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Create or modify your wills to include a testamentary trust providing for the welfare of the surviving spouse. This provides financial protection for both you and your spouse regardless of which of you dies first. It sounds simple, but our number 1 of the Top Ten Ways to Protect Your Money and Your House from Mainecare, Medicaid or a Nursing Home is to make a plan. Working with an estate planning attorney, you can find out which of these strategies fit your family situation.
Sitting around and hoping others will take care of you is not the way to avoid a nursing home. In Florida, houses valued at $560,000 can be exempt from being counted as a resource in the eyes of Medicaid if the applicant has an “intent to return home”. So, here, since the house is only worth $500,000, the Medicaid applicant will not need to sell their house in order to qualify for Medicaid. In fact, Medicaid only looks at the equity in the home – since the house has a$200,000 mortgage on it, Medicaid essentially only looks at the house as a$300,000 asset (still below the $560,000 limit). Sadly, seniors can be exploited and tricked into giving away assets by nursing home administrators and caretakers – those they trust. Anyone that has access to a senior’s finances can do this, including friends and family as well.
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Another option would be for the homeowner to obtain a reverse mortgage and then sheltering the excess cash. The simple answer is that the seventy percent of people did not have a plan in place that made sure their beneficiaries got their money or their house. After more than twenty years of estate planning, I’m certain that many of the transfers that worked were pure luck. The reason we’re focusing on for this top ten list is loss of assets due to the high cost of nursing home care.
Many residents pay directly out of pocket until they exhaust their entire life savings and have nothing more to offer, forcing the nursing home to go after their assets to continue funding their stay. The federal government has the Medicare program for those from lower economic backgrounds, but not everybody qualifies for the program. Your beneficiary would be able to decide how the money from the policy should be used. That might include paying final expenses, paying off a mortgage debt or covering day-to-day living expenses. Understand the ins and outs of insurance to cover the high cost of nursing home care, including when to buy it, how much to buy, and which spouse should get the coverage. Medicare's coverage of nursing home care is quite limited.
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Medicare can also pay for nursing care, but only if you need short-term rehabilitative care. If you require long-term nursing care, Medicare won’t cover any of those costs. In addition, some children or relatives may be able to protect a nursing home resident's house if they qualify for an undue hardship waiver. For example, if your daughter took care of you before you entered the nursing home and has no other permanent residence, she may be able to avoid a claim against your house after you die. Consult with an attorney to find out if the undue hardship waiver may be applicable. However, once your spouse or dependent relative dies or moves out, the state can try to collect.
Long-term care insurance can cover your nursing care expenses but buying a policy can be expensive. Medicaid and asset protection planning is not for do-it-yourselfers. Often this results Medicaid ineligibility for many months and additional costs and expenses.
The Unspoken Risk for Assets – Financial Abuse in Nursing Homes
Typically, a lower net worth means more assistance to cover your home costs. But you’ll still get to hang on to the monthly payment from your annuity. With all four grandparents, plenty of uncles and aunts, plus lots of cousins of all ages and two younger siblings, Dennis understood the love and laughter and closeness that family means. With all of his grandparents farmers, Dennis learned quickly what hard work, being frugal and planning ahead for hard times meant. The Omnibus Budget Reconciliation Act of 1993 gives state Medicaid officials the right to recoup any funds spent on your nursing home care from your estate after your death.
Talk to your financial adviser and an attorney about using a trust for asset protection and what it could do to reduce the risk in your plan. Careful planning for potentially devastating long-term care costs can help protect your estate, whether for your spouse or for your children. Here is how to protect your parents’ assets from nursing homeAvoid nursing homes if it’s not necessary. Since the money in the account is admittedly that of your mother, and, as a general rule, must be used for her care. There is a look back period where transfers of persons property are scrutinized before being able to have medicaid pay her nursing expenses. It may be possible to shield a part of the funds, but more facts are needed.
Ten Ways to Protect Your Assets from Mainecare, Medicaid or a Nursing Home
Other exempt persons you can transfer the house to include children below 21 years and Medicaid beneficiary spouses who own part of the home shares. You can also transfer to any dependent child who has resided in the house for more than two years and can therefore legally call the house home. So, they should try to attend to the parent at home for the longest time possible before giving in to pressure. This way, the senior citizens will spend a shorter duration in nursing homes, which means less accumulation of bills. You can settle lighter bills without warranting the selling of the house.
If your parents don’t have long-term care insurance, they are either going to have to pay thousands of dollars a month for nursing home care or rely on Medi-Cal. Note that trusts are not failproof and are subject to seizure in some states, such as Missouri. You should, therefore, hire a competent elder law attorney while setting up the trust.
Transfer money into a Medicaid Asset Protection Trust. With a Medicaid Asset Protection Trust , you transfer all of your assets to the trust and thereby give up the ability to control those funds. You can remain in your home and your income is outside of the trust but the principal of the trust is protected and does not count towards your Medicaid asset total. Also note, that trusts are subject to seizure in Missouri Case Law-find Mo V. Violet J. Knight and Tommy Jones, Appellants. They believed this "Trust" would keep their property safe. This is not the case.It is very important that you use an attorney to set up this trust.
If your mother might need to apply for Medicaid, then you must be very careful about transferring assets. An elder law attorney can guide you regarding what techniques will work. You can move your mother's cash but it will not assist in her placement or in retaining her assets. You need to discuss this matter with an elder law attorney who can assist you in providing for your mother and preserving what you can of her estate. Out of the blue, many people suddenly need full-time care for their parents.
Also, after your death, a properly titled asset would also avoid probate and not be an available asset under the State’s Medicaid estate recovery program to pay back the State for Medicaid benefits paid. The rules are complex but a qualified elder law attorney in the state where you reside should be able to advise you of your best options. If you live in Pennsylvania you can contact my law firm, Marshall, Parker and Weber. We have been helping seniors protect their homes for over 25 years. You may be able to avoid Medicaid Estate recovery in several ways. But, don’t just put your childrens name on the deed – that can have disastrous consequences.
When presented with this fact, some of my workshop attendees simply say, that their plan is not to own anything. Not owning anything is a common response from the people who come to my workshops. After all, I’ve had the same thought when faced with my own fiscal concerns. For instance, paying for my kid’s college, and at the same time, an expensive home repair. Once you get past this natural reaction, you realize the better option is to invest in a plan. If you have accumulated assets why not use your money to provide for yourself and your loved ones.
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