you can get benefits when you need them. You also don’t have to worry about the state of Indiana when claim to your most valuable property after your death. Understanding the benefits that you derived from Medicaid planning could inspire you to think more carefully about your future.