MEDICAID CRISIS PLANNING VERSUS MEDICAID PRE-PLANNING
Medicaid crisis planning and pre-planning are two very different creatures. Medicaid crisis planning is defined as the imminent or immediate need for long-term care services and a need to establish eligibility to avoid paying full cost for those services. With crisis planning, it is important to point out that one cannot take advantage of the five-year look back period for divestments. There are also fewer choices when medicaid planning is in crisis mode.
Medicaid pre-planning is planning in advance for the eventual need for long-term care services. Specifically, it is re-positioning assets and making intentional choices that will limit the overall exposure of assets and income to the costs of long-term care sometime in the future. An example of this includes divesting funds into a trust. With pre-planning, an individual has a larger selection of alternative planning options and it is less urgent to make large transfer moves. The ultimate goal is to preserve as many planning choices as possible.