Someone who is putting together an estate plan in New York has to think about what they want to leave for their loved ones when they die and also what needs they will have as they continue to age. An estate plan can address incapacity and future medical expenses in addition to outlining someone’s funeral plans and legacy wishes. Those who plan with an eye on their comfort in their golden years can better protect their interests and improve the chances of loved ones receiving an inheritance.
Future medical expenses can play a major role in how someone structures their estate plan and what kind of documents they require. Long-term care costs, especially the charges for a long stay in a nursing home, can add up to thousands of dollars each month. Those costs can chew through someone’s retirement savings and leave their estate at risk of collection activity or estate recovery efforts.
How medical debts affect an estate
Hospitals and other care providers that offer support services immediately before someone’s passing can bring a claim against the estate when an individual dies. Any medical bills, including nursing home costs, will generally take priority over someone’s desire to pass certain assets to family members. If someone avoids medical debt by applying for Medicaid benefits for their long-term care costs, the New York Medicaid program will engage in estate recovery efforts after they die. It is typical to make a claim for the full amount of the benefits provided, and the estate will need to pay that debt before distributing assets to anyone else.
How people plan for care
There are several different ways that people can address future medical needs and long-term care costs. Often, people put plans in place by creating trusts or changing how they hold ownership of major assets so that they can both quickly qualify for Medicaid should they require such support. Those same steps can also protect those resources from collection or estate recovery efforts later.
The best approach will depend on someone’s financial resources, legacy wishes and current health. Ensuring that an estate plan accounts for medical expenses and long-term care needs can help people to better utilize the resources available to them and leave a lasting positive impact on the people they care for the most.
