It’s never too late to protect what is yours!
Too many times have we heard from the spouse or children of a nursing home resident – “I’ve been told that it’s too late to protect the home and life savings now that my loved one is in a nursing home.” Actually, it is never too late to save your family resources from the devastating costs of nursing home care.
It is true that the average cost of nursing home care in Pennsylvania is over $115,000.00 a year and that an applicant for Medical Assistance must spend down his/her resources to $8,000.00 or less before the program will help pay for nursing home expenses. Further, there is a five-year look back period on gifting during which time your loved one may not qualify for Medical Assistance benefits even if he/she is otherwise within his/her resource limit.
However, by implementing a long term care plan, with the help of a Certified Elder Law Attorney*, that addresses your loved one’s specific goals, needs, assets, income, and family situation, your loved one could protect potentially one-half of his/her estate, if your loved one is single, and considerably more if your loved one is married with a spouse in the community. This is accomplished through the use of a very carefully planned gift, which will cause a controlled period of ineligibility for benefits, coupled with the creation of an income stream that will pay through the period of ineligibility created by the gift. For the married couple, any assets that would be subject to a spend down, could be used to create an income stream for the spouse living in the community, thus allowing the spouse in the nursing home to qualify for Medical Assistance benefits right away.
For example, assume that Robert, a single person, has $120,000.00 in assets that would have to be spent down before Medical Assistance will help pay for his nursing home care. Robert could use the entire amount to pay for his care for approximately 12 months and then apply for Medical Assistance benefits. In the alternative, Robert could gift $60,000.00 to his children resulting in approximately 6 months of ineligibility for benefits. Robert would use the remaining $60,000.00 to create a substantial income stream during the 6 month ineligibility period, allowing him to pay privately for his care. At the end of the ineligibility period, Robert will qualify for Medical Assistance and he would have successfully protected one-half of his estate.
Assume that Roberta, a married woman with a husband living at home, has $120,000.00 is assets subject to the “spend down”. Instead of paying privately for care for 1 year, Roberta could use the at-risk amount to purchase an income stream for her husband. Since there is no penalty for gifts between spouses, the couple is able to protect 100% of the assets that were otherwise subject loss.
As you can see, it really is never too late to protect assets even if your loved one has already been admitted to a nursing home.
