People have a tendency to project strength, and this can be a positive attribute in many instances. However, as you get older, the air of invincibility can start to become counterproductive because no one can escape the eventualities of aging. It is important to humbly consider the realities that confront elders, and nursing home asset protection is part of the equation.

Life Expectancy

You probably expect to be able to enjoy active pursuits during your retirement years, and it can be hard to imagine a time when you will have significant physical limitations. It becomes easier when you understand the life expectancy for someone who is in their mid-60s.

At that point, your anticipated longevity is somewhere in the mid-80s if you do not have any life-threatening health problems. When you digest this statistic soberly, you can see that your capabilities may be very different when you are among the ranks of the oldest old.

Living Assistance

The change in your ability to handle all of your responsibilities can come about rapidly after an injury or illness. You may be able to get limited help from family members and friends to take care of certain tasks, and this won’t cost you anything financially.

However, at some point, you may need some assistance from a paid in-home caregiver, and nursing home care may be required.

The annual price tag for a private room in a Warren, NJ area nursing facility was just under $160,000 in 2021 according to Genworth Financial. For a professional home health aide, you are looking at a median annual charge of $68,000.

Medicare and Custodial Care

Since most people do not think about the prospect of long-term care until it becomes rather obvious, some of them assume that Medicare will pay for it if they ever need it. This makes sense since Medicare exists to address the healthcare needs of seniors.

Unfortunately, this assumption is false, because Medicare does not cover a stay in a nursing home, and it will not pay for a professional in-home health aide.

Nursing Home Asset Protection

Medicaid has become the de facto source of long-term care insurance in the United States by default. This program will pay for custodial care if you can gain eligibility, but it is only available to people with limited resources.

There is also a Medicaid Home and Community Based Services (HCBS) waiver that will pay for a home health aide.

Your home and personal belongings are not counted along with one motor vehicle, but there is a $2,000 limit on additional assets. With regard to the home, there is an equity limit that stands at $1.033 million in New Jersey.

Medicaid Estate Recovery

If you qualify for Medicaid to pay for long-term care, the program will seek reimbursement from your estate after your passing. This is why you would not want to qualify as a homeowner even if it is possible.

There is an exception to the recovery rule if your spouse and/or a dependent child is residing in the home.

Five-Year Look-Back Period

When you digest all this information, you may resolve to give your children their inheritances in advance if you find that they need long-term care. The powers that be do not want people to be able to do this, so there is a five-year look-back period.

You can give gifts or convey assets into an irrevocable trust to remove assets from your name to qualify for Medicaid. However, you are penalized, and your eligibility is delayed if you divest assets within five years of the application submission date.

Take Action Today!

Because of the five-year look-back period, you have to be proactive about the implementation of a nursing home asset protection plan. If you use a trust, you could continue to receive income that the assets generate, and this can help you maintain your lifestyle.

We can explain all the details if you schedule a consultation, and there is no time like the present. You can set up an appointment at our Warren, NJ estate planning office if you call us at 908-222-8803, and you can alternately use our contact form to send us a message.

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Alan Augulis

Alan L. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of estate planning and elder law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the estate planning and elder law arena because of his informative and entertaining seminars... Read More.

Longevity Statistics Underscore the Need for Nursing Home Asset Protection