Elder law attorneys assist clients that want to prepare for financial and legal matters that are relevant to senior citizens. When you take the right steps at the right times, you can enjoy your golden years in comfort as you prepare for the twilight years that will inevitably follow.
Aging and Long-Term Care
According to the Social Security Administration, the life expectancy for a 67-year-old man is 85 years, and it is 87 years for a woman. To put this into perspective, if you expect to live long enough to collect your full Social Security benefit, this is your life expectancy.
The Alzheimer’s Association tells us that over 30 percent of the oldest old have contracted the disease, and this is not the only cause of cognitive difficulties. Unfortunately, many people with dementia require a level of care that can only be provided in a nursing home.
And of course, a lot of elders reside in nursing homes because of physical ailments. In fact, most senior citizens will need some form of paid long-term care, and it is very expensive.
Medicare does not cover the custodial care that you would receive in a nursing home, and it will not help with in-home care expenses. If you have to pay out of your own pocket, a significant portion of your legacy could be consumed by devastating nursing home costs.
Medicaid is another jointly administered federal/state government health insurance program that will cover long-term care. Since it is a need-based benefit, you cannot qualify if you have more than $2000 in countable assets in your name.
There are some assets that do not count, including your home. There is an equity limit, but it is significantly higher than the median cost of a single-family home in our service areas.
Other non-countable assets include one vehicle, wedding rings, engagement rings, heirloom jewelry, household items, and personal effects. Prepaid burial plots are exempt along with unlimited term life insurance and $1500 of whole life insurance.
When a married person is applying for Medicaid to pay for a stay in a nursing home, there are some provisions made for the healthy spouse. They can receive a Community Spouse Resource Allowance, which is half of the couple’s assets up to a limit.
Income that is earmarked for the spouse that is entering a nursing home must go toward the cost of the care that is being received. However, an exception is made when a healthy spouse is relying on the income to maintain a reasonable standard of living.
The independent spouse can continue to receive all or some of the income in the form of a Monthly Maintenance Needs Allowance.
Medicaid Estate Recovery
It may be reassuring to know that you can qualify for Medicaid as a homeowner, but this is somewhat deceiving. Yes, you can gain eligibility, but Medicaid would be required to seek reimbursement from your estate after you pass away.
If your home is in your name at the time of your death, they could place a lien on the property unless your spouse or a dependent child is living in the home.
Irrevocable Income-Only Medicaid Trust
You can convey your home and other property that would be countable into an income-only, irrevocable Medicaid trust to develop a financial profile that will lead to eligibility.
As the name would indicate, you would not be able to revoke the trust, and you would surrender access to the principal. Until and unless you apply for Medicaid, you could accept distributions of the trust’s earnings.
Timing is the key to the successful execution of this nursing home asset protection strategy. There is a five-your look back period, so you have to fund the trust at least five years before you submit your application for Medicaid.
We Are Here to Help!
Our doors are open if you are ready to work with a Memphis, TN elder law attorney to implement a plan for aging. And if you live in Arkansas or Mississippi, we are here for you, because we have attorneys that are licensed in both of these states.
You can call us right now at 901-763-2500 or 866-997-63252 or fax us at (901) 763-2525 to schedule a consultation appointment. If you would prefer to reach out electronically, you can fill out our contact form and we will get back in touch with you promptly.