Elder law attorneys focus on legal and financial matters that are of interest to senior citizens. The primary issue that we deal with on a day-to-day basis is the matter of long-term care for seniors.
If you are assuming that it will take care of itself one way or another, you may be surprised when you hear the facts. In this post, we will share five things everyone should know about the subject.
Most Seniors Will Need It
It is hard to envision a time when you will become unable to take care of your day-to-day activities. However, aging has an impact, and it is difficult to fully grasp the reality until you arrive at the destination.
To put it into perspective, if you live long enough to collect Social Security, you are likely to live into your mid-eighties. At that point, getting around can be challenging. In fact, according to the U.S. Department of Health and Human Services, most seniors will need paid living assistance eventually.
Medicare Won’t Help
Medicare does not pay for a stay in a long-term care facility. It also doesn’t cover in-home care that is provided by a professional in-home health aide. The program will pay for convalescent care, but it does not cover the custodial care that nursing homes provide.
Long-Term Care Is Very Expensive
It is not easy to get out a checkbook and pay for a stay in a nursing home. According to the state, the average daily cost in Oklahoma is about $180. This equates to $65,700 over the course of a year, and some quality facilities are considerably more expensive.
About 13 percent of people that require paid care need the assistance for more than five years. Just over half incur the bills for more than a year. If you are married, you and your spouse may be saddled with two different sets of nursing home bills before all is said and done.
Medicaid Can Provide a Solution
All is not gloom and doom when it comes to long-term care costs if you take the appropriate steps in advance. Medicaid will cover these costs if you can gain eligibility. Of course, it is a need-based program that is jointly administered by the federal and state government. As a result, there is a low $2,000 asset limit.
However, some property does not count, including your home with a $636,000 equity limit.
One motor vehicle is not counted, and wedding and engagement rings and heirloom jewelry are exempt. They are not worried about your household items and personal effects. You can have unlimited term life insurance and $1,500 of whole life insurance.
With regard to the home, there is a Medicaid estate recovery mandate. If you are a Medicaid beneficiary, and your home is in your possession at the time of your passing, they could place a lien on the property.
A Medicaid Trust Can Be Established
You can transfer assets out of your name to gain eligibility, but there is a five-year look back period. A lot of people rely on income that is generated by their invested retirement nest eggs, so they would not be in a position to give the resources to their children long before they need long-term care.
Fortunately, a Medicaid trust can be used to bridge the gap. The principal will no longer be accessible after you fund the trust, but you could accept distributions of the trust’s earnings. Plus, if you convey your home into the trust, it will be protected during the Medicaid estate recovery phase.
We Can Help You Create an Effective Nursing Home Asset Protection Plan
All of this will sound complicated to a layperson, and it is challenging to navigate the system. When you work with our firm, we will help you implement a plan that protects your legacy for the benefit of your loved ones.
If you are ready to get started, you can schedule a consultation at our Oklahoma City estate planning office if you call us at 405-843-6100, and you can use our contact form to send us a message.
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