It is easy to believe that long-term care is something other people might need, but not you. You may feel healthy, active, and independent. You might assume your family will step in if the time comes.
But the reality is that most people over the age of 65 will need some form of long-term care at some point in their lives.
According to a government study, about 70 percent of seniors will require help with daily living activities such as bathing, dressing, or eating. This need may come gradually, due to aging or chronic illness, or it may arise suddenly after an injury or medical event.
No matter how it begins, needing long-term care is not a rare situation—it’s the norm among people who have reached an advanced age.
Why Long-Term Care Is So Common
As life expectancy continues to rise, so does the chance that you will experience physical or cognitive decline in later years. Conditions like arthritis, stroke, diabetes, and dementia are common contributors to the need for assistance.
Even if you do not face a serious diagnosis, the natural effects of aging can make it hard to remain fully independent.
Family support can help, but it often is not enough. Your loved ones may not have the training, time, or ability to provide the care you need.
Many people end up moving to assisted living facilities, hiring home care providers, or entering nursing homes. These services can provide safety and quality of life, but they come with a cost.
The Financial Burden of Care
Long-term care services are very expensive, especially when needed for an extended period. You might think your health insurance or Medicare will cover these costs, but that is a dangerous assumption.
Medicare only covers limited short-term care in specific situations, and only after a qualifying hospital stay. It does not pay for the ongoing custodial care that most people need.
That leaves many families to pay out of pocket. Unless you have long-term care insurance or a significant savings cushion, those expenses can drain your assets quickly. Without planning, you may have to spend down your resources to qualify for financial help through Medicaid.
Medicaid Planning
Unlike Medicare, Medicaid does pay for long-term care, including nursing home care and some in-home services. However, Medicaid is a need-based program.
To qualify, your income and assets must fall within strict limits. In Oklahoma, that means you cannot have more than $2,000 in countable assets.
Many people think they can just transfer their assets to family members to qualify, but Medicaid reviews your financial transactions going back five years.
If you have made gifts or transferred property during that time, you may be penalized with a period of ineligibility. That is why early planning is so important.
Using a Medicaid Asset Protection Trust
If you want to protect your savings and still qualify for Medicaid when the time comes, one option is to create a Medicaid trust. This type of trust allows you to move assets out of your name, so they will not be counted against you for Medicaid eligibility.
The trust must be irrevocable, and you must set it up and fund it at least five years before you apply for Medicaid.
Once the assets are in the trust, they are managed by a trustee for the benefit of your chosen beneficiaries, often your children or other family members. You no longer have direct access to the principal, but you can receive distributions of the trust’s earnings.
This strategy does require giving up control of the principal, but in return, it offers peace of mind and financial security. You can still qualify for the care you need without sacrificing your legacy.
Take Action Now, Not Later
Advance planning is the key to nursing home asset protection, and there is no time like the present. Call us at 405-843-6100 to schedule a consultation at our Oklahoma City elder law office, and our Tulsa location can be reached at 918-615-2700.
If you would rather send us a message, fill out our contact form and we will be back in touch with you promptly.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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