When you are approach the process of estate planning in a holistic way. While there are certainly exceptions, people generally pass away after reaching an advanced age. The average life span at the present time is 78 years, but the segment of the population that is 85 and older is growing faster than any other.
There is a very real possibility that you will live into your mid-eighties and beyond. Approximately 45 percent of people who are in this age group suffer from Alzheimer’s disease.
Alzheimer’s causes dementia. If you are suffering from dementia you may find it impossible to handle your own day-to-day tasks. As a result, you may require nursing home care.
Nursing homes are very expensive, and it is simply impossible for many people to pay out-of-pocket without losing everything that they have saved in the process.
According to Genworth Financial, in the state of Connecticut the median cost for a private room in a nursing home in 2013 was $151,658.
If you have to spend a few years in a nursing home you could be looking at an enormous expense.
Many people are not aware of the fact that Medicare will not pay for long-term care. Though you could perhaps argue otherwise, long-term care is considered to be custodial care rather than medical care. Medicare won’t pay for custodial care.
However, Medicaid will pay for a stay in an assisted living community or nursing home if you can meet eligibility requirements. Because Medicaid is a need-based program, your countable assets and income will be evaluated to determine your eligibility.
If you have never been financially needy throughout your life you may automatically assume that you will never be able to qualify for Medicaid. Unfortunately, you would be able to qualify if you were to spend all of your resources paying for long-term care.
It is possible to plan ahead in advance with Medicaid eligibility in mind in an effort to preserve resources for the well-being of your loved ones. You can start to plan after early signs of dementia are detected.
The reason why advance planning is important is because there is a five year look back period. If you were to give away assets within five years of applying for Medicaid, a penalty would be imposed. This penalty would delay your eligibility.
The length of the delay is determined based on a formula that compares the cost of long-term care in the state of Connecticut to the amount of the divestitures.
To be optimally prepared you should certainly discuss Medicaid planning with a licensed elder law attorney. If you take the right steps in advance, you may be able to gain eligibility if and when you need long-term care without losing everything that you have saved.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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