When you are planning for your future, you need to understand the financial aspects of every decision that you make. You need to know how much your plans and the care you will require will cost. You also need to know how to pay for these things, while still protecting your assets, so that way, you can provide for your surviving spouse or your loved ones, after you die.
This requires the assistance of an experienced elder law and estate planning attorney, who understands the complex nature of your unique situation. They are willing to work with you, so that your future is secure and your long-term care is planned out.
For many, where you will live and how you will pay for it are two grave concerns that highlight the uncertainty of a future without a plan. For one man, the costs of nursing home care did not compare to the lower costs he decided to pay in other accommodations.
According to Fox59 WXIN in Indianapolis, a man in Lynchburg, Va. decided that staying in a Holiday Inn was preferential to spending his days in a nursing home, where the costs are higher.
Virginian Terry Robison decided that the math on staying in a hotel versus staying in a nursing home was too good to pass up. He said that the average cost of a nursing home is $188 a day, while a long-term stay with a senior discount at the hotel of his choice costs $59.23 a night.
He also enjoys the fact that the hotel always has free breakfast and that some also offer happy hour. According to him, the idea would leave him more than $120 a day to spend on laundry, meals, and tips for the hotel staff.
With the staff cleaning his room and the hotel offering maintenance and complementary toiletries, Robison can cut down on his costs. As a resident of the hotel, security personnel at night and room service also is available to him.
In addition, Robison has stated that if he wants a change of scenery, he can stay at the same hotel in a different city. The staff of this hotel chain also will check on him to make sure he is alright. He also is not worried about visits from family.
“They will always be glad to find you, and probably check in for a few days mini-vacation,” he wrote on Instagram. “The grandkids can use the pool. What more could I ask for?”
These costs are a reality for more than just Robison. According to the Center for Disease Control, of the approximately 9 million people served long-term care services, 1,369700 people were residing in 15,600 nursing homes in 2014 in the United States.
These individuals each have unique sets of circumstances and are at different income levels. They each may have dependents counting on them to continue to provide for them, most presumably would prefer to preserve their assets to the best of their abilities.
The wonders of Medicaid
If you are a senior facing these circumstances, applying for Medicaid may be the solution that you need. Medicaid is a federal-state program that provides medical assistance to low-income individuals, including senior citizens (ages 65 or older). It is the largest payer of nursing home bills in the United States, and the requirements for eligibility vary by state.
Planning for Medicaid can help you meet state and federal qualifications. Many states only count the income and assets legally available to you for paying bills, so Medicaid planning with an elder law attorney helps you come up with methods to make your income and assets inaccessible.
Exempt assets are compiled on a list by each state, based on federal guidelines. These are things like prepaid burial plots, the family home, one automobile, and term life insurance.
The benefits of Medicaid planning
It is possible to trade countable assets for exempt assets or make them inaccessible to the state. For example, the money used to pay for nursing home bills could be used to pay off a mortgage or purchase a vehicle for a healthy spouse.
You also can establish an irrevocable trust, in order to preserve assets for your loved ones and avoid liquidating all of your assets to cover nursing home care. Property placed in an irrevocable trust is excluded from your financial picture, and as a result, it is not considered a countable asset when determining Medicaid eligibility.
Through the naming of a proper beneficiary, the principal deposited into the trust is sheltered from the state and preserved for your heirs. However, the terms of an irrevocable trust cannot be changed if you decide to end it, and the trust must be established and funded for a specific time period for the strategy to be effective.
You also can tie up assets in an annuity. When the state considers whether one spouse is eligible for Medicaid, the couple’s assets are pooled, but the healthy spouse is allowed to keep a spouse resource allowance that typically amounts to half of the couple’s total assets. This is annuity.
The healthy spouse also has the option to utilize the jointly-owned countable assets to purchase a single premium immediate annuity. By converting countable assets into an income stream, each spouse can keep all of his or her income, rather than pooling their assets. The spouse receiving treatment or nursing home care can qualify for Medicaid, while the healthy spouse still has a stream of steady income.
There are drawbacks to Medicaid, as well as potential look-back periods, estate recoveries, and disqualifications, which is why it is imperative to meet with an experienced elder law and estate planning attorney who can assist in the Medicaid planning process and help you pay for your nursing home fees.