How Do I Keep My Assets from the Nursing Home?

How Do I Keep My Assets from the Nursing Home?

If you don’t have a plan for your assets when it comes time for nursing home care, they can be at risk. Begin planning now for the expenses of senior living. The first step is to consider the role of Medicaid in paying for nursing home services.

WRCB’s recent article entitled “How to Protect Your Assets from Nursing Homes” describes the way in which Medicaid helps pay for nursing homes and what you can do to shield your assets.

One issue is confusing nursing homes and skilled nursing facilities. Medicare does cover a stay in a skilled nursing facility for convalescence. However, it doesn’t pay for full-time residence in a nursing home. For people who can’t afford to pay and don’t have long-term care insurance, they can apply for Medicaid. That’s a government program that can pay nursing home costs for those with a low income. People who don’t have the savings to pay for nursing home care and then require that level of care, may be able to use Medicaid.

For those who don’t qualify for Medicaid when they need nursing home care, they may become eligible when their savings are depleted. With less money in the bank and minimal income, Medicaid can pay for nursing home care. It is also important to remember that when a Medicaid recipient dies, the government may recoup the benefits provided for nursing home care from the estate. Family members may discover that this will impact their inheritance. To avoid this, look at these ways to protect assets from nursing home expenses.

Give Away Assets. Giving loved ones your assets as gifts can help keep them from being taken by the government when you die. However, there may be tax consequences and could render you Medicaid ineligible.

Create an Irrevocable Trust. When assets are placed in an irrevocable trust, they can no longer belong to you because you name an independent trustee. The only exception is that Medicaid will count assets in this trust to determine eligibility before the 5-year look back period has run.    This highlights the importance of pre-planning.  Although there are crisis strategies available to an applicant who has failed to preplan, the strategies available and thus the ability to protect or shelter assets are limited, especially if the applicant is single or widowed at the time of application.

Contact an experienced elder law attorney to help you protect your assets. The more you delay, the more likely you will have to use your assets to pay for long term care or skilled home care.  With the average cost of a nursing home in the Greater Boston area averaging just under $17,000 per month and the statistical average stay in a nursing home of 36 months, the lack of planning for long term care is likely to result in less of a legacy to leave to heirs and loved ones.

Reference: WRCB (Dayton) (Sep. 4, 2020) “How to Protect Your Assets from Nursing Homes”