Asset Protection and Accounting for Long-Term Care

An often-overlooked element of Estate Planning is ensuring you’re on good financial footing if your health becomes a bit of a handful. For more than half of Americans, that will mean paying for long-term care at an average total cost of $138,000 for a period under two years. So how best do you ensure you are prepared to shoulder the costs – and that your assets are protected along the way?

First, consider your current health, family health history, and current level of income and/or savings for retirement. The money you can save in advance of needing long-term care may affect the type of care you can afford. In Mississippi, the average monthly costs of care can run from less than $1,000 per month for Adult Day Health Care to more than $6,500 for a private room in a nursing home. Either way, saving in advance is key.

But what about those of us that just don’t have the money to cover these costs out of pocket? Long-term care insurance is available, but often individuals cannot gain coverage due to their health and the high costs of premium may bar others from signing up before they need the benefits – buying the policy early in life will help defray the costs.

Medicaid is an option, but only for those at the lower ends of the income ranges.  The monthly income limit for individuals in 2017 is $2,205.00 (before deductions) – quite low indeed.  If you think that’s low, it gets even worse if your individual resources exceed $4, 000.00. Under Medicaid eligibility guidelines, resources are assets that you own individually and/or jointly and include real and personal property. However, certain types of resources are not counted toward the $4,000.00 limit. These include:

  • Home property – one (1) home may be excluded.
  • Income-Producing property- property may be excluded if it produces a net annual return of at least 6% of the equity value.  Certain restriction exists.
  • Automobiles – up to two (2) vehicles may be excluded.
  • Household goods – these items are excluded.
  • Personal property – there is a $5,000.00 exclusion limit for personal property.
  • Life Insurance – the cash value of whole life insurance policies may be excluded if the face values of  all policies on an insured are $10,000.00 or less.  Term life insurance is not counted.
  • Burial funds & plots – burial spaces for family members are not counted.  Money set aside for burial up to $6,000.00 is not counted.

Do not even think about transferring or giving away assets attempting to qualify for Medicaid Long-Term Care. Transfers of assets is subject to 5-year look back period to determine if assets have been transferred with the intent to qualify for Medicaid. If assets have been transferred, a transfer penalty may apply whereby Medicaid will not pay the nursing facility for your care or for Home & Community Based Services (HCBS) waiver participants, you will not be eligible for Medicaid.

The result is that many middle-class and lower income people may find themselves in a difficult situation as they age. On the one hand, they may be unable to afford the long-term care they need on their own budget. On the other, they may find themselves unable to qualify for Medicaid due to the money they do have. What to do?

This is when a skilled Elder Law Attorney can truly save the day.

Through smart, legal, and ethical means, a Life Planning attorney may work with you to structure your savings and assets using methods which would allow you to qualify for Medicaid benefits, securing your long-term care, while also ensuring that as much of your wealth as possible is passed along to your loved ones or whatever charitable causes you may choose. Along with planning for your long-term care, quality counsel may also help you to plan for other life planning needs, such as establishing a living will, durable Power of Attorney, and advanced healthcare directives. A little bit of planning can go a long way.

Attorney Vangela M. Wade

Whether you’re approaching your golden years or not, saving for your care is an important step to take. Just as important is seeking the guidance of a skilled Mississippi attorney. You’ll want to be sure that your care – as well as that of your loved ones – is fully accounted for.

With more than 18 years of legal experience and focusing almost entirely in all facets of Family Law, Wills, Estates, and Life Planning, Attorney Vangela M. Wade offers representation based on a flat fee basis for many uncontested cases and affordable consultation fees. This is a great option for anyone looking to smoothly and affordably resolve his or her legal matter.

Get in touch with The Wade Law Firm, PLLC in Ridgeland, Mississippi to find out about our flat-fee solutions today.

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Posted in Estate and Life Planning, The Wade Law Firm

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