How to Protect Assets from the Nursing Home

Thousands of Americans need nursing home care every year. Many need this focused care because they are struggling with end of life illnesses or conditions that require constant skilled supervision.

Nursing home care can be vital to preserving quality of life in a person’s final days or even years, but it can also be expensive. Medicare pays only limited benefits for skilled nursing care, and Medicaid is only available to those who fall under certain asset and/or income limits.

How can you protect your assets for your loved ones from being spent entirely on nursing home care? There are several options. Some of the most popular strategies include:

Creating a Medicaid Asset Protection Trust ("MAPT")

A MAPT holds assets for the benefit of those you name as a beneficiary. It is possible to give the Trustmaker(s) the power to change the death beneficiaries during the Trustmaker(s) lifetime.

There are certain drawbacks to using a MAPT to protect your assets if you go into a nursing home. For instance, you cannot have any access to the principal in the trust, only to the income it makes (if any). If you can access the principal, it will be considered a countable resource and will be required to be used to pay your nursing home bills.

Your Principal Residence

Your primary place of residence is only temporarily exempt (13 months in Ohio) from most rules pertaining to assets and nursing homes. It is totally exempt if your spouse still lives in it. If you apply for Medicaid to help pay the cost of nursing home care, the value of your home is not considered in your Medicaid application for the first 13 months. However, it will have to be put up for sale thereafter. Further, after your death the house will be sold to reimburse Medicaid (unless you have a surviving spouse or disabled child living in it). Consequently, it is common to transfer the house to a MAPT five years before ever applying for Medicaid. This makes it an exempt asset.

Long-Term Care Insurance

Long-term care insurance can also be an option, when combined with other assets, for meeting the costs of nursing home care. To benefit most from a long-term care insurance plan, you’ll need to choose one that meets your needs, that is affordable, and that “fits” with the assets and plans you already have. Your attorney can help. Gudorf Law Group works with Ohio families to protect their assets from being consumed by nursing home care costs. Call us at 1-937-898-5583 for a private consultation about what strategic steps you can take now to guard against future problems.