You probably try to keep yourself in shape so you look and feel as good as you can, but time doesn’t stand still. There is usually going to be some sense of denial about the aging process, and it is gradual, but the years pass rather quickly.
No one wants to admit that they are not capable of doing things that they used to do in the past, and you may feel as though you will always be able to manage your day-to-day needs.
Anything short of this can be viewed as “giving up,” but is this a good way to describe a sober acceptance of reality?
In spite of your best efforts, time will invariably take its toll. You may not be able to wrap your head around the prospect of life as an octogenarian, but your life expectancy is at least 85 years if you live to be 67.
When you put this into perspective and think about the implications, you may cross the psychological barrier and recognize the fact that you should take this prospect seriously.
Just over half of senior citizens will need some type of paid long-term care eventually, and 35 percent of elders will require nursing home care. You can expect to pay well over $150,000 for a year in a Manhattan nursing home, and the figure is likely to rise over the coming years.
Since Medicare exists to address the health care needs of senior citizens, and so many elders will need living assistance, you may assume that it would cover long-term care. Many people will question the fairness, but in fact, Medicare does not pay for custodial care.
Nursing Home Asset Protection
If you can come to accept the eventualities of aging, you can implement a nursing home asset protection plan to preserve your legacy. This will revolve around Medicaid eligibility, because this program will cover long-term care.
There is also a community Medicaid waiver that will pay for in-home care that is provided by a professional home health aide.
Of course, Medicaid is a need-based program, so you cannot qualify if you have significant assets in your name. Your home is not a countable asset, but a lien can be placed on it after your passing if you qualify for Medicaid as a homeowner.
To develop a financial profile that will lead to Medicaid eligibility, you could convey resources into an irrevocable, income-only Medicaid trust. As the name would indicate, you can accept distributions of the trust’s earnings, but you would have no access to the principal.
If and when you do apply for Medicaid, the assets in the trust would not count as long as you fund the trust at least five years before you apply for Medicaid coverage.
This is the look-back period for Medicaid eligibility, and a 2.5 year look-back for the Medicaid waiver will go into effect on January 1, 2022. Right now, there is no look-back period, so there is a very useful window of opportunity available for the rest of this year.
Attend a Free Estate Planning Webinar!
You found your way to this site because you are interested in learning more about estate planning and elder care topics, and you are in the right place at the right time.
Attorney S.J. Khalsa is an extraordinary educator, and he is going to apply his formidable talents in the near future. We are offering webinars on an incremental basis, and you can come away with a renewed understanding of this important process if you attend one of the sessions.
There is no charge, but we do ask that you register in advance so we can reserve your spot. You can see the dates and obtain registration information if you visit our New York City estate planning webinar page.
Need Help Now?
If you have already learned enough to know that it is time for you to work with an attorney to put a plan in place, our doors are open. You can send us a message to request a consultation appointment, and we can be reached by phone at 212-973-0100.
- Roth IRAs Can Be a Great Planning Strategy: Advanced - September 15, 2021
- Roth IRAs Can Be a Great Planning Strategy: Basics - September 8, 2021
- Taxation of Nongrantor Trusts - September 1, 2021