The matter of long-term care is the most pressing issue that elder law attorneys address on behalf of their clients. If you have not given it much thought, these compelling facts should definitely get your attention.
You will probably need long-term care.
According to the United States Department of Health and Human Services, just over half of seniors will require paid living assistance, and 35 percent will live in nursing homes.
Nursing home care is not affordable for most people.
You probably developed a financial plan that has been constructed to give you the ability to leave a suitable legacy to your loved ones. If you have not budgeted for nursing home costs, you may not be seeing a clear picture.
The median annual cost for a private room in a nursing home in the Hartford area was $167,900 last year. That is a great deal of money to come up with late in your life, and if you are married, the expenses may be doubled.
Medicare will not be the answer.
It is natural to assume that Medicare will pay for long-term care in light of the fact that most seniors will need living assistance and it is health insurance for elders. Whether it makes sense or not, the hard reality is that Medicare will not cover a stay in a nursing facility.
The program will not pay for in-home custodial care that is provided by a home health aide either, so you have to look elsewhere for assistance.
Medicaid covers long-term care.
Medicaid is another government health insurance program, and it will pay for a stay in a nursing home. There is a Medicaid waiver that will cover in-home care, so this is a potential solution.
Some assets don’t count.
There is a $2000 Medicaid asset limit, but your home is not counted with an equity limit of $906,000 in Connecticut 2021. There is no equity limit at all if a healthy spouse is going to stay in the home when their spouse is entering a nursing facility.
If you have heirloom jewelry, it is not counted, and your wedding and engagement rings are exempt along with a transportation vehicle. Your furniture and the other items that are in your home are not counted, and your personal belongings are not counted.
A prepaid burial plot would not count, and as much $1500 can be saved for burial or cremation costs. Unlimited term life insurance is permitted, and you can carry up to $1500 of whole life insurance.
You can divest yourself of assets to qualify for Medicaid, but advance planning is necessary.
There is a five-year Medicaid look back period, so you can give away assets to qualify, but you would not be eligible for five years. This can make lifetime gift giving impossible if you need income that is generated by invested assets.
However, there is a solution in the form of an income only Medicaid trust. You could accept distributions of the trust’s earnings after you fund the trust while you are living independently.
Of course, you would not be able to touch the principal, but it would not count if you apply for Medicaid as long as you do not violate the look back period.
Even though a home does not count, there is another consideration. Medicaid is required to seek reimbursement from the estates of deceased beneficiaries. If you are a beneficiary and you are in direct possession of your home at the time of your death, they could place a lien on the property.
There is a caregiver child exemption.
In some cases, an adult child will live with their parent to provide in-home care so they do not have to move into a nursing home. If a child does this for at least two years before the parent applies for Medicaid to pay for a nursing facility, the parent could give the home to the child.
The five-year look back would not apply, and the home would be protected during the Medicaid estate recovery phase.
Schedule a Consultation Today!
We can help you develop a nursing home asset protection plan that will provide you with peace of mind and protect your legacy. If you are ready to get started, you can schedule a consultation at our elder law office in Westport or Glastonbury, CT if you call us at 860-548-1000.
If you would rather send us a message, fill out our contact form and we will get back in touch with you promptly.
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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