The need for long-term health care because of illness may require the patient to give up his or her home, savings and other property. But with proper planning, these assets can be legally given to family members. The time to start planning is well before the need arises.

Two programs that bear on this problem: The government has Medicare and Medicaid. Medicare provides benefits to anyone who is ill and needs medical care to get better. But, if the patent suffers from a long-term medical condition that will not improve, as for example, Alzheimer’s Disease, Medicare does not cover care. A patient who doesn’t have the money to pay for the needed care or runs out of money can apply for coverage under Medicaid.

Medicaid provides benefits for long-term care, - in a nursing home for instance, but to qualify the applicant must be virtually without assets. Without proper planning for applicant may have to turn over most of his or her assets to Medicaid.

When the need arises to receive benefits under Medicaid, the patient cannot simply transfer his or her home and assets to family members. If the patient does, he or she may not be able to qualify for benefits under Medicaid for up to three years. In addition, the transfer of assets without proper planning would most likely create a large tax bill when those assets are eventually sold.

When the patient applies for Medicaid benefits for care at home, the “look-back period”, that is the amount of time that Medicaid takes transfers of assets under consideration, is thirty days. However, if the patient needs care at a nursing home, the “look-back” period is three years and, even five years under some circumstances.

If Medicaid finds that a transfer has violated its rules, the applicant is disqualified from receiving benefits. The precise amount of time of disqualification depends on several factors, including the value of the assets that were transferred, the method of transfer and the average cost of nursing home care in the area.

If you are in your 40’s or 50’s, the option of purchasing long-term health insurance should be examined. Long-term health care insurance pays for long- term care either at home or at a nursing home. Be aware, however, that this type of insurance may not pay for all expenses and often pays only for a limited amount of time. Accordingly, even if you have long-term health care insurance, Medicaid planning may still be necessary.

Medicaid planning should begin by the time you have reached your 60th birthday, or sooner if you are in poor health or due to your family’s medical history. Protecting your assets and obtaining necessary health care later in life is complicated and needs to be carefully planned with the help of a law firm that is knowledgeable with this fast-evolving area of law