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They expect the home to be sold to private pay for the LTC. It is important to understand, it is in a nursing home’s best interest to have you private pay as long as there are dollars available. Medicaid is the Federally-funded, State run program that currently pays for the majority of all LTC expenses of the elderly in nursing homes. Exceeding $90,000 annually, many people require government assistance, such as Medicaid, to cover the bills. In turn, the state may seek to reimburse those costs, a term called right of recovery.
This is the best way to protect your assets from care home fees to preserve your loved ones' inheritance. You will need to appoint trustees to manage the trust and carefully explore the different kinds of trusts available. Unfortunately, this type of Trust doesn’t work well if you’re trying to protect your money or assets from other entities (creditors, lawsuits, or applying for long-term care from Medicaid). It doesn’t work because the assets are still in your control, making it “fair game” in the above situations.
How Can a Trust Help You Avoid Nursing Home Costs?
The rules are complex and the penalties for violating the rules during the look-back period can be significant. Medicaid could bar you from applying for benefits for a number of months or even years. Set up automatic payments with your parent and have their utility bills, rent or mortgage payments, and credit card payments taken care of automatically. Agree on a daily spending limit with your parent on credit and debit card purchases. To explore your legal rights, contact a nursing home abuse attorney like attorney Seth Gladstein at the Gladstein Law Firm, PLLC.
Without assistance from government programs or insurance, money can quickly run out. Auld Brothers Law Group has experienced Elder Law attorneys in Pittsburgh who can help protect your assets from medical care expenses. If there is a Long-Term Care possibility, it is best to have a conversation with an Elder Law attorney about concerns, assets, income, wishes, and options. I suggest you find an Elder Law Attorney who is willing to provide this initial consultation for no charge or a very limited fee.
Who Pays for Nursing Home Care?
Some people look to trusts as a way to accomplish this goal. You need to understand the difference between a revocable and an irrevocable trust. One of the biggest assets that many elderly people own is their home. However, what happens to the home if they must enter a long-term care facility can be worrisome. For this reason, it is important to review the options available to protect your or your parents’ home and to plan accordingly. Because planning is unique to each person, it is important to understand what will work best for you.
” Additionally, this article will provide more information on how you can cover long-term expenses without losing all your money. Medicaid is not the same as Medicare, which is a government-based health insurance available to all seniors and that doesn’t cover long-term care. To use a Medicaid trust, you can fund the trust with assets you want to protect or “hide” from Medicaid.
Does Buying A New Car Affect Medicaid?
Nonetheless, when it comes to Medicaid, people are always scared that Medicaid will take their assets during the estate recovery process when the applicants die. They feel they weren’t informed but the truth is the process was listed in the documents. Many people resort to a nursing home when it comes to their old relatives or a sick spouse. A private nursing home can be very expensive because you’ll have to pay for the treatments they will get.
In other states like Nebraska and Nevada, your income can be higher than the income limit but it’s not up to the expenses of the nursing home. Moving your assets into this trust then effectively removes your ownership rights to the assets. Once money is deposited in a joint account, it belongs to both account holders equally, regardless of who deposited the money. Account holders can withdraw, spend, or transfer money in the account without the consent of the other person on the account. No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. If you die within 7 years of giving a gift and there's Inheritance Tax to pay, the amount of tax due depends on when you gave it.
There are legal solutions to the challenges you face, and we can help you find them. Deprivation of assets means you have intentionally decreased your overall assets, in order to reduce the amount you contribute towards the cost of care services provided by the local authority. Any past disposal of assets can be considered as possible deprivation. It is also important to understand that elder financial abuse is also underreported. Often, nursing home residents may not realize that they were victimized or fear that family members will not believe them.
And almost a quarter of those who move into a nursing home community will reside there for 3 years or more. An elder law attorney can help you navigate these risks and get you the most money. The bottom line is that any assets placed into a revocable living trust are not protected from nursing home costs. In some cases, the assets in a revocable trust can be completely wiped out by nursing home care expenses before the beneficiaries ever see a dime. Only a properly constructed irrevocable trust can protect your assets; revocable living trusts won’t provide any asset protection.
For this reason, it is important to begin estate planning more than five years before you plan on entering a nursing home to avoid problems within the five-year look-back period. Medicaid will generally look at up to five years of your finances to see what you have sold or gifted. In 2021, you can give up to $15,000 to someone in a year and generally not have to deal with the IRS about it. If you give more than $15,000 in cash or assets in a year to any one person, you need to file a gift tax return. The $10,000 annual "limit" on gifts to one person (now $14,000 in 2016) is a rule of tax law and has no relation to Medicaid law.
When your spouse enters into a nursing home, his needs would be catered for. The only money he will be having is his personal allowance which is determined by the state and your joint allowance is also considered. At Bratton Estate and Elder Care Attorneys, we know how to protect your assets from the nursing home. We can help you put an asset protection plan in place and work on getting you qualified for Medicaid sooner. The team from Bratton Estate and Elder Care Attorneys — Medicaid planning lawyers, social workers, and a registered nurse — can create a plan that works for your family. We can help you or a loved one qualify for Medicaid sooner while also protecting as many of your assets as possible.
