One of the most common concerns people have as they age is running out of money due to the high cost of long-term care. Long-term care generally means receiving help with your activities of daily living (ADLs), which include eating, dressing bathing, toileting, continence and transfers. Many people receive long-term care at home while others receive long-term care in an assisted living facility or nursing home. In Florida, the costs of long-term care are generally as follows:
- Home health care - $22/hour (average, dealing with a home health company that is licensed and insured)
- Assisted living facilities - $2,000 to $6,000 per month
- Dementia care assisted living - $3,000 to $7,000 per month
- Nursing home care - $8,000 to $11,000 per month
When looking to protect assets from the cost of long-term care, people generally think about Medicaid planning so that the government pays for your long-term care rather than you spending all of your money on your own care.
Why plan to protect your assets from the nursing home?
We generally think of a few reasons that you may want to try to protect your assets from the nursing home. The first is that having money protected for your benefit would likely provide better long-term care. Medicaid provides only the bare essentials but provides little for quality of life. Nursing home Medicaid provides for a shared nursing home room and you are only allowed to keep some $105/m of your income (single person). Assisted living Medicaid may or may not be helpful, providing an estimated $1,100/month subsidy for ALF care, although each facility can be a little different. Either way, setting money aside in advance may be helpful for your better care in the future. Here is the list of Florida Medicaid income and asset qualification financials.
Another reason to protect assets is to provide an inheritance to your children. Let's face it - many people would not want to have their entire life savings disappear to the nursing home, leaving no legacy to your children/family. So protecting your assets may fit with your desire to protect assets for your children's benefit.
Can I just give my assets away if I get sick?
No! Medicaid has a five year "lookback" period. The lookback penalizes any transfers meant to protect assets from the nursing home. We have a lot more information on Medicaid and Medicaid transfers on this webpage.
What should I do to protect my assets now?
If you are fairly healthy at this point in your life and not expecting to receive long-term care for some time, you generally have three options:
- Gifting before the five-year lookback period - this is usually done with irrevocable asset protection trusts
- Purchasing financial products - due to the 2010 Pension Protection Act, many life insurance policies and annuities have long-term care insurance rides, which are generally much better than normal long-term care insurance (your elder law attorney may even help you with this)
- Get your estate planning affairs in order - if you do not want to give your assets away or purchase any financial products, then you could/should make sure your heirs/family have a way to protect your assets through having a good estate plan, including creating a durable power of attorney with a good elder law attorney.
What if my loved one is already in the nursing home?
First, we would want you to review this list of common questions to ask when your elder just went to the nursing home. After that, you would want to see a good elder law attorney to discuss asset protection options. The key to asset protection planning is seeing a good attorney (like our law firm) to help discuss all of your options, which generally include:
- Personal services contracts (paying family caregivers)
- Pooled Trusts
- Medicaid "spend down" (see below)
- Purchasing income producing property (with attorney guidance)
- Spousal refusal
- And much, much more.
What is Medicaid "spend down" planning?
Medicaid spend down planning may or may not mean protecting assets. I generally think that spend down planning is different than asset protection planning. Medicaid "spend down" planning can be very appropriate in the right situation in order to protect assets and provide for better care for the elder.
What about protecting the family home?
You may or may not want to or need to protect the family home, depending on the situation. We have a lot more about the Florida homestead and Medicaid on this blog post.
How can assets be protected when my elder is already in the nursing home?
The key to asset protection when an elder is already in the nursing home is: 1) a good elder law attorney; and 2) a good durable power of attorney/estate plan that will allow the attorney-in-fact the power to protect assets. If the elder is competent, of course, the elder would participate in all decisionmaking.
Must my elder law attorney live close to me in order to apply for Medicaid?
No! A good elder law attorney can protect assets and apply for Medicaid in any part of Florida.
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