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Nolan Elder Law and Estate Planning, LLC Blog

Friday, February 17, 2017

Protecting Your Assets from Nursing Home Costs

What estate planning tools will help me to preserve my assets if I need to enter a nursing home?

An unfortunate aspect of aging is considering the possibility that you may not be able to live independently forever.  Nursing homes provide quality care for elderly individuals that suffer from a disability, physical illness, or cognitive impairment, such as Alzheimer’s disease, that prevents them from living on their own.  Over 1.3 million Americans are currently residing in nursing home care and close to half of all elderly individuals will require long-term care at some point in their lives.  

Nursing home costs have skyrocketed, and few families in Alabama can afford to pay for long-term care out of pocket. While Medicaid can assist with covering costs, it has strict requirements for eligibility.  Our Alabama estate planning lawyers at Nolan Elder Law and Estate Planning, LLC, can help you to legally structure your assets in order to qualify for Medicaid nursing home benefits without leaving you and your family impoverished.

Gifts

Gifts are one legal way to protect your assets, but they will require some advanced planning.  You will want to start making gifts at least five years before you are in need of nursing home care.  Your estate planning attorney can help you to structure gifts to your children and relatives so that they also come with tax benefits.

Trusts

With a trust, you can transfer some of your assets to a separate entity for the benefit of your named recipients.  A trust can move assets that would otherwise make you ineligible for Medicaid benefits, and it is also a wonderful way to pass your hard earned assets on to your loved ones without the need for probate.

Pay Off Your Debts and Expenses

If you have assets that could make you ineligible for Medicaid, you can use these at-risk assets to pay off existing debts or prepay large expenses, like funeral expenses.  Paying down the mortgage or car payment for the spouse that is not entering into a nursing home could have significant benefits for the family.  

Buy Assets Not Counted by Medicaid

Medicaid’s eligibility rules do not count some major assets, such as the family home and some personal effects.  In some cases, it can be appropriate to use money from a savings account that Medicaid would count to purchase assets that are allowed.  Consult with an experienced estate planning attorney before making any decisions concerning your assets as the rules behind Medicaid eligibility are complex and ever changing.


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