How To Plan For The Nursing Home?

If your family member is in a nursing home, it can be painful to watch them lose all their assets and income. For married couples this becomes even more devastating because you still need those resources at home for yourself too! There are strategies that will protect what they have left so they don't get taken care of first before us -- like getting an advanced plan or setting up different kinds of Trusts.

Watch Ted Gudorf from Gudorf Law Group, LLC explain more about how you can protect your hard earned assets from being completed depleted by nursing home cost.

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Video Transcript

Hi there, this is Ted Gudorf from Gudorf Law Group. Today I want to talk to you about crisis Medicaid planning. Oftentimes, here at Gudorf Law Group, the phone will ring will answer it, and it will be a son or a daughter that says, I just dropped my mom off at the nursing home. Is there any chance we can save any money by doing planning? And the answer is yes, we can do what is called crisis Medicaid planning.

How does that work?

Well, for somebody who has not done any preplanning, and are in crisis, the overall goal will be to try to save as much money as is possible. Typically, we can say 50% of what a client's assets are that are remaining, even though they're in a nursing home.

How does it work? Well, Medicaid says that in order to be eligible, if you're a single person, you're not allowed to have more than $2,000 worth of assets. Rules are different. If you're a married couple, you're a married couple, and both of you are in a facility and want to go on Medicaid, you can't have more than $3,000.

On the other hand, if we have a married couple, and one of you need care, and there is a spouse at home that we call the community spouse, the spouse at home is allowed to keep the house, the car, and roughly $130,000 plus all of their income. And to the extent that the spouse at home has more than that.

They have to, quote spend down and the issue will become how do we spend down? So fundamental rules are, you're not allowed to have more than $2,000 in your name. But the law will allow a client in order to go on Medicaid to do Medicaid planning.

And how does that typically work? Well, elder law attorneys have a phrase called spend down, that simply means we're going to do what they term a half loaf plan. So what Medicaid will allow us to do is to identify all of the client's assets, as well as their income and develop a plan to create a trust of one type or another and transfer roughly half of a person's assets into that trust, then we take the other half of the assets and typically will either purchase a Medicaid qualified annuity, or put money in a pooled trust account one way or the other.

Where we will utilize those funds to pay for the nursing home bill in an effort to protect the other half that we've put in the trust. So that half love type planning will generally result in saving roughly 50% of a person's assets, the amount of assets that can be preserved or protected, will depend in part on the amount of income the person has, as well as the cost of care at the facility. All of that will have some impact.

The bottom line is that if you find yourself to be in crisis, or have a loved one who is in crisis, and is burning up their money, don't rely upon the nursing home to tell you that you can do Medicaid crisis planning and save half of what you have left. In fact, what most of our local nursing homes are telling people is you can't do anything, you can't do any planning other than give them all of your money. And after all that money's gone, then they will apply for Medicaid for you.

But here at Gudorf Law Group we will help you create the plan. We'll devise the plan and will implement the plan. We'll even file the Medicaid application for you and make sure that you qualify. So Medicaid crisis planning is difficult, complicated, but we're here to help and we can help you put together a plan feel free to give Gudorf Law Group call. Thank you for being with us today. I hope you found this useful