Asset Protection Nursing Home
Why And How You Should Stay Protected for The Future
November 2, 2004
By Monish Datta
Medical advances have extended the life
expectancies of many individuals. With increased longevity,
however, comes the prospect of longer institutionalization
and it's often times crippling costs. Asset Protection
for Nursing Home care is crucial and an integral part
of estate planning.
Medicaid has broad coverage for nursing home care. Eligibility
for Medicaid is limited to needy and low-income individuals who
are elderly (65 or older), blind, or disabled. In contrast to Medicare,
the resources of the individual must be considered in determining
whether the individual qualifies for Medicaid.
Generally, an individual cannot have more than $2,000
of assets in order to be eligible for Medicaid. Countable assets
include bank accounts, stocks and bonds, IRAs, the residence, and
cash value of life insurance.
If the individual is married, all of the assets of the
married unit, regardless of which spouse's name the assets are in,
are considered in determining the individual's eligibility for Medicaid.
It's never too late to do anything to protect a person's assets,
even if the person is already in a nursing home.
Of course, the earlier a person acts with competent
legal counsel, the more of their assets can be protected, But in
all cases, a significant amount of assets can always be sheltered,
even if nothing is done prior to nursing home admission.
In planning for nursing home care, one should consider the following
:
Assets should be transferred more than 36 months before applying
for Medicaid. No matter how many assets are transferred, an ineligibility
period will not result if the transfer occurs greater than 36 months
prior to applying for Medicaid.
Consider purchasing long-term care insurance. This involves analyzing
the costs and being able to satisfy the medical underwriting
Although Medicaid provides for a 36-month "look-back"
rule, this does not mean that all transfers made will result in
a denial of Medicaid, nor does it mean that all penalized transfers
will trigger a 36-month period of ineligibility. On the contrary,
by utilizing certain planning techniques, some amount of assets
can generally always be protected, even if nursing home placement
is imminent or has occurred
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