Stay financially independent after retirement.As much as it worries you, you know that you have to be aggressive in protecting your assets now because of the future care you may need. Nursing homes provide a valuable benefit to many families. They allow a person to get the care they need on a daily basis—care they cannot get at home. Yet, they are costly investments that can quickly drain any savings you have.

As you get older, you can take steps to minimize the financial burden of nursing home care and preserve as much of your savings as possible. To do that, you need to work with an elder law attorney to implement wealth protection strategies that will prepare you for whatever the future may hold.

Recognize Your Need to Be Aggressive With Planning

The cost of nursing home care continues to rise. Some reports from U.S. News & World Report found that the cost of a semi-private room was $81,000 per year with private rooms costing as much as $90,000 per year. While there are some resources available through Medicare and Medicaid, most people still foot the bill for a considerable amount of this care.

Because these costs vary significantly, it’s best to start working on a financial plan as early as possible with an elder law attorney. With your attorney’s guidance, you can create a plan for using your assets in a wise manner as long as possible, minimizing dependency on Medicaid or Medicare. You can’t count on Medicare to provide for anything more than short-term care in a nursing home—up to 100 days of skilled nursing care per illness.

Medicaid may fill some individual needs if you meet income qualifications, but you’ll have to choose a Medicaid-approved location for any care. Although most nursing homes accept Medicaid payments, some do not.   

Develop a Plan That Allows You to Get the Care You Need

There are several steps to take to start planning for the care you need. This starts with analyzing what you have. Often, you’ll want to make key decisions about your estate and assets long before you need nursing home services.

Giving away assets should be done with extreme caution. Medicaid has a five-year look-back period. If you give away assets or sell them for below market value within five years of applying for Medicaid, you will be disqualified. There’s also the federal gift tax to consider.

Remember, there’s no way to know when you’ll need nursing home care. For that reason, be aggressive in creating a financial plan to pay for these needs now.

Move assets to more secure methods that allow you to maintain control over them as long as possible while making it easier for you to qualify for Medicaid. For example, Medicaid exempts the following assets:

  • IRAs, 401(k)s, and other qualified retirement plans paying out a monthly income
  • Annuities paying out a monthly income that name a spouse as the primary beneficiary
  • Assets in trusts set up by someone other than the Medicaid applicant
  • Assets in a Medicaid Asset Protection Trust (MAPT), if they have been held in trust for more than five years

Additionally, paying off your mortgage and making necessary home improvements can be a great way to spend down assets. Medicaid does not count the value of a home up to $840,000 when determining eligibility for services.

Keep in mind Medicaid does take into account the needs of a spouse who does not require care. Concerns about a spouse ending up with nothing are mostly unfounded.  

Work With an Experienced Wilmington Elder Law Attorney 

The sooner you take these, and other recommended action steps from your elder law attorney, the more likely you are to remain in control over your own decisions about your assets. You’ll be able to minimize the risk of being disqualified from Medicaid while also increasing the potential to maintain your estate longer.

At Legacy Lawyers, we want to ensure you’re getting the care you need, but not draining your finances for it to happen. The sooner you call and speak to our elder law attorney in Wilmington, North Carolina, the more likely you are to get the support you need. It also means you’ll likely have more options for protecting your assets. Call us now for a free consultation at 910-452-3577.

 

John J. Peck
Wilmington Elder Law, Estate Planning & Asset Protection Attorney