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Planning for long-term care needs and Medicaid as you age

People don't like to think about growing old or dying. That's why so many adults put off estate planning and end-of-life care preparations. Some individuals who live well into their golden years never require long-term care. Many others are not as lucky. They may require in-house nursing or may need to go live in an assisted living facility, such as a nursing home.

Individuals faced with these care needs are often shocked to learn that Medicare does not cover those expenses. In fact, the cost of in-home nursing or living in a nursing home is incredibly high. It can be thousands of dollars a month, which is difficult to pay when you are on a fixed income after retirement.

Without careful planning, you may end up using all of the assets you acquired during your life to pay for long-term care. However, with Medicaid planning well before you are in need of that level of care, you can reduce your risk of financial losses and improve your chance of getting the attention and coverage you need.

Start planning for long-term care as soon as possible

Addressing future medical needs per the potential for long-term care when you reach retirement age is wise. For young professionals starting out in their careers, it may be possible to obtain long-term care insurance.

These policies typically involve monthly premiums paid for life. Older adults often cannot qualify for this kind of insurance, if they won't pay enough in premiums to offset the liability of potential care needs in the future. If you don't have long-term care insurance, then when you plan to retire, you need to start thinking about covering future medical costs.

Creating a trust is one way to help ensure you can qualify for Medicaid if you need long-term care. Medicaid has a five-year look-back period, which means that any transfer of assets you make within the five years leading up to your application can count against you.

Transferring your home and other significant assets into a trust early on helps ensure that you can qualify for Medicaid without penalties in the future, if necessary.

Medicaid planning helps ensure you leave something behind for your family

Working adults pay taxes into the Medicaid program, just as they pay into Social Security and Medicare. You shouldn't have to bankrupt yourself and spend every cent you ever saved on care.

Instead, you can make careful financial decisions early on that allow you to protect your legacy and leave an inheritance for your family while still ensuring you will have access to the care you need as you age.

If you are nearing retirement age or are already past retirement age and thinking about the future, it may be time to talk to someone about Medicaid planning and whether a trust could benefit your family's finances.

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