Like many areas of the law, estate planning is often misunderstood – and it is no surprise. Most people do not address estate planning or long-term care risk until they face a crisis, meaning that they enter a challenging time armed with misconceptions instead of facts. Let us clarify the most prevalent estate planning myths.

Myth: The look back period for Medicaid is being extended.

False. The Medicaid lookback period is five years and there are no plans to change that to seven years.

Medicaid is one of the only programs that will cover personal care homes, certain assisted living, nursing home, and other extended care at home. Medicaid as a program is resource-restricted, meaning that when you or your loved one applies for Medicaid, the government “looks back” five years from the date of application into the past to consider eligibility. The goal is to prevent individuals who would not normally be able to access Medicaid from qualifying for government assistance.

The lookback period is five years and there are no current plans to change that.

Myth: Dying without a will means the state takes your assets.

False. Dying without a will—known as dying intestate—does not mean the state will seize your assets.

What it does mean is that Pennsylvania law will govern how your assets are distributed, which may not reflect your wishes. For example, if you are married with children only of that marriage, your spouse does not automatically inherit everything that is in your name alone on the date of your death. Under PA law, your spouse inherits the first $30,000.00 of probate assets and then half of the remaining probate assets, with the other half being divided equally between your surviving children. If that is not what you want to happen, you need a will.

We recommend first drafting a will when you start a family or buy a house and updating it during different major life milestones.

Myth: Medicare covers long-term nursing home costs.

False. Medicare provides limited coverage for some short-term nursing care but does not cover long-term care in nursing homes.

The cost of a nursing home is astronomical with the average cost in PA being more than $135,000.00 per year. To pay for nursing home care, it is best to investigate options such as Medicaid, long-term care insurance, or Veterans Aid & Attendance. Relying solely on Medicare is not enough.

Myth: If I have a power of attorney, I do not need a will.

False. A power of attorney and a will are not the same thing.

A power of attorney allows you to select an individual to make decisions on your behalf if you become incapacitated. Your appointed agent can make decisions around your finances or healthcare, but it does not extend past death.

After death, your Will is the governing document, and your named executor is responsible for administering your estate. Take some time to educate yourself about the differences between the two estate planning documents.

Navigating the Facts

Armed with correct information, you can effectively plan and protect your family. If you are still unsure about the ins and outs of estate planning, contact us at Marshall, Parker & Weber to set up an appointment so you can face your future with confidence.