Nursing homes provide services for the elderly who cannot adequately care for themselves.
However, the cost of a nursing home is steep, especially if you have to stay there long-term. Many individuals believe that Medicare will pay for nursing home costs and expenses, but there are limitations. While Medicaid can cover nursing home care, unfortunately, to qualify you must be below set income and resource limits. Fortunately, with careful planning, you can avoid using all of your assets to pay for your nursing home stay. The following are some steps you can take to create plan to manage how are spent if you need to enter into a nursing home. Some important things to consider in plan creation include:
- It is also important to understand HOW assets are owned – Individually, Jointly with Rights of Survivorship, Tenants in Common, Tenants by the Entirety. Medicaid honors ownership rights for some assets and disregards in other cases when determining “Countable Resources. (learn more about Countable Resources)”
- The effect of gifting of assets to another person without an appropriate plan. IRS rules allow gifting without tax implications (actually, substantially more than what most people realize). However, tax implications and Medicaid implications are not the same thing. An “IRS safe” gift within five years of an Medicaid application, can cause a penalty period calculated based on the amount of the gift.
- One common “plan,” which does not meet Medicaid rules, but for some reason is still believed to be an option, is to transfer a house to a child or another person prior to filing a Medicaid application. If real property is transferred for less than fair market value (FMV), the FMV shortfall will cause a substantial penalty period. A penalty period is the time that Medicaid calculates for a transfer(s) of assets which requires a person to pay his/her own expenses in a nursing home before Medicaid will make any payments toward care.
- A strategic plan to distribute, convert, or manage spending of assets to limit penalty and private pay window.
Valparaiso Elder Law & Estate Planning Lawyers
No one wants to spend a significant amount of time in a nursing home. However, the reality is that it can happen to you. People are living longer and an increasing number will long-term-level of care. Thus, you will want to plan, well in advance, how you might pay for nursing home expenses, and how you intend to protect your assets from these expenses. If you need assistance with these complicated legal matters, an experienced Indiana Elder Law and Estate Planning Lawyer can advise you of any options you might have, and help you plan for the future. Call RG Skadberg, our knowledgeable Indiana Elder Law and Estate Planning Lawyer, at Carr, Chelovich, Skadberg, & Kazmierczak, LLC today at (219) 200-3902 or fill out the form to the righ to schedule your free consultation.