Learn how an irrevocable trust can avoid taxes, protect property from creditors, and preserve property if Medicaid or other government benefits become desirable. Pick another answer! An irrevocable living trust can provide benefits not available with a revocable trust. Not necessarily! Put your house in a trust to get it out of your name and leave it to you daughter if you own your home. Instead, they must reduce by a percentage of their overall assets. If you transfer assets or set up a trust for a disabled or blind child, those funds are exempt from the Medicaid lookback provision. Establishing a trust for a disabled individual 65 years or younger, even if the trust is established for the Medicaid applicant. Spousal impoverishment laws prevent seizure of all liquid assets, and the patient's home remains exempt … The costs for nursing home asset protection plans depend on the circumstances. wikiHow is where trusted research and expert knowledge come together. Read these tips for protecting your assets from nursing home costs. The concept of "protecting your assets from the nursing home" generally means trying to plan for Medicaid long-term care eligibility without spending all of your own money. The monthly cost of Long-Term Care is enormous and can quickly deplete family resources. All assets are considered joint property in a marriage regardless of which spouse's name is on the asset. At Bratton Estate and Elder Care Attorneys, we know how to protect your assets from the nursing home. By transferring your home to an asset protection trust, you are no longer the owner. Are you or a family member facing substantial long-term care expenses? Guess again! Asset protection can mean different things. This article has been viewed 188,827 times. With over 25 years of financial advising experience, Jonathan is a speaker and the best-selling author of "Mindful Money: Simple Practices for Reaching Your Financial Goals and Increasing Your Happiness Dividend." The result is that certain assets—including your home, one car or truck, a burial plot, and prepaid, nonrefundable funeral costs—are protected from Medicaid. Unfortunately, many other assets—including retirement and bank accounts—are nonexempt. How are trustees named? For more help from our Legal co-author, like how to create a life estate, scroll down. At your death, the property transfers to your chosen loved one. It is never too early to begin planning for how you will pay for care, protect your assets and qualify for Medicaid. the non-institutionalized spouse) at least some of that cost must be shifted onto a third party as soon as possible. The costs for a private room in a nursing care facility average $7,698 per month—over $92,000 a year—and that's a lot of money changing hands for nursing home care. About 1.4 million Americans reside in nursing homes, and the Center for Disease Control and Prevention projects that the number of people using various long-term care services will increase from 15 million in 2000 to 27 million in 2050. If I own an LLC which employs my spouse and me, and my spouse needs to go into a skilled nursing facility, do I need to also liquidate our business? has been working with LegalZoom since 2004. You might also like. In New York, this amount is $825 a month for an individual living alone and $1,209 a month for a couple. If one spouse goes into a nursing care, for the purposes of Medicaid, the individual going into care can only have $2000 in non-exempt assets and the spouse remaining at home can keep half of the overall assets. As your parent needs long-term care, you need to consider protecting your elderly parents’ assets. How can you transfer assets so they are exempt from Medicaid's lookback provision? If the family home is an asset in the irrevocable trust and is sold while the Medicaid recipient is alive and in a nursing home, the proceeds will not count as a resource toward Medicaid eligibility. A second car might be not be exempt. Pay off debt, including the mortgage, credit cards or student loans. Try another answer... Nope! Jonathan DeYoe is a Financial Advisor and the CEO of Mindful Money, a comprehensive financial planning and retirement income planning service based in Berkeley, California. A revocable living trust will not protect your assets from a nursing home. Asset protection can mean different things. Protecting Your Assets From Nursing Home Costs. Medicaid refers to this as the look-back period. Disclaimer: Communications between you and LegalZoom are protected by our The family home if at least one of the following people live there: the spouse of the person applying for Medicaid; a child under the age of 21; a disabled child of any age; a child who lived in the home for two years and provided the Medicaid applicant with in-home care; or a brother or sister who are partial owners of the house. Although a person’s home is not usually counted as an asset, the State usually has a claim to be paid back after the person dies and before the children or other beneficiaries receive the home. All assets of either spouse are counted, regardless of whose name the assets are in. It changes things just enough to protect your assets from nursing home costs, from issues with your children, and from the risks involved when a surviving spouse remarries. Will Medicare pay for my nursing home costs? Most seniors will need long-term care – almost 70% of people 65 and up can count on needing it at some point Everyone understands on some level that it’s expensive, but many families don’t sit down to do the math to figure out the actual numbers they should expect to pay and create a plan to make sure they can afford it. If you don't have your finances set up properly ahead of time, you could see your financial resources dwindle quickly. The government-run Medicaid program steps in to cover nursing home costs for low-income individuals, but it is the "payer of last resort." Naming you as the life tenant and a … States have differing rules on when to start the “lookback” time and some states even require children to pay for the care of their indigent parents. He also earned his Accredited Investment Fiduciary (AIF®) credential from Fi360. In some cases, assets can be structured in a manner that will ensure favourable assessment of the means tested costs. How can I prepare for the expense of a nursing home? The most upsetting cases involve healthy spouses that have essentially been impoverished as a result of the unhealthy spouse’s need for care. Jonathan has been featured in the New York Times, the Wall Street Journal, Money Tips, Mindful Magazine, and Business Insider among others. Anything over half the assets plus $2000 must be reduced in order to qualify for Medicaid. Here is […] Protect Assets from Nursing Home Costs. To shield your assets from the spend-down before you qualify for Medicaid, you will need to create an irrevocable trust. When considering how best to protect your assets from nursing home costs, you must think about how Medicaid eligibility could affect your plans. Many people will enter a nursing home during their lifetime where they will incur the average monthly cost of $13,000 for an average stay of 2 ½ years. 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