When you hear about the long-term care issues that we have in the United States, you immediately recognize why Medicaid can be relevant to you, even if you have never been financially needy. Let’s look at the facts.
The majority of elders will someday need help with their activities of daily living. Many will reside in long-term care communities and nursing homes. These facilities are extremely expensive. We practice law in North Dakota, and the median annual charge for a private room in a nursing home in our state is almost $105,000 according to a Genworth Financial survey.
This survey predicts a seven percent per year growth in the costs over the next five years, so the figures will probably be significantly higher if you need long-term care in 20 or 25 years.
Medicare does not pay for long-term care, but if you can qualify for Medicaid, you have found a solution. Medicaid does pay for long-term custodial care.
You cannot qualify for Medicaid if you have significant resources in your own name. For an individual applicant, the limit on countable assets is $2000. However, some things that you own, like your personal effects, household goods, and your wedding and engagement rings are not countable.
Your home is not considered to be a countable asset, but a Medicaid lien could be placed on the home after your passing if it was in your direct personal possession at the time of your death.
Plus, if you are married and you are applying for Medicaid to pay for long-term care, your spouse could keep half of the shared assets that are considered to be countable up to a certain prescribed limit. In North Dakota, the limit is $119,220 in 2015.
When you hear all of these facts, you may naturally assume that you can just give gifts to your loved ones if you ever find out that you need long-term care, and you can then qualify for Medicaid. You would essentially be giving them their inheritances in advance.
This can be done, but you have to be cognizant of the five-year look-back. Any divestitures must be completed at least five years before you submit your application for Medicaid coverage. If you violate this look-back, you are penalized, and your eligibility is delayed.
Our Firm Can Help
You should be proactive about the implementation of a nursing home asset protection strategy if you want to be certain that your legacy is preserved for the benefit of your loved ones. If you are ready to get started, our firm can help.
Send us a message through the following link to set up a no obligation consultation: Grand Forks ND Elder Law Attorneys.