By The Law Offices of David L. Orosz –
“How can I plan for a possible future nursing home stay while I am now healthy?” In other words, “How can I plan to avoid a possible nursing home spend-down?” This is the question I most often hear from clients and at seminars.
The answers are simple:
- Purchase Long Term Care Insurance;
- Do Nothing; and
- Adopt a Basic Asset Protector Program. Of these options, 95% of the people who read or hear this message will choose 3) because they know that a nursing home stay is not in their future – maybe for the neighbor next door or down the street – but not for them! However, if you happen to become a member of the 5% group, this brief discussion of the other three well known options are for you.
Long Term Care Insurance:
Whenever most middle income retired folks consider this insurance, they are generally faced with a personal budget choice: buy Long Term Care Insurance and forget about ever taking another cruise or vacation trip.
Most people have heard about the Medicaid Regulation called the “Look-Back Rule.” The basic effect of the Rule as it relates to preplanning is that you can give away all of your countable and exposed assets, usually to child(ren) or to a specially designed trust, and wait for the next 60 months for the rule to expire. You will then have the comfort of knowing that you will immediately be eligible for Medicaid assistance if needed. For many who adopt this strategy, the night before so doing is the last good night of sleep that they will experience!
The Best of Both:
Where possible, place all exposed assets into a specially designed trust with the trust purchasing a 5-year benefit Long Term Care contract with a monthly benefit equal to the amount between your fixed income and the monthly cost of nursing home care. Then, on the yearly anniversary date, you drop the benefit period by one year until you zero-out the contract at the end of the 5-year period, at which time, or thereafter, if you are in or near a nursing home stay, you are eligible for Medicaid. This preplanning technique would also provide “home health care and assisted living facility” benefits during the 5-year look-back period and possibly into the future.
The Basic Asset Protector Program:
The following recommendations comprise my bottom-line survival program that every Senior Citizen should have in place right now!
1. Durable Power of Attorney with Health Care Surrogate Provisions:
This document is more important than a Will or any Living Trust and because it is “Durable” it will continue to be effective should you ever become incapacitated. A Living Trust will help avoid Probate but is generally of neutral value in Medicaid preplanning.
2. Transfers of Residence:
In Florida, your residence is and remains exempt from all creditors, and if that property has been transferred to your Living Trust, probate will be avoided upon death. Also in Florida, if you do not have a Living Trust, there is a specially designed life estate deed that can be used to transfer your residence to your child(ren) while you are living while reserving the full rights to sell that property during your lifetime.
3. New Wills:
Whenever one spouse enters a nursing home and Medicaid eligibility is established, the well spouse at home needs to change his/her Will in the event the at-home spouse dies first. Otherwise, all of the couple’s assets would revert to the spouse in the nursing home causing immediate Medicaid ineligibility.
4. The Ultimate Trust and Care Contract Package:
Over the past 20 years of my practice, exclusively in the area of Asset Protection and Medicaid Eligibility and as an Accredited VA Attorney, I have developed a total planning technique that not only answers all of the forgoing issues discussed above, but will also, without exception, result in immediate Medicaid and VA long term care benefits eligibility along with 100% protection of the client’s exposed assets.
Law Offices of David L. Orosz
5237 Summerlin Commons Blvd.
Ft. Myers, FL 33907