Estate planning, when done correctly, should be comprehensive in nature. As such, your estate plan should cover several inter-related goals and objectives all in one cohesive plan. One estate planning component you will likely want to consider as you get older is Medicaid planning. One reason you may need to include Medicaid planning in your estate plan is because eligibility for benefits depends, in part, on the value of your “countable resources.” To help you better understand, the Grand Forks Medicaid planning lawyers at German Law explain what assets are exempt for Medicaid eligibility for seniors in North Dakota.
Why Would I Need Medicaid?
If you have never relied on Medicaid, you are undoubtedly wondering why you would need to plan for the need to qualify for Medicaid in the future. The need for Medicaid may arise from the need for long-term care (LTC) at some point during your later years. The average cost of LTC in 2021 was over $100,000 a year nationwide. North Dakota residents paid considerably more, on average, at over $150,000 per year for LTC. Although Medicare will likely cover most of your healthcare costs as a senior, it will not pay for LTC nor will most basic health insurance plans unless you purchased a separate LTC plan. Because Medicaid does cover LTC expenses, over half of all seniors needing LTC turn to Medicaid for help with the cost of that care.
Qualifying for Medicaid
If you do need to qualify for Medicaid because of the need for LTC, you could face some obstacles if you failed to contemplate the need to qualify ahead of time. Medicaid is a “needs based” program, meaning that an applicant must demonstrate a need for the benefits to qualify. Consequently, Medicaid imposes both an income and an asset, or “countable resources,” limit on applicants. As a senior on a fixed income, you may not have a problem with the income limit; however, the countable resources limit might pose a problem if you did not plan ahead given the fact that the limit is only $3,000 for an individual.
For Medicaid qualification purposes, “countable resources” refers to assets that are not exempt from being included when determining if you are over the asset limit. Because Medicaid is administered by each individual state, the list of exempt assets will vary from one state to the next. In the State of North Dakota, the following assets are exempt from the countable resources calculations:
- One home is exempt (equity limit $636,000 as of 2022) if planning to return, a spouse, a child under 21, or a disabled person resides in it. Whenever an institutionalized person sells a previously exempted residence, the money from the sale becomes a countable asset. The recipient may then lose eligibility for Medicaid until he/she has spent down the money and their countable resources are once again less than the maximum. The home may also be transferred to a sibling who has lived in the home during the preceding year or who holds equity interest in the home; or to a child who has provided care giving services and lived in the home for at least two years, thus preventing the applicant from entering a nursing home environment.
- One car, no equity amount specified. If two or more cars are owned then the most valuable car is exempt.
- An irrevocable funeral trust with a value of $1,500 or less. Revocable burial contracts are considered countable assets, but if the applicant does not have an existing irrevocable burial contract he/she may put up to $1,500 towards one.
- Self-employment property (including tools, equipment and livestock).
- Non-saleable property, household furnishings, furniture, clothing, jewelry, and other personal effects are not counted.
- Indian trust and restricted lands and per capita and judgment funds.
Contact Grand Forks Medicaid Planning Lawyers
For additional information, please join us for one of our upcoming FREE seminars. If you have additional question or concerns regarding Medicaid planning, contact the experienced Grand Forks Medicaid planning lawyers at German Law by calling 701-738-0060 to schedule an appointment.
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