1) Make sure that you have powerful powers of attorney.
A standard power of attorney is weak at best. For example, they do not authorize the transfer of assets in order to qualify for public benefits. The ability to transfer assets to a spouse or caregiver child is an important consideration but must be done with the advice of counsel so as not to incur Medicaid penalties.
2) Know exactly when to apply for Medicaid, Social Security, Medicare, or VA Benefits.
If you panic and apply too early, it may be unnecessary because assets have not yet been adequately repositioned to open the way toward eligibility for government benefits. If you apply too late you may end up spending down to asset levels that are far below what the government will otherwise allow you to keep. This is especially true in the situation of a married couple.
3) Avoid the hidden traps of traditional estate planning, wills, and revocable living trusts when it comes to long-term care plans.
In the case of a married couple, traditional wills and trusts will cause all assets to transfer from one spouse to the other spouse upon the death of the first spouse. If, however, at the time of the death of the first spouse, the surviving spouse is in a nursing home or another form of long-term care, then we are inadvertently jamming assets into the estate of the surviving spouse, only see them spend down the cost of long-term care in nursing home. This could have been avoided by transferring the assets on the death of the first spouse to a specially approved Medicaid trust for the benefit of the surviving spouse.
4) Act before you lose the mental capacity to act with regard to your property, financial or health matters.
It’s best to hammer things out five years in advance of when you anticipate needing home care or nursing home care. If you don’t have five years, there may still be time to devise a crisis plan.
5) Be careful how you transfer assets to caregivers, whether they’re family members, friends, professionals, or institutions.
Without taking the necessary precautions, you could unnecessarily forfeit some or all of your hard-earned savings. On the flip side, you may create an unnecessary tax burden for yourself or someone you care about.
6) Take advantage of the favorable, but limited, provisions allowed by law for transfers to spouses, certain children, and certain family members.
For example, if you transfer the house to a caregiver child during the time that the senior is living at home with the child, you’ve lost the opportunity to take advantage of the caregiver child exception. The caregiver child exception allows the transfer of the residence to the caregiver child upon the senior entering long-term care. This is a huge savings for the senior and the child but it must be done with the advice of counsel.
7) Start your search now for the right hospital, rehab facility, nursing home, assisted living, or home care agency. Take the time to familiarize yourself with the contract.
Too many families wait until it’s too late to make the choice, sign the contract in a rush, and then spend months or even years regretting their decision.
As always, a good elder care lawyer can help you navigate the treacherous waters between you and long-term care, and help you make it safely to shore.