Elder law attorneys counsel clients that are preparing for the eventualities of aging, and long-term care is one of the concerns. The majority of seniors will need help with their daily needs, and more than one third will spend time in nursing facilities.
Last year, the median annual charge for a private room in a Hartford area nursing home was just under $180,000. The average length of stay is one year, but more than half of people that require paid care receive the assistance for more than 12 months.
Depending on your resources, this is a lot of money to come up with late in your life when you have not worked for many years. The situation is magnified for married couples that may be faced with two different rounds of nursing home bills.
Medicare is not the solution because the assistance that you would receive in a nursing home is considered to be custodial care, and this is not covered. In-home caregivers provide custodial care as well, so you have to look elsewhere for support if you need a home health aide.
Medicaid will cover long-term care, but you cannot qualify if you have more than $1600 in countable assets because it is a need-based benefit. Household items, personal belongings that are not very valuable, wedding and engagement rings, and heirloom jewelry are not counted.
One motor vehicle is exempt, and Medicaid is not concerned about prepaid burial plots, term life insurance, or $1500 worth of whole life insurance.
When a married person is entering a nursing home and their spouse is still living independently, the healthy spouse is entitled to a Community Spouse Resource Allowance. This is half of the countable assets up to a limit that is currently $137,400 in Connecticut. There is also a minimum allowance of $27,480.
The institutionalized spouse’s income must be contributed toward the cost of the care, but an exception is made when a healthy spouse needs the income. They can receive a maximum Monthly Maintenance Needs Allowance of $3435, and the minimum is $2177.50.
Your home is not counted if you apply for Medicaid to pay for long-term care (with a $955,000 equity limit), but there is a catch. If it is in your personal possession at the time of your passing, Medicaid can put a lien on the property because there is a Medicaid estate recovery mandate.
However, if a healthy spouse is residing in the home, there would be no Medicaid estate recovery efforts. This also applies to a minor child or a blind or disabled adult child.
Medicaid Child Caregiver Exemption
Now that we have provided the necessary background information, we can address the child caregiver exemption. To explain through the use of an example, let’s say that your adult son is living in your home with you because you need significant help with your activities of daily living.
If your son was not there to provide the necessary assistance, you would be forced to enter a nursing home. After he has been providing the care for over two years, the level of help that is needed is simply beyond the scope of his capabilities.
At that point, if you can gain Medicaid eligibility, the home would be protected from estate recovery under the child caregiver exemption.
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The child caregiver exemption is just one detail that you should be aware of when you are preparing for the future. And in fact, the exemption may not be a factor if you take the right steps to divest yourself of direct possession of your valuable resources.
This is done through the utilization of an irrevocable Medicaid trust. We can explain how it works, and if you decide to move forward, we can work with you to develop a rock-solid nursing home asset protection plan.
If you are ready to get started, you can schedule a consultation at our Glastonbury or Westport, CT estate planning offices if you call us at 860-548-1000. There is also a contact form on this site you can fill out if you would prefer to send us a message.
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