You’ve worked hard your entire life saving up, paying down your mortgage and other liabilities, and building a sizable retirement fund. You did all of this expecting to live off those savings while you bask in the proverbial glow of retirement’s “golden years.” However, life throws a wrench in your plans and you suddenly suffer a stroke at the age of 72 and require full-time care in a nursing home. This presents the daunting prospect of having to spend through your life’s savings just to cover the nursing home costs. In the St. Louis area, depending on the extent of care you need, the cost of a nursing home is between $65,000 and $120,000 per year.
Many Americans pay for nursing home care via savings until those are exhausted. From that point, they can qualify to have the costs covered by Medicaid. However, there is a better strategy available – careful planning now with the objective of protecting your estate for your spouse and kids. This can be accomplished through purchasing quality long-term care insurance, setting up your estate plan correctly, and applying for Medicaid benefits at the appropriate time.
Unfortunately, many people fail to take the necessary steps to plan for long-term care which results in their entire savings being spent solely on medical care, rather than leaving behind a sizable estate for their loved ones.
Do not make that mistake, or the six costly mistakes described below.
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Putting off planning because you think it is too late for you.
It’s almost never too late to take planning steps, even after a senior has moved to a nursing home.
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Giving away certain assets at the wrong time.
Do not put your financial well-being in jeopardy by quickly transferring the majority of your assets to your children or another loved one. Impulsive transfers can result in issues with state and federal taxes and Medicaid planning.
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Failing to properly utilize specific transfers that do not harm Medicaid eligibility.
There are an array of asset transfers that Congress has deemed to be perfectly appropriate without effecting your eligibility for Medicaid. For example, you can transfer assets to a disabled child, to your caretaker, certain siblings, or into a trust if you become disabled under the age of 65. You can also transfer to a “pay-back” trust if you are younger than age 65 or transfer assets to a pooled disability trust, regardless of your age.
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Not taking advantage of protections available to the spouse of someone placed into a long-term care facility.
If you become disabled and require placement in a long-term care facility, there are important protections that can be sought for your spouse. This includes purchasing an immediate annuity, petitioning for an increased community spouse resource allowance, and/or petitioning for an increased income allowance.
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Applying for Medicaid at the wrong time.
Whether you apply too early or too late, this mistake can result in a longer ineligibility period in some instances and could cost you a lot of money.
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Not speaking to a trust and estate planning attorney.
As you can see, Medicaid planning is complicated and it is critical that your plan is tailored to your specific situation. There are probably tens, or even hundreds of thousands of dollars at stake that you worked hard for over the years. The cost to properly plan is relatively low, especially when compared to the savings you can achieve if you or a loved one requires long-term care.
St. Charles Trust and Estate Planning Attorney Ready to Help
Planning for long-term care can be a confusing and daunting process. It is advisable to enlist the help of a law firm that focuses on estate planning, and who has the experience necessary to help you navigate the confusing world of elder care planning. We are here to help. Polaris Law Group takes pride in offering an effective, full-service experience to our clients. If you want to ensure that you and your family are properly cared for, contact Polaris Law Group’s experienced trust and estate attorneys, Scott Stork and Raymond Chandler today. Schedule a meeting by phone or by filling out a quick contact form today.
