Most of us will need long-term care as we age. Affording it becomes the real challenge. For many individuals, Medicaid benefits are the only way to cover these expenses. But you can only qualify if your income and assets fall beneath a certain threshold. So, what do you do? Get help from an estate planning attorney from Pennington Law, PLLC as soon as possible.
In Arizona, paying for nursing homes or in-home care costs individuals thousands of dollars each year. The long-term care insurance company Genworth recently reported that a private room in an Arizona nursing home can cost over $8,000 per month. Home health services were cheaper but still a staggering investment, costing Arizona residents around $5,400 monthly.
The price tag is intimidating but not impossible to manage. An experienced attorney can use various estate planning tools to meet financial eligibility requirements for Arizona Medicaid.
You don’t have to wait until you’re a senior to make long-term care preparations. Contact Pennington Law Firm, PLLC for a free consultation with a dedicated estate planning lawyer.
Understanding Medicaid in Arizona
The Arizona Long-Term Care System (ALTCS) is the Arizona Medicaid program that provides long-term care services to eligible residents at little to no cost. To qualify, you must
- Need a nursing home level of care (determined by the Arizona Health Care Cost Containment System (AHCCCS)
- Have a Social Security Number or be a qualifying immigrant
- Be an Arizona resident
- Apply for all cash benefits you may be entitled to (e.g., pension, Veterans Benefits, Social Security)
- Live in an approved living arrangement, such as at home, in assisted living, or a nursing home
- Meet Medicaid’s income and asset limit tests
Medicaid services are not only for older people. However, the applicant pool is limited. Applicants must be
- Individuals over 65
- Low-income adults
- Pregnant women
- Disabled adults
How Can Estate Planning Help Me Secure Long-Term Care?
Estate planning can help you prepare for long-term care by structuring your assets to meet Medicaid’s resource tests. An attorney can use various tools, such as asset transfers and trusts, so that you fall within Medicaid limits without depleting your wealth.
A lawyer can also investigate other options for long-term care, such as long-term care insurance. This coverage can cover all or a portion of your long-term care if you are ineligible for ALTCS. But it’s not a valid option for everyone. You could be denied, depending on your age or a pre-existing condition. In addition, premiums on long-term care policies can be high, making them an unaffordable choice. An estate planning lawyer from Pennington Law, PLLC can advise on whether long-term care insurance makes sense for you.
Navigating Arizona Medicaid Eligibility Requirements
Qualifying for Medicaid means evaluating your resources to identify which ones count toward Medicaid limits and which do not.
Non-countable resources include:
- Your primary residence
- One car
- Burial plots and irrevocable prepaid burial plans
- Household and personal belongings
- Financial accounts provided for under federal law, such as Flexible Spending Accounts (FSA), ABLE, and 530 Cordell Education Savings Accounts
Countable assets may include:
- Checking, savings, and credit union accounts
- Property you own but don’t live in, such as a vacation home
- Additional vehicles you own
- Cash, stocks, and bonds
- Retirement accounts, such as 401(k) and IRA
- Revocable prepaid funeral plans
- Cash value of some life insurance policies
If you are married, you may be able to set aside some funds for their use so you qualify for ALTCS benefits. That’s only possible if your spouse is healthy. But if Arizona Medicaid determines you have too many resources, you must reconsider your financial situation and investigate your options before applying again.
Medicaid Planning Strategies
Asset transfers and trusts are two of the most common strategies estate planning lawyers use for Medicaid planning. Asset transfers involve moving your property to no longer be a countable resource by Medicaid standards. However, you must arrange your transfers carefully.
When you apply for ALTCS, the state reviews your application to evaluate whether you made any asset transfers solely to qualify for Medicaid benefits. Arizona uses a five-year “lookback rule” to scrutinize any transfers made before the month before your application. If it determines you made a non-exempt transfer, you may incur a penalty that makes you ineligible for long-term care for a set period. You must pay for those services privately until the penalty period expires. An attorney can help you avoid this setback with strategic estate planning.
Another option is a Medicaid asset protection trust (MAPT). A MAPT is an irrevocable trust, meaning you no longer control the assets once you place them in the trust. You cannot reclaim them, either. This converts your assets into non-countable resources for Medicaid purposes, helping you qualify for ALTCS benefits. However, the five-year lookback period still applies to MAPT trusts, so it’s essential to plan ahead so that long-term care coverage is available when you need it.
Another possibility for individuals whose resources exceed Medicaid limits in Arizona is an income-only Trust, also known as a Miller Trust. With an income-only trust, an individual can redirect all or a portion of their income to be directly deposited into a trust account. Once the trust is created, ALTCS sees the funds as belonging to the trust, not the individual.
Medicaid annuities and spend-down strategies are other options to help qualify for long-term care in Arizona, but your options depend on your personal circumstances. Getting help from an attorney can identify the best strategy to meet your needs and goals.
Contact Our Arizona Estate Planning Attorneys Today
Pennington Law, PLLC is a premier estate planning law firm serving clients in Surprise, Sun City West, Buckeye, Peoria, and the Outer Phoenix area. If you need help with long-term care planning, our attorneys can review your situation and make customized recommendations. Call or contact us today to know more about long-term care planning sun city & for a free consultation.