As elder law attorneys, we focus on matters that are related to the needs of senior citizens. Most of our efforts are devoted to long-term care and the costs that go along with it. In this post, we will share five key facts about the subject that will get your attention if you are unaware of the dynamic.
Medicare won’t help.
For the most part, Medicare is a health insurance program that is specifically designed for senior citizens. It is natural to assume that it would cover long-term care since many elders need help with their activities of daily living. Whether it makes sense or not, in fact, Medicare does not cover custodial care. This is the type of care you would receive in a nursing home, and there are in-home caregivers as well.
Most seniors will need paid living assistance.
Everyone knows that some elders need help with their day-to-day needs, but it can be hard to envision yourself in this situation. At the same time, it may seem quite a bit different when you are in your eighties.
In fact, according to the United States Department of Health and Human Services, most seniors will incur long-term care expenses. Over half will receive the bills for more than a year, and 13 percent of people that need paid care receive the assistance for more than five years.
Long-term care is expensive.
The median charge for a month in a private room in a Hartford area nursing home was almost $15,000 last year. For an in-home health aide, you are looking at over $5,500 a month.
Medicaid can provide a solution.
All the above paints a pretty grim picture, but fortunately, there is a potential solution in the form of Medicaid. It will cover long-term care if you can gain eligibility, but there is a $1,600 asset limit in Connecticut.
Some things do not count, including your personal effects, household items, one vehicle, wedding and engagement rings, and term life insurance. You can have $1,500 of whole life insurance and the same amount saved for final expenses.
Your home is not counted with an equity limit of $955,000, but there is another consideration. There is a Medicaid estate recovery mandate, so they can place a lien on your home if it was in your possession at the time of your passing.
To prepare for Medicaid eligibility in the future, you can establish and fund an irrevocable, income only trust. You no longer have access to the principal, but you can accept distributions of the trust’s earnings.
As long as you fund the trust at least five years before you apply for Medicaid, the principal will not count. If you apply for Medicaid less than five years after you fund the trust, you will be ineligible. The period of ineligibility is based on the amount that you transferred out of your name. For example, if it would have paid for two years of nursing home care, your eligibility would be delayed by two years.
We can help you develop a nursing home asset protection plan.
A lot of people rely on the income they receive from their investments. Establishing the right type of trust can give you the ability to continue along this path. This is the general idea, but the exact details will depend on the circumstances. Plus, this is just one aspect of a well-constructed estate plan.
We can work with you to develop an approach that is ideal for you and your family. To set the wheels in motion, call us at 860-548-1000 schedule an appointment at our Glastonbury or Westport, CT elder law and estate planning offices. If you would rather reach out electronically, fill out our contact form and we will get back in touch with you promptly.
Mr. McCann is licensed to practice before the courts of the State of Connecticut. He is a member of the American Academy of Estate Planning Attorneys.
Mr. McCann provides to his clients, trust and estate planning, and trust and estate administration services. Formerly, Mr. McCann was an adjunct professor of economics in the State of Connecticut Community College system, and a Commissioner of the Town of Simsbury Zoning Board of Appeals.