Wealth preservation is key, because significant expenses late in your life could damage your legacy. Unfortunately, there is an unpleasant truth that you should face head-on when you are planning your estate.
Long-Term Care
The majority of senior citizens will need help with their activities of daily living eventually, and a significant percentage of them will require nursing home care. Medicare will pay for convalescent care after an injury or illness, but it does not cover long-term custodial care.
This lack of coverage will definitely get your attention when you understand the state of long-term care costs. You can expect to pay somewhere in the vicinity of $180,000 for a year in a private room in the Hartford area. An in-home health aide comes with a price tag of about $65,000.
Overall, the average length of stay is one year. However, 13 percent of individuals that need paid care receive it for five years or more, and 21 percent are in the two-to-five year category.
Nursing home expenses can be doubled for married couples, so the bills can have a devastating impact.
Medicaid and Home Ownership
Now that we have provided the necessary background information, we can address the subject of this post. Medicaid is another government health insurance program that will pay for long-term care if you can gain eligibility.
Since it is only available to people with financial need, there is a $1,600 limit on assets in Connecticut. When you see this figure, you may assume that you cannot qualify for Medicaid if you own your own home.
In fact, your home is not considered to be a countable asset for Medicaid eligibility purposes, but there is an equity limit. There are annual adjustments to account for inflation, and the figure for 2023 has been increased to $1.033 million.
While we are on the subject of non-countable assets, we should provide a complete rundown. One motor vehicle is not counted, and household items and personal effects are not countable assets.
Prepaid burial plots are exempt along with unlimited term life insurance and $1,500 worth of whole life. The same amount of money can be set aside to help cover final expenses. Applicants can maintain possession of wedding rings, engagement rings, and heirloom jewelry.
Five-Year Look Back Period
You can fund an irrevocable trust to divest yourself of countable assets so you can qualify for Medicaid, but there is a five-year look back period. The divestitures must be completed at least five years before you submit your application for Medicaid coverage.
Home Ownership and Medicaid Estate Recovery
There are a couple of additional details that you should understand about Medicaid eligibility and home ownership. If you were to qualify for Medicaid to pay for long-term care, your estate would be subject to Medicaid estate recovery efforts.
The program would be able to put a lien on the property if it is still in your direct personal possession at the time of your passing. However, if your spouse is residing in the home, it would be protected for the rest of their life.
In addition to this provision, there is a Caregiver Child Exemption. You can give the home to an adult child if the child has been acting as your caregiver in the home for at least two years. The five-year look back would not be applicable, and the home would not be subject to recovery.
Schedule a Consultation Today!
If you are ready to work with a Glastonbury, CT elder law attorney to devise a nursing home asset protection strategy, we are here to help. We can be reached at 860-548-1000, and you can alternately use our contact form to send us a message.
Mr. McCann is licensed to practice before the courts of the State of Connecticut. He is a member of the American Academy of Estate Planning Attorneys.
Mr. McCann provides to his clients, trust and estate planning, and trust and estate administration services. Formerly, Mr. McCann was an adjunct professor of economics in the State of Connecticut Community College system, and a Commissioner of the Town of Simsbury Zoning Board of Appeals.
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