Assisted Living & Nursing Homes Costs: Protecting Your Assets from Reimbursement

Assisted living and nursing home costs can be extravagant, eating away at your savings, assets and the inheritance you intend to leave for your family if measures aren’t taken to protect them.

Because of the high expense of extended care, many elderly folks try to qualify for Medicaid, which will pay for those expenses. However, Medicaid requires full disclosure of your financial situation and can put an estate recovery claim on the value of certain assets after your death, including your home and other real estate.

If you foresee a possibility that you may need assisted living or a Dayton, OH nursing home, an attorney familiar with elder law can help you create a plan for protecting your assets from the costs associated with those needs. Some of these strategies are likely to be recommended for your situation:

Asset Protection Strategies for Assisted Living and Nursing Homes

  1. Place key assets, including your home, in an irrevocable trust. Make sure any income you receive from the trust is low enough not to trigger Medicaid eligibility[JF1]
  2. Give away a portion of your cash and securities to family members. Under IRS rules you can give away up to $13,000 per year before paying the gift tax. Larger amounts may be eligible to claim under the $5 million lifetime giveaway exemption if you file a 709 gift tax return with the IRS
  3. If you have a disabled child in the family, you may be able to give that home to the child and have it be protected against claim by Medicaid or a long-term care facility
  4. Buy private annuities to limit the amount that can be used to pay the costs of your nursing home or assisted living facility.

Remember that Medicaid may be able to claim the value of assets you own up to five years before entering an assisted living facility or an Ohio or Dayton nursing home. An Ohio attorney familiar with elder law can help you plan far enough ahead and may have additional strategies for asset protection if you still have unprotected assets at the time you enter a long-term care facility.