Long-term Asset Protection Planning
Protecting Your Assets Is our Primary Goal
The greatest financial risk that nearly all seniors in this country face is paying for long term nursing care. With the average cost in Pennsylvania over $120,000 a year, all but the very wealthiest could quickly go through much or all of their life savings merely because they had the misfortune to develop a serious chronic illness. For all practical purposes, the only government benefit program we have that will pay for long-term nursing care is Medicaid, but unlike Medicare, you have to be impoverished before you can be eligible. However, unlike what well-meaning friends may tell you, the Medicaid laws permit seniors to protect a substantial portion of their life savings from this risk. Los Scales Elder Law office, located in Erie, PA specializes in long-term care planning, which includes preparing clients to apply for Medicaid.
Los Scales Elder Law Helps Provide Options in Long-term Protection Planning
- Developing an Asset Protection Plan designed to minimize the amount of their life savings at risk of being spent down on long-term nursing care;
- Preparing any legal documents such as Wills, powers of attorney, deeds, or trusts, necessary to carry out the Plan;
- Working with our clients for as long as it takes to ensure that the Plan is successfully carried out; and
- when appropriate, preparing and filing a Medicaid application (with the voluminous required documentation), and acting as our client’s advocate with the Medicaid office.
Still not sure if you qualify? Contact us today.
Is Medicaid Planning Appropriate?
“No agency of the government has any right to complain about the fact that middle-class people confronted with desperate circumstances choose voluntarily to inflict poverty upon themselves when it is the government itself which has established the rule that poverty is a prerequisite to the receipt of government assistance in defraying the costs of ruinously expensive, but absolutely essential medical treatment.”
The Biggest Misconception about Medicaid and Nursing Homes
So please remember, it is never too late to call.
That being said, there are certainly advantages to planning ahead:
- you get your documents in place so that if you later, through accident or illness, become mentally incapacitated, you have people in place that you have selected to step in and take care of your financial and legal matters, as well as making personal and healthcare decisions for you to the extent you can’t make these for yourself;
- you increase the likelihood of protecting more of your life savings from the risk of being spent down if you later need long-term nursing care; and
- you avoid the stress of having to make decisions in a crisis situation, when every day of delay may be costing you several hundred dollars.
Protecting Your Home.
Protecting the home is one of the greatest concerns clients have when facing long-term care. If you receive long-term care Medicaid benefits during your lifetime (after age 54), the state Medicaid agency will have a claim against your estate when you die for all the benefits paid out on your behalf. Because nursing homes in Pennsylvania cost on average more than $10,000 a month, this “estate recovery claim” can quickly become quite large. If your home is in your name alone at your death, if will be in your estate and so subject to this claim.
For married couples, if one spouse is in a nursing home while the other spouse (the “community spouse”) continues to live at home, their house is only a risk if the community spouse dies first. So, if John is in the nursing home and his wife Mary is living at home, one of things we at Los Scales Law would look to do to avoid this risk is get the house into Mary’s name alone and have her make a new Will disinheriting John. (Note: If John is not mentally competent, we might not be able to protect his house unless he has a Financial Power of Attorney in place with adequate “gifting” language.)
If John is single and in the nursing home, we can usually still help protect the home, often by having him transfer a remainder interest in the home to an irrevocable trust while retaining a “life estate” for himself. This can also be a very good way to protect the home for those who are not in a crisis but who want to plan ahead to protect their house. This way of protecting the home has a number of advantages over simply putting the house in the children’s names:
- The parents remain the owners of their home with the security of always having a place to live, without the risk of losing it because of things that might happen to one of the children (such as death, divorce or debt).
- Because the parents owns only a “life estate” in their home, at their death it is automatically in the trust rather than going into the parent’s estate and is thus protected from a Medicaid estate recovery claim.
- While the transfer of a remainder interest is a gift that may result in an ineligibility period for Medicaid, it will be a much shorter period than if the entire home were transferred outright and so result in much less money having to be paid to the nursing home.
Legal strategies for protecting the home vary depending on a client’s particular situation and wishes. A qualified elder law attorney, such as those at Los Scales Elder Law, can identify the options that make the most sense for a particular client’s situation, and can draft the documents you need in order to maximize your options and give you greater peace of mind.