New York Estate Planning & Elder Law Blog
Data shows that more than 11 million Americans currently need some type of long-term care due to chronic illnesses and conditions. Statistics also show that over a million Americans reside in long-term care facilities. Over half of these residents are between the ages of 75 to 94. Many times, long-term care refers to care at locations like a home but also assisted living or hospitals. It’s a good idea to sufficiently plan for how you will receive long-term care as well as how to preserve assets you’d like to keep.
# 1 – You Have Options to Pay for Nursing Home Costs
The costs for long-term care options like nursing homes are often substantial. Potential applicants are often overwhelmed at how large these costs are. As a result, it’s often the best idea to begin planning for how to pay nursing home costs as soon as possible. Some of the options that people rely on to pay for long-term costs include:
- Government benefits. Medicare is an available option to Americans who are 65 years of age and older. To qualify, individuals must also have lived in the United States for at least five consecutive years. It’s a wise idea to remember that Medicare does not cover many types of long-term care.
- Personal funds. People often rely on their own funds to pay for assisted living care or continuing care facilities, which do not qualify for Medicare. These funds might come from retirement accounts, retirement savings, or social security.
# 2 – Make Sure to Adequately Protect Other Assets from Long-Term Care Cost
Despite the substantial costs involved with long-term care, many people are often interested in what they can do to protect other assets from being absorbed in long-term care costs. Some of the helpful steps that you can take include:
- Pass on monetary gifts to your loved ones before they get sick. There’s no way to be certain if you or will need home care, but by passing on gifts to a loved one in advance you can make sure that you pass on money before creditors can take adverse actions. Also in the case of Medicaid, remember that any assets transferred within the five years before entering a long-term care facility are subject to seizure following your death.
- Consider creating a “life estate” for any real estate you own. As a life tenant, you will hold on to the right to continue residing at a residence until after you pass away. On your death, ownership of the property will be transferred to your loved one. By creating this type of property ownership, you also face no penalty if you later enter a nursing home.
- Create an irrevocable trust. Irrevocable trusts are an attractive option because assets placed in them are exempt from nursing home costs. While you will not be able to draw the principal from the trust, you can draw dividends and interest.
Contact an Experienced Elder Law Attorney
At Ettinger Law Firm, our attorneys understand that people often have various questions about how a loved one will pay for long-term care. Contact our law office today to schedule a free case evaluation.