Over your lifetime, you have worked hard and saved wisely in an effort to build up a retirement nest egg. To ensure that you have sufficient assets to live comfortably during your retirement years, and even have some left over to pass down to loved ones, you must also be vigilant about protecting the nest egg you have accumulated. One threat to your assets that you may not have considered is the high cost of nursing home care. The North Andover asset protection attorneys at DeBruyckere Law Offices discuss protecting your assets from expenses related to nursing home care.
Will You Need Nursing Home Care?
As you age, the odds of needing long-term care increase with each passing year. When you enter your retirement years you already stand a 50-70 percent chance of needing some type of long-term care (LTC) services before the end of your life. The longer you live, the higher the odds that you will end up in a nursing home – and the cost of that care will be high. Nationwide, the average cost for a year in long-term care (LTC) was over $100,000 for 2019. In Massachusetts, however, you can expect to pay considerably more than the national average with that same year of care averaging over $150,000. Considering the average length of stay is about three years, your nursing home bill could easily be over $500,000.
The High Cost of Nursing Home Care
If you are accustomed to relying on health insurance to cover your healthcare expenses, this may not sound as problematic as it really is; however, most health insurance policies will not pay for LTC unless you purchased a separate LTC policy at an additional expense. Medicare will not be able to help either because the Medicare program only covers LTC expenses when they follow an inpatient hospital stay – and even then, only for a short period of time. For over half of all seniors currently in LTC, the only viable option for help covering LTC costs is Medicaid.
Your Nest Egg Could Be at Risk If You Need to Rely on Medicaid
If you made a moderate to high wage over the course of your working career, you probably never qualified for Medicaid. As such, you never considered the eligibility requirements. Medicaid is a federal healthcare program targeted at providing healthcare services to low income individuals and families. Because Medicaid is a “needs-based” program that is intended to help low-income individuals and families with healthcare expenses, the program uses both income and assets limits when determining eligibility. An applicant cannot own countable resources (assets) valued at more than the limit or the application will be turned down. As an individual applicant, your countable resources cannot exceed $2,000. It is the asset limit requirement that can ultimately threaten your hard-earned assets because if your assets exceed the limit, your application will be denied and you will have to “spend-down” those assets until they fall below the limit. In other words, you could be forced to rely on your retirement nest egg to pay for your nursing home expenses, until those assets are gone, and you meet the Medicaid asset limit eligibility requirement.
How Can Medicaid Planning Help?
The good news is that there are a number of perfectly legal asset protection tools and strategies that can be incorporated into a Medicaid planning component within your estate plan to ensure that your assets are protected and you qualify for Medicaid if you need it in the future. The key to ensuring that your assets are protected is to incorporate Medicaid planning into your estate plan well ahead of your need to qualify for Medicaid benefits.
Contact North Andover Asset Protection Attorneys
If you have additional questions, please contact the North Andover trust attorneys at DeBruyckere Law Offices by calling our New Hampshire office at (603) 894-4141 or our Massachusetts office (978) 969-0331 to learn more or visit our website at https://dadlawoffices.com.
No. Medicaid now uses a five-year “look-back” period that could result in the imposition of a waiting period if you transferred assets during the five-year period prior to applying for benefits.
No. The Medicaid spousal impoverishment rules allow your community spouse to retain sufficient assets and income to live on if you need long-term care.
It is never too early to incorporate asset protection strategies in your estate plan. Medicaid’s look-back rule makes it even more important to start as early as possible.