An Introduction To Elder Law
Long-term care costs have soared over the last decade, and as a result, planning for long-term care is now a critically important issue for many middle class seniors and their families.
Why is it important in particular for middle class families to engage in long-term care planning? Lower income families will likely qualify for Medicaid, the government entitlement program that pays for long-term care. Wealthy families will not worry much about the cost of long-term care.
IF YOU ARE LIKE MOST AMERICANS THOUGH, YOU MUST ENGAGE IN PLANNING TO AVOID YOUR ESTATE BEING UNNECESSARILY SPENT DOWN WITH NOTHING LEFT FOR YOUR HEIRS.
Have you created your elder plan and Medicaid asset protection plan? Contact us today for your elder law consultation.
There are two types of planning: proactive planning (while you’re healthy) and crisis planning (when you’re about to go into a nursing home). We highly recommend that families engage in long-term care planning while they are still healthy. If you have a history of health problems in your family, then it is crucial to get started in planning as soon as possible.
Families CAN protect assets such as your home to ensure that your spouse, kids or grandkids don’t have to worry that your estate and life savings will be wiped out.
There are many people that insist that they will not need long-term care, so they simply don’t plan. By not planning, you are taking a considerable risk. Whether you need long-term care will depend on your family health history, how well you’ve taken care of yourself, and other factors that may or may not be in your control. With more and more people living into their 90’s, and even over 100 today, the odds of needing long-term care becomes more probable. Statistics show that 1 in 3 people go into a nursing home, and stay for an average of three years. Even home health care and assisted living are expensive and planning must be done.
Sadly, many people are unprepared for the significant financial burdens it places on their family’s hard earned savings. An average nursing home could cost over $100,000 a year. That’s bad enough if one spouse goes into a nursing home. What if both of you go into a nursing home?
Strategies to Manage Long-Term Care Costs
At our disposal are several strategies to protect at least part of your estate from long term care costs. Our goal is to save as much of your estate as possible from long term care costs, and qualify you for Medicaid as quickly as possible. Today, this is getting more and more difficult, as the federal and state governments clamp down on Medicaid rules.
Pennsylvania’s Medical Assistance (MA) program is their version of Medicaid. Once you have a limited amount of resources and income, you can qualify for Medical Assistance. A joint federal-state program, Medicaid provides medical assistance to low-income individuals, including those who are 65 or older, disabled or blind. Medicaid is the single largest payer of nursing home bills in America and serves as the option of last resort for people who have no other way to finance their long-term care. Although Medicaid eligibility rules vary from state to state, federal minimum standards and guidelines must be observed.
While Medicaid eligibility with respect to long-term care was not difficult in the past, there has been a steady drift towards more complex and restrictive rules, the latest being the Deficit Reduction Act of 2005 (DRA), which went into effect in 2006. These changes have resulted in complex eligibility requirements for those in need of Medicaid benefits. It’s no longer as easy as reviewing one’s bank statements. There are a myriad of regulations involving look-back periods, income caps, transfer penalties and waiting periods to plan around.
HOW TO PROTECT ASSETS – NURSING HOME ASSET PROTECTION TRUSTS
Planning over five years ahead of going into a nursing home is good practice, as it gives us time to develop long term strategies, and also make structured gifts and put certain assets into trusts. With several different strategies, we can protect a significant amount of your estate and shield it from counting against Medicaid or long-term care costs. Together, we can craft a plan today to show you how much your estate will save, and then put those steps into action. One idea is a
LONG-TERM CARE INSURANCE
Long-term care insurance is more difficult to get today, as fewer carriers offer policies. Further, the policies can be expensive. BUT IT DEPENDS. Every policy is different, and it is important to assess your facts and circumstances in deciding what type of policy you need, how much coverage you need, etc. We can help determine your need and eligibility for long term care insurance. Long-term care insurance should not be the only tool in your toolbox, as many policies will not cover entire stays. The bottom line is, you don’t want to have too little OR too much long-term care insurance.
LIFE INSURANCE WITH LONG-TERM CARE BENEFITS (ACCELERATED DEATH BENEFITS)
Did you know that there are life insurance policies today that will allow you to use part of your death benefit for long-term care? We can help you determine if these types of policies are right for you.
What if You’re About to Enter a Nursing Home?
If you enter a nursing home without having engaged in any planning, our firm can assist in maximizing the ability to save as much of your estate as possible from nursing home and long-term care costs.
We can create a SPEND DOWN PLAN for you, which will allow you to legally spend down your assets and not otherwise disqualify you for Medicaid.
Further, we can help you with MEDICAID COMPLIANT ANNUITIES so that your spouse (the “community spouse”) can receive income from certain assets.
We have several effective tools available to help you in this difficult time. Talk to us today about what we can do for you if you are in crisis planning.
Contact Us Today For A Consultation!
Planning for long-term care costs is complicated. Hire a professional who can help give you an impartial take on what you can do to maximize the savings in your estate, and minimize the burden on your loved ones. For an elder law consultation, call today at (215) 706-0200 or email us.