Minimizing the cost of long-term care requires a strategy that takes into account the intricacies of estate planning and government benefits, and the strategy you chose depends on the mode you’re in: Preplanning, Wait-and-See or Crisis.
Preplanning can be done when there is no imminent threat of a long-term care. Wait-and-See Mode exists when there is a diagnosis but the senior will not be leaving home in the near term. Crisis Mode occurs when the senior is either in or soon to be in a nursing home.
In Preplanning Mode, because time is on our side, we can engage in such strategies as looking for long-term care insurance to cover all, or part of, the cost of long-term care. Perhaps a long-term irrevocable trust that will put assets outside of the estate may be useful. Sometimes purchasing certain types of assets that are exempt non-countable is advisable.
In Wait-and-See Mode, because there is often a diagnosis, good powers of attorney for health and property and the preparation of wills and trusts that bypass the ill senior are essential. Also, changing the beneficiary designations on various assets so that they do not pass automatically on the death of the healthy spouse to the ill spouse is another consideration. It even may be possible, at this point, for the healthy spouse to obtain long-term care insurance.
In Crisis Mode, it is essential that the ill senior be made eligible for Medicaid in order to cut the costs of long-term care. The only way a senior can be eligible is to be at an asset level of no more than $2,000, exempting non-countable assets like prepaid burial arrangements, personal effects, very small life insurance policies, and limited other resources. All other assets must be converted to a non-countable status. This is not always possible, so quite often it is necessary in crisis mode to transfer assets from the senior. You must understand that this will result in a period of ineligibility for the senior. However, with the assistance of competent elder law counsel who specializes in Medicaid asset protection planning, it is possible to transfer assets while at the same time retaining enough assets in a form that will allow the penalty period to be paid down and the transferred assets to be protected.
Selecting a strategy for asset protection planning in long-term care is not an easy matter, but with the proper planning our office does it all the time. It is essential that Medicaid rules be followed strictly. This sounds like a challenging task, and it is, but the alternative of not selecting a strategy to protect assets from long-term care costs results in the impoverishment of seniors at a time in their life when they should not be destitute for such simple quality of life items as hearing aids, eyeglasses, podiatry care, medications and certain therapies not covered by Medicaid.
Plan ahead: It’s your quality of life that is at stake in your senior years.
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