SPONSORED: Plan For The Future: Don't Go Broke In A Nursing Home
No matter your financial situation, the cost of nursing home care can devastate a family’s resources. Many families believe they must pay out-of-pocket for nursing home care until they have liquidated all their assets to qualify for Medicaid. Others believe they cannot qualify if they have given away assets within the last five years.
But you don’t have to go broke in a nursing home. Although it’s best to plan your estate before you need care, it’s never too late to preserve assets.
There are several strategies to help families avoid liquidating assets to pay the cost of nursing home care. The best method is to reposition assets into a Medicaid Asset Protection Trust at least five years before needing care, allowing the care recipient to control the trust assets.
The Medicaid recipient can serve as a trustee or appoint and replace a trustee at any time. The recipient can retain all the income from the trust and change who inherits the assets from the trust at their death. At a minimum, the most important asset to place into the trust is the family home. The trust will protect the home from being liquidated at death to pay the state back for any money paid to the nursing home by Medicaid. This is commonly referred to as estate recovery and allows Medicaid to recoup all the money it paid to the nursing home when the recipient passes away.
A properly funded Medicaid Asset Protection Trust will help you avoid losing the family home to the state. Should the family need to sell the home during the recipient’s lifetime, the Medicaid Asset Protection Trust will protect the proceeds from the sale from counting as a resource to disqualify the recipient from Medicaid. The proceeds in the trust can be used by the family to help support the recipient while also receiving Medicaid.
If you find yourself or a loved one needing nursing home care now, and you haven’t established a Medicaid trust, it’s not too late to save money and still qualify for assistance. If the care recipient is married, the family can preserve up to 100% of its assets. If the recipient is single, the family can preserve at least 50% of its assets in most cases. Either way, there are opportunities to save money. More importantly, the family home never has to be sold to pay for care.
The strategy to preserve a married couple’s estate is to transfer the family resources into the name of the well spouse. However, this method requires that at least 50% of the couple’s estate be in liquid form, not real estate. Non-liquid or real estate assets — excluding the family home — may need to be sold first. The transfer of assets into the well spouse’s name is accomplished by purchasing a Medicaid-compliant income annuity made payable to the well spouse with the family’s liquid assets. This can protect all of a couple’s assets while still qualifying the sick spouse for Medicaid. The well spouse retains 100% control of the family resources. More importantly, Medicaid coverage can be established immediately without a waiting period.
For a single person, saving money is slightly different. Medicaid allows the person to make gifts to the family, speeding up Medicaid eligibility. In most cases, the person can preserve as much as 50% or more of their assets by giving them to the family for safekeeping. The remaining 50% is placed into a Medicaid-compliant income annuity to pay for the person’s care until Medicaid begins. A family gifting strategy can speed up eligibility to qualify for Medicaid in half the time it would take to qualify otherwise. The result is a single person can preserve at least half of their money with family and still qualify for Medicaid. Here again, you don’t have to spend all your money to get Medicaid. You just need an experienced elder law attorney to show you how.
Another little-known strategy is the ability to protect 100% of a married couple’s assets upon the death of the first spouse. If each spouse sets up a testamentary discretionary trust to be funded at the time of the first spouse’s death, 100% of the family assets can be placed into the trust for the surviving spouse, protecting all the assets from being counted as a resource for Medicaid in the future. This allows the surviving spouse to immediately qualify for Medicaid in the future. In addition, the survivor’s trust is fully protected from lawsuits and judgment creditors.
The key to protecting assets is having a plan. To learn more about how these and other strategies can protect your family’s assets from liquidation to pay the high cost of long-term care, please call or email the Jurist Law Group for a no-risk consultation.
