What Can We Do Now To Prepare For The Cost Of Long Term Care In Massachusetts

Long term care is extremely expensive. Indeed, the average cost of nursing home care in Massachusetts is nearly $400 per day (Massachusetts Division of InsuranceThat is nearly $150,000 per year. ).   We see in our practice the typical cost per day for a nursing home in the Greater Boston Area to range between $433 to $ 700 per day, with the most common daily rate being $550 or $198,000 per year.  It can quickly drain a person’s life savings. Most studies are consistent in showing that 1 in 2 people will need some type of long-term care. (*U.S. Dep’t of Health& Hum. Servs., How Much Care Will You Need?, ACL.gov (Feb. 18, 2020), https://acl.gov/ltc/basic-needs/how-much-care-will-you-need). A proactive approach is a must. Here, our Boston elder law attorney explains the strategies that you can use now to prepare for the cost of long term care in Massachusetts.

You Can Set Up a Medicaid Compliant Trust (Five Year Lookback)

One of the most important things to know about long-term care planning, and elder law more broadly, is that Medicare does not provide reliable coverage. Instead, MassHealth (the Massachusetts Medicaid program) is the primary public payer for long-term nursing home care. However, MassHealth is strictly means tested. You are required to “spend down” your own non-exempt assets before it will provide any coverage at all.

A properly set up irrevocable trust can help. Though, it needs to be established well in advance. MassHealth applies a five-year lookback on transfers under 42 U.S.C. Section 1396p(c). Transfers for less than fair market value during that period can lead to a penalty period of ineligibility. In other words, planning must occur well in advance of anticipated need. Properly structured, assets transferred to a qualifying trust can fall outside the countable resource calculation after the lookback period expires.

Long Term Care Planning Tip: An irrevocable trust is a very powerful asset protection tool. However, it must be set up and funded at least five years in advance to be fully effective in Massachusetts. 

Income and Resource Structuring as Asset Protection Strategies in Massachusetts

Within the context of long-term care, asset protection requires careful coordination of ownership, beneficiary designations, and income streams. How exactly income and assets are structured can make a big difference. Here is an overview:

• Your Primary Home: Your primary residence may qualify for an exemption up to an equity cap. The primary residence is one of the more powerful non-trust related asset protection tools. An experienced Massachusetts estate planning lawyer can help.
• Marriage Planning: Spousal planning becomes critical where one spouse requires care and the other remains in the community. Federal law permits a community spouse resource allowance and income protections. That is true for MassHealth coverage.
• Conversion from Countable to Exempt: Another strategy is that converting countable assets into exempt resources or income streams may improve eligibility positioning. 

Speak to a Boston Long Term Care Planning Lawyer Today

At Fisher Law LLC, our Massachusetts elder law attorney has the experience needed for long term care planning. If you have any questions about preparing for the cost of long term care, please do not hesitate to contact us for a completely confidential, no obligation case assessment. We provide long term care planning services throughout the Greater Boston metropolitan area.

Source:

mass.gov/info-details/what-is-long-term-care-insurance