Table of Content
- Three Tips to Protect Your Assets when Your Spouse Needs Nursing Home Care:
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- USING ASSETS TO PAY OFF DEBTS AND EXPENSES
- Download our Free Book on Asset Protection Planning!
- #6 Asset Protection Using Long Term Care Insurance or Life Insurance with Long Term Care Riders
- Gift Assets Without Penalty
That is why I frequently call estate planning a “team sport”. Because, it is best for your trusted advisors to collaborate and communicate with one another to make your plan. If you’d like to protect your money from Medicaid, making a plan to age in place is a good start. But if you have too much money or property you won’t qualify for Mainecare home-based services. So how do you qualify if you have too much money or property?
However, very few older adults—less than 10%—have long-term care insurance. The premiums can be expensive, and grow even more so the later you wait to obtain the insurance. Some people are in denial that they would need it, and are reluctant to pay high premiums for a benefit they may never receive. Others, unfortunately, wait too long and become ineligible. There are certain drawbacks to using a MAPT to protect your assets if you go into a nursing home.
Three Tips to Protect Your Assets when Your Spouse Needs Nursing Home Care:
If Linda had put the house into a Medicaid trust 5 years prior to her stroke, she would have immediately qualified for Medicaid, but Medicaid would not be entitled to put a lien against her primary residence. When she passes away, since the house is owned by the trust, there is no probate, and her children receive the full value of the house. For the Medicaid Trust strategy to work, the assets have to be put into the trust 5 years prior to submission of the Medicaid application. Once the assets are owned by the trust for more than 5 years, regardless of the dollar value in the trust, it’s no longer a countable asset, and the individual can automatically qualify for Medicaid.
The attorney can then work with you to come up with a financial plan that best meets your needs and protects your assets should you or your spouse require nursing home care. You will need to look closely at your private insurance policy as most insurers do not cover long-term nursing home care. Naming you as the life tenant and a loved one you trust as the remainderman, with future ownership interest in the property. As a life tenant, you retain the right to continue living in your home until your death.
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Pre-tax retirement accounts such as Traditional IRA’s and 401 plans are not countable assets. Pre-paid funeral expenses up to a specific dollar threshold are also not a countable asset. Outside of those three assets, almost everything else is a countable asset. As we all live longer, we become more frail in our 80’s and 90’s, which increases the probability of a long term care event occurring. If you have significant financial resources, you may be able to afford to pay for nursing home services or private in-home services out of pocket. It is unlikely that you would be able or desire to reduce your wealth to such a degree as to qualify for Medicaid.
Nonetheless, when it comes to Medicaid, people are always scared that Medicaid will take their assets during the estate recovery process when the applicants die. They feel they weren’t informed but the truth is the process was listed in the documents. You may or may not want to or need to "protect" the family home, depending on the situation as the home is not a countable asset for Medicaid purposes unless it is worth more than $636,000 . We have a lot more about the Florida homestead and Medicaid on this blog post. Nearly 70 percent of seniors will receive such help sometime during their old age—usually at home, but often in a nursing home. One in five of us will need long term care assistance for five years or more.
USING ASSETS TO PAY OFF DEBTS AND EXPENSES
For instance, if you purchase an annuity that doesn’t pay out for a number of years, and one spouse goes into a nursing home before the payout begins – that’s a problem. If you purchase an annuity and payments go to the spouse who then needs to go into the nursing home – that’s a problem. In short, there are a number of ways that giving away your assets to avoid paying them to the nursing home can go wrong.
These fees are covered by provincial health care plans or private insurance policies. The healthy spouse may also be able to claim some of their partner’s pension income as their own if they meet certain criteria set out by the government. It is important to note that even though the healthy spouse is not financially responsible for their partner’s nursing home care, they may still be required to provide emotional support. If you have investments, you can keep them in a separate account from your other assets so they are not subject to seizure if you are sued. You can also create a living trust which will hold your assets and distribute them according to your wishes after you die. There are many options available to protect your family assets, so talk to an attorney or financial advisor to find the best solution for your situation.
In some cases, you may also be able to gift your home and retirement funds to others, but they may be liable for a gift or capital gains taxes. The average cost of a nursing home ranges from $50,000 per year up to $92,000 per year , which is simply out of reach for many older Americans. In Massachusetts the number can exceed $150,000 annually.
A good elder law attorney can protect assets and apply for Medicaid in any part of Florida. One key is that the family must need a good durable power of attorney to be able to legally protect the assets. We can help people across the state under most circumstances.
With all the negatives about Option 9 – the risk of loss to divorce, lawsuits, bankruptcy, or just plain refusal of the gift recipient to use your stuff for your benefit – Option 9 still doesn’t seem foolproof. In a future option on this list you’lldiscover how you can maintain control of assets and protect them at the same time. Plan ahead so transfers to the trust will not run afoul of Medicaid rules. Finally, be certain to consult an elder law orestate planning attorney. They will help you understand the best options and strategies for your life stage and assets.
For your countable assets, you can transfer his/her money to trust. For your countable assets, transfer his/her money to trust. Many people resort to a nursing home when it comes to their old relatives or a sick spouse.
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