Monday, February 3, 2020

Tips for Protecting Your Assets When You Move into a Nursing Home Estate Planning

Gifting beforethe five-year look back period - this is usually done with irrevocable asset protection trusts. She has over 25 years of experience practicing law and is focused exclusively on trust and estate planning, and elder law. She is a past co-chair of the NH Bar Association , a member of the NH Women’s Bar Association and a director of the NH Estate Planning Council. Sarah also serves as a Trustee of the Episcopal Diocese of NH. So it’s important to consult with an attorney or financial advisor before making any large gifts. Finally, you should put together a comprehensive estate plan.

Medicaid provides only the bare essentials but provides little for quality of life. Nursing home Medicaid provides for a shared nursing home room and you are only allowed to keep some $130/m of your income . Assisted living Medicaid may or may not be helpful, providing an estimated $1,300-$1,500/month subsidy for ALF care, although each facility can be a little different. Either way, setting money aside in advance may be helpful for your better care in the future.

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However, in New York, a nursing home costs on average $15,000 – $20,000 per month. In addition, you will likely be required to pay a security deposit equal to the monthly fee. The other factor that has scared some people away from setting up a Medicaid trust is the setup cost. It’s not uncommon for an estate attorney to charge between $3,000 - $8,000 to setup a Medicaid trust. But in the example that we just looked at above with Linda, you are spending $5,000 today to setup a trust, that is going to potentially protect an asset worth $250,000. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

If you do make a Medicaid plan, then you can get Medicaid to cover you right away because the assets that you have protected won’t count when your eligibility for Medicaid is determined. Eghrari Wealth Training Law Firm can assist with creating a customized asset protection plan by working with you to create and fund an asset protection trust. It is no secret that the costs of nursing home care can be astronomical, and they are only rising. This leaves many families wondering how they can protect their assets from being depleted by nursing home costs.

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Many elderly people may not qualify for this insurance or, if they do qualify, may not be able to afford this insurance if they wait too long to acquire it. You know having a last will is important—it protects your family and provides for your final wishes. Now that you're finally sitting down to write that will, be on the lookout for these common but easy-to-avoid mistakes. As a co-owner, your mother will receive her proportional share of either the net rental income or the proceeds of the sale. In terms of income, her share will have to be paid to the nursing home along with your mother's income.

how do you protect your assets from a nursing home

In August 2005 Robert James was admitted to Summit Health Care Facility in Wilkes-Barre, Pennsylvania. He and his wife Josephine filed a resource assessment with the PA Department of Public Welfare that showed that the couple had total available resources of $381,443. After allowing for the community spouse and institutional spouse allowances, the couple had excess resources of $278,343. This meant that Robert was ineligible for Medicaid payments. The costs are crushing; the burdens on our loved ones enormous.

What assets should not go into a trust?

How your assets impact your Medicaid eligibility depends on the state where you reside. They know different strategies to take to protect your assets from being taken when your spouse dies. And if you just want to gather information before you have an attorney, you are on the right page. When your spouse enters into a nursing home, his needs would be catered for. The only money he will be having is his personal allowance which is determined by the state and your joint allowance is also considered.

how do you protect your assets from a nursing home

Emotions like guilt and frustration will be prominent. But you shouldn’t allow it to push you to make some costly mistakes that will make your spouse ineligible for the nursing home or make you homeless after your spouse pass on. In the John and Marian example above, after John’s admission to the nursing home, Marian could spend the $23,000 excess on a new furnace for their home and a new car.

Three Ways to Protect your Assets from Nursing Home Costs

In the case of Medicaid, any assets you transfer within the five years prior to entering a care facility are subject to seizure after your death. Transferring funds before you fall ill shelters your money and ensures your family members can legally keep the gifts they receive. A revocable living trust will not protect your assets from a nursing home. This is because the assets in a revocable trust are still under the control of the owner. Another reason to protect assets is to provide an inheritance to your children. Let's face it - many people would not want to have their entire life savings disappear to the nursing home, leaving no legacy to your children/family.

how do you protect your assets from a nursing home

There is a five-year “look-back” period for asset transfers when you are applying for Medicaid. If, within the five previous years, you have transferred an asset for less than its fair market value, your eligibility for Medicaid benefits could be delayed or denied when you need it most. Nursing home care can be vital to preserving quality of life in a person’s final days or even years, but it can also be expensive. Medicare pays only limited benefits for skilled nursing care, and Medicaid is only available to those who fall under certain asset and/or income limits. Assets and income available for use by the spouse in the nursing home.

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Going into a nursing home doesn’t mean you have to distribute your IRA. Though you may have to apply some of your income or assets to nursing expenses, you can take action to preserve your assets. Many states classify married couples’ assets as owned by both spouses. When applying for Medicaid, this status applies even if the asset is only in one spouse’s name and sometimes extends to the other spouse’s IRA. Some retirement accounts allow the owner to pull the total amount value all at once. If you cash out your entire IRA balance, your state might classify your account as an asset.

how do you protect your assets from a nursing home

The Department of Health and Human Services reported that by 2010 nearly 10 million Americans required long-term care. It is expected that 70% of people turning 65 will need long-term care at some point in their lives and that many of these people will require care from a long-term care facility or nursing home. It is never too early to begin planning for how you will pay for care, protect your assets and qualify for Medicaid. This type of trust protects the assets from seizure while still allowing you access to the money.

They establish a Medicaid trust with their two children designated a co-trustees and they move the ownership of the house and the $200,000 investment account into the name of the trust. When your spouse needs nursing home care, it can feel overwhelming. You also may be worried about how you will be able to pay for nursing home care.

how do you protect your assets from a nursing home

The drawback with these Medicaid-friendly annuities is that they give you few options when qualifying for Medicaid. After Medicaid qualification, these annuities require that the income be used to pay the nursing home and the death benefit used to pay back the State for nursing home expenses. Also you may have to cash them in, resulting in substantial surrender charge penalties, which I have seen as high as 50 percent.

But if they had come to me in the beginning, we could have set up a plan that allowed the child to get credit for the care. I’ve had child caretakers go to attorneys and ask that very question, and get the wrong answer. That is why it is important to get the information from an elder law attorney. When answering the question how can you protect your assets from Medicaid or Mainecare, first you must understand what Mainecare is. Medicaid is a government program that pays for a nursing home if you can’t afford it.

You should note that your age and your health are factors in determining the cost of this insurance, so it's a good idea to apply for it by the time you're in your mid-40s. These services not only reduced the cost of caregiving expenses but it also kept people in their homes longer and out of nursing homes. If you only need assistance with certain things, consider asking a family member to help you out during the week or pay someone to come into your home to help you. This will minimize the amount of money you need to spend on long-term care.

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