The Five Year Look Back - Keeping Assets in the Family

I am often asked about the 5 year look back period as it relates to nursing home costs. Will the nursing home take all of a person's assets? Can assets be transferred before a person has to go to a nursing home?

In order to qualify for state funding of one's nursing home expense, you either have to have no assets or spend down your assets. There are some permissible spend down, ie. prepaid funeral, home repair but the biggest one is paying for nursing home cost. Once you have paid for the nursing home care for a period of time, most assets are depleted. Some assets are protected if you are married and your spouse is not in a nursing home. If you are single, there is little that can be done unless you have planned ahead of time and transferred assets at least 5 years prior to going into a nursing home.

That is why planning now is so important. Leave your comments or contact us at http://www.ythlaw.com/

Tax Incentives and Long-term Care Insurance

I have discussed the importance of having long-term care insurance. Since we are now living longer, healthcare issues have become more prevalent. Over time the cost can be exuberant and consume all of the family's assets. A previous survey of the Health Insurance Association of America revealed that 48% of those turning age 65 will make use of a nursing home and and 72% will use home care. Long-term care insurance covers the costs of a nursing home, assisted living and home care depending upon the coverage your purchase.

Tax laws at the federal and state levels provide incentives for individuals and businesses to purchase qualified long-term care insruance policies, with the goal of decreasing reliance on Medicare and Medicaid both of which may experience capacity issues in the future.

Browse some of my other blogs on this topic to educate yourself on your needs and your next steps. Leave your comments here or contact us at www.ythlaw.com

Elder Law - Medicaid

Nursing home cost can deplete the resources of most people who find themselves in need of full time nursing care. When you can no longer afford the cost of such care, many have to rely on Medicaid.

Unlike Medicare, Medicaid is not an entitlement program. You have to qualify for Medicaid. Since Medicaid is for those with low income or for the indigent, you can only have minimum assets. Assets can be transferred to others; however, this transfer must be made well before you apply for Medicaid coverage. There is a 5 year look back period for transfer of assets. If assets have been transferred within 5 years of applying for Medicaid, you may be ineligible for a period of time based upon the value of the transferred assets. There are some options available.

For a married couple, there are options available to provide support to the spouse. The spouse who is not in the nursing home is referred to as the community spouse and is entitled to a monthly maintenance needs allowance. Income from the spouse qualifying for nursing home care can be used to supplement the community spouse’s income so that the spouse does not become improvised. In addition, the community spouse is entitled to a resource allowance that would represent a certain part of the total resources of the couple. This includes certain types of annuities, cash, checking accounts, savings accounts, stocks, bonds, CDs, and the retirement plans of the nursing home eligible spouse. If eligibility is still an issue after considering the community spouse's monthly maintenance needs allowance and spousal allowance, then you may have to consider spending down some of the assets to qualify for medical assistance.

The following is a list of the type of items available for spend down:
· purchase clothing or medical equipment
· pay off debts
· prepay funeral and burial expenses
· take a vacation
· make home improvements and repairs
· upgrade the car
Further, there are assets that are specifically excluded as resources for purposes of Medicaid eligibility. The community spouse does not have to include any of the following items when applying for Medicaid for the spouse in need of nursing home care:
· The primary residence is an excluded resource. If you are not married, the house could still be excluded as a resource if you intend to return to the home. However, if the equity in the home exceeds $ 500,000 (in Pennsylvania, may be higher in other states), whether married or not, you would not be eligible for medical assistance, Medicaid. If the community spouse intends to continue to reside in the home then the equity limit is not applicable.
· One car is an excluded asset.
· Household goods and personal effects are excluded.
· Pension funds of the community spouse, Mary, are excluded.
· Certain qualified annuity purchases are excluded.
Even if you do not currently need nursing home care, now is the best time to seek advice from an attorney and have a plan.

Our firm can help. Leave a comment or contact us at http://www.ythlaw.com/ You will be glad you did.

Nursing Home Care

I was having lunch today with new acquaintances. When they found out I was an estate planning attorney, one mentioned that she soon would be needing my services. Of course the title of my new book came to mind and I said Stop! What are you Waiting for? the time for estate planning is now. This concept is easy enough to grasp but what followed was a specific example to make it more relevant. The other person in our luncheon party mentioned that his mother was just released from the hospital to a nursing home. She was a bit disoriented and needed to address some financial matters. He realized then the importance of having a Power of Attorney to handle these affairs during her hospitalization. She is now at a nursing home and a decision will have to be made whether she will have the capacity to return to her home or have to stay with nursing home care. With both her healthcare power of attorney and general power of attorney for financial matters, he can begin to make decisions to help his mother. At any given time, I have found many examples where planning ahead made all the difference in whether a person gets what they need when they need it. I encourage everyone to plan, now.