Estate Planning | Making a Difference One Family at a Time

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senior in-home careIt can be hard to imagine a time when you will be unable to handle all of your own day-to-day needs. However, according to the United States Department of Health and Human Services, just over half of seniors will need professional living assistance at some point in time.

Many folks who require help with their day-to-day needs would prefer to receive it from a senior in-home care professional. So, here’s the $10,000 question: Does Medicare cover this type of assistance for seniors?

Custodial Care

Medicare is designed to pay for medical expenses, and this will include convalescent care after an injury or illness. However, it does not pay for help with your activities of daily living, like cooking, cleaning, bathing, etc. This is considered to be custodial care rather than medical care.

The Cost of Care

Genworth Financial has been monitoring the state of long-term care costs in the United States over several years. According to their research, the median annual charge for in-home care in Connecticut is $82,482 this year.

This is a significant amount of money to come up with out of your own pocket late in your life, especially if you need care for multiple years.

Medicaid Eligibility

Fortunately, there is a widely embraced solution in the form of Medicaid eligibility. This jointly administered federal/state government health insurance program will cover custodial care for seniors.

That’s the good news, but the bad news is that there is a very low $1,600 limit on countable assets. These are the assets that are not counted:

  • Your home (with a $1.097 million equity limit in 2025)
  • One motor vehicle
  • Wedding and engagement rings and heirloom jewelry
  • Household items
  • Personal effects
  • Unlimited term life insurance
  • Up to $1,500 of whole life insurance

Regarding the equity limit, it is waived if the beneficiary or the beneficiary’s spouse remains in the home.

Medicaid Home and Community-Based Services Waiver

The standard Medicaid program will pay for nursing home care if you can qualify. There is also a Medicaid Waiver that will cover in-home care, but the eligibility requirements are the same.

Medicaid Estate Recovery

You can potentially qualify for Medicaid as a homeowner, but you have to be aware of Medicaid estate recovery. The program is required to seek reimbursement from the estates of deceased beneficiaries.

Since you cannot qualify with significant assets in your name, there is typically nothing for them to take. However, the dynamic is different if you maintain direct possession of your home. It would be in play during the estate recovery phase.

Irrevocable, Income-Only Medicaid Trust

To obtain Medicaid eligibility, you could establish an irrevocable trust. To execute this strategy, you transfer countable assets into the trust, including your home. You can no longer reach these resources, but you could continue to accept earnings that are generated by assets in the trust.

If you apply for Medicaid, the principal in the trust would not count against you, but there is a caveat. Medicaid has imposed a five-year look-back period, so you have to complete the transfers into the trust at least five years before you apply for coverage.

As long as you comply with this rule, your home will be protected from Medicaid estate recovery.

Take Action Today!

We can help you create a comprehensive plan that protects your legacy from potentially devastating long-term care costs. You can call us at 860-548-1000 to schedule a consultation at our Glastonbury, CT estate planning office, and we also have an office Westport.

If you would rather send us a message, fill out our contact form, and we will get back in touch with you promptly.

John McCann, Estate Planning Attorney
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