Medicare does not pay for an extended stay in a nursing home or assisted living community, and these facilities come with a very high price tag.
When you discuss the matter with an elder law attorney you may come away with the realization that you would do well to angle toward Medicaid eligibility as a way to address future long-term care costs.
How many people wind up relying on Medicaid to pay for living assistance? According to the Kaiser Family Foundation around 70% of elders who are residing in nursing homes receive Medicaid benefits.
Medicaid evaluates your financial assets when you apply for the program. There is an upper resource limit of $2000, but your home, your motor vehicle, and many of your personal belongings do not count when the total is being tallied.
A question sometimes arises with regard to living trusts and Medicaid eligibility. Is it possible to place money into a revocable living trust to reduce your personal assets before applying for Medicaid?
The answer to this question is no. When you create a revocable living trust you have the power to change the terms or dissolve the trust. And, the majority of people are going to act as both the trustee and the beneficiary while they are still alive and well.
Because of the above you are retaining incidents of ownership and these resources are essentially still yours. As a result, they will in fact be counted when Medicaid is determining whether or not you are eligible for the program.
Author, President and Founding Attorney
Parman & Easterday
- Five Things You Need to Know About Medicaid Planning - July 27, 2021
- Debunking Four Estate Planning Myths - July 22, 2021
- These Two Bills Would Broaden Taxes on Inheritances - July 20, 2021