It can be hard to wrap your head around the thought of not being able to handle all of your own activities of daily living without help from others. At the same time, when you were five years old, you probably had a tough time imagining yourself being old enough to drive a car.
You should apply the same principle to the eventualities that you may face as an elder, and the statistics paint a picture that is hard to ignore when it comes to living assistance.
Probability vs. Possibility
Everyone knows that some elders need help with their day-to-day needs, but you may look at it as a possibility rather than a probability. In fact, seven out of every 10 seniors will need living assistance, and 35 percent of seniors will require nursing home care.
A lot of people assume that they don’t have to worry about nursing home costs because they will qualify for Medicare when they are seniors. In fact, Medicare will pay for convalescent care when the patient is expected to recover, but it does not cover the custodial care that nursing homes provide.
NYC Long-Term Care Costs
Genworth Financial is a company that sells financial products for senior citizens with an emphasis on long-term care. Since this is their demographic, they compile detailed statistics to get a feel for the state of long-term care costs around the country.
Since it takes time for them to accumulate a massive amount of data, their most recent figures are for 2021, though we should be able to share the 2022 updated numbers in the near future.
In Manhattan, the median annual charge for a private room was $158,775 during that year. They also project outward looking ahead to the future. Their median estimate for a private room in 2031 is $213,380.
These expenses can add up, and if you are married, your family may be forced to address two different sets of nursing home bills.
Nursing Home Asset Protection
It doesn’t take a math major to come to the conclusion that nursing home costs could have a heavy impact on your legacy if you have to pay them out of pocket. Fortunately, you can potentially preserve your resources if you implement a nursing home asset protection strategy.
This will involve Medicaid eligibility, because this program will cover a stay in a nursing home. There is also a Community Medicaid program in New York that will pay for care that is provided by an in-home health aide if you can get the assistance you need in your own place of residence.
Since there is a $30,182 limit on countable assets in New York, you have to get resources out of your own name to gain eligibility. You can do this if you convey resources to a Medicaid trust.
This would be an irrevocable trust, so you would not be able to rescind the trust or act as the trustee. The principal would be out of your reach, but you would be able to accept distributions of the trust’s earnings until you apply for Medicaid to pay for long-term care.
Timing is important because you must complete the funding at least five years before you apply for Medicaid. Your eligibility is delayed if you violate this rule, and the penalty would be based on the amount of the divestitures.
To sum it up succinctly, if you funded the trust with enough to pay for twelve months of nursing home care, your eligibility would be delayed for that period of time.
Take Action Today!
As you can see, these costs loom large, and you may or may not incur them. This being stated, if you embed a nursing home asset protection component within your broader estate plan, you can go forward with peace of mind.
To set the wheels in motion, carve out some time to view our on-demand webinar. You will come away with a great deal of important information, and it is being offered free of charge. Simply click this link and follow the instructions to gain access: Manhattan, NY estate planning webinar.