Nursing home asset protection is something everyone should take seriously. Most seniors in the United States will need custodial care eventually, and Medicare will not pay for this type of care. Medicare will pay for costs associated with recovery after an illness or injury, but it does not pay for long-term living assistance.
Since nursing homes are very expensive, you could lose everything that you intended to leave to your loved ones if you have to pay out-of-pocket. This is not a very appealing prospect, but there is a solution that is widely embraced.
Medicaid is another government health insurance program. You cannot qualify for Medicaid if you have significant resources, and you would not need the coverage if you have Medicare when you retire. However, many seniors who did qualify for Medicare ultimately seek Medicaid coverage, because Medicaid will pay for long-term care.
There are income and asset limits that you must stay within to qualify for Medicaid. The limit on countable assets is $2000 for an individual, but we should point out the fact that your home is not considered to be a countable asset.
A nursing home asset protection strategy would involve a divestiture of assets. You could give assets to your loved ones before you apply for Medicaid coverage.
Direct gift giving is a possibility, but there is another option if you are looking for nursing home asset protection. You could convey resources into a Medicaid trust. Once you fund the trust, the assets would not be counted against you by Medicaid, as long as you apply for coverage at least five years after you fund the trust.
We should point out the fact that you could create an income only Medicaid trust. You would be removing the assets from your own name for nursing home asset protection purposes, but you could continue to receive income from the trust’s earnings.
Every type of trust would not provide nursing home asset protection. Medicaid trusts are irrevocable trusts. You surrender control of assets that you convey into this type of trust.
There is another type of trust called a revocable living trust. Since you can revoke or dissolve this type of trust, assets in the trust would be counted when Medicaid was determining your eligibility status.
Learn More About Nursing Home Asset Protection
If you would like to delve into the subject further, we have a resource that you can access through this website free of charge. Our firm has prepared a special report on Medicaid planning, and it will answer most of your questions and provide you with a solid foundation of information to build on.
To get your copy of the report, visit this page: Grand Forks ND Medicaid Planning.