How A Comprehensive Estate Plan Can Help You Cover Future Long-Term Care Costs
Massachusetts is one of the most expensive states for long-term care in the entire country. According to data from Senior Living, the average monthly cost of a private room in a nursing home is now $13,535. It is an astounding figure. A few years (or even months) of long-term care needs could quickly eat away at a person’s life savings. There is good news: A proactive estate plan can provide significant protection. Here, our Walpole estate planning attorneys explain the key things to know about protecting yourself and your family against the risk of future long-term care costs.
Important Background: Medicare Provides Little in the Way of Long-Term Care Coverage
Medicare, the federal health insurance program primarily for people over 65, provides very limited coverage for long-term care. That is not to say that there is no federal coverage at all, but that it is Medicaid through which people in need must generally seek nursing home care coverage and other types of long-term care coverage.
Why does this distinction matter? Medicaid is a strictly needs-based program. Only those with a genuine financial need—as determined by asset and income tests—can qualify for coverage. Medicaid may make a person/family spend their own financial assets (life savings) before they can qualify.
Estate Planning Strategies Can Help Preserve Your Wealth and Protect Your Assets
Planning for the cost of long-term care is an important but daunting task. But, despite the complexities and the immensity of such a project, it is a cruical and prudent undertaking, given the cost of care, whether in-home or skilled nursing care at a facility. The typical cost of skilled care in our area is $550 per day or $16,500 per month or $198,000 per year. A long term care plan is crucial to preserve wealth, protect assets, and create a legacy for your family and loved ones.
While many take the attitude of “It will not happen to my family” or “I’ll take my chances”, there is still a 50 percent chance that you or someone you love will need long term care. It is prudent to plan in the face of these statistics and the costs. When you pre-plan for long term care, you have many strategies available, such as the use of an irrevocable Medicaid asset protection trust. If you have not pre-planned, you likely do not have 60 months to gift or transfer assets to a trust, with the amout of countable assets likely to exceed the limits set out in the regulations. This translates into paying privately at the rate of approximately $16,500 per month currently until you have spent these resources on your care. Money spent on care is no longer available to leave to your children and grandchildren after you pass.
While there are always crisis strategies available to spenddown excess resources on permissible items, the number of crisis strategies dwindle depending upon your marital status. In short, when you pre-plan you have several arrows in your quiver that are designed to ensure eligibility when needed. The number of arrows in your quiver is reduced if you do not plan but are married at the time you have entered a nursing home and submit an application for MassHealth. And, in the case of an applicant who is single or widowed and who has not planned, the number and effectiveness of the arrows are severely reduced. Planning is key.
It is crucial that individuals and families put proactive estate planning strategies in place to preserve wealth and protect their assets. The reality is that you cannot predict what tomorrow’s health needs will be. You or your loved one could require skilled nursing home care or other long-term care service at some point in the future. It is a best practice to prepare your estate before there is any such need. There are a number of different estate planning and asset protection strategies available, including:
- Long-term care insurance;
- Setting up an irrevocable trust; and
- Early gifting of assets to future generations.
Perhaps the most important thing to keep in mind about Medicaid crisis planning and long-term care planning is that there is no true one-size-fits-all solution. The best approach for you and your family will depend on your age, health status, and financial circumstances. A Massachusetts estate planning lawyer with experience handling asset protection issues can review your situation and determine the most effective strategy to preserve your wealth and protect your assets from the risks posed by the potential need for nursing home care or other forms of long-term care.
Schedule a Confidential Case Review With a Massachusetts Asset Protection Lawyer
At Fisher Law LLC, our Massachusetts asset protection attorneys have the skills and experience to handle the full range of Medicaid planning and long-term care planning issues. Contact our law firm today to set up your confidential initial appointment. We provide long-term care planning services in Walpole, Norfolk County, and throughout the entirety of the Greater Boston area.