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 estimated costs of long-term care are as follows:
- Home health care - $30+/hour (average, dealing with a home health company that is licensed and insured)
- Assisted living facilities - $3,000 to $7,000 per month
- Dementia care assisted living - $3,000 to $8,000 per month
- Nursing home care - $10,000 to $12,000 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?
The concept of "protecting your assets from the nursing home" generally means trying to plan for Medicaid long-term care eligibility without spending all of your own money. Many people have worked long and hard to accumulate their nest-egg and they do not want to see it all disappear to the high cost of long-term care. The right planning can allow you to protect your assets and get government benefits, such as Medicaid, without spending all of your money (i.e., going broke) first.
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 $130/m of your income (single person). Assisted living Medicaid may or may not be helpful, providing an estimated $1,300-$1,500/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 need long-term care Medicaid?
No! Medicaid has a five year "look back" period. The look back 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 look back 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.
Whatever you look to do to protect your assets, you should definitely seek advice from a good elder law attorney. Do not look to a CPA, your friend, or even an estate planning attorney who does not practice elder law.
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 under careful guidelines)
- 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 as the home is not a countable asset for Medicaid purposes unless it is worth more than $688,000 (single person, 2023). 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 decision making. Good elder law attorneys know the rules that will allow assets to be protected so that all of the elder's assets do not disappear to the cost of long-term care, all of which can take place within the five year "look back" period. Here are some common Myths about Medicaid planning in Florida.
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. One key is that the family must need a good durable power of attorney to be able to legally protect the assets. We can help people across the state under most circumstances. Not all attorneys who say they practice elder law are the same - our office has done thousands of Medicaid applications and we would be glad to help your family in this difficult time, no matter where you live in Florida. There is no such thing as an easy Medicaid application, but we will be very helpful to everyone.
How Do I get Started?
If you or your loved one is looking to apply for Medicaid, we are glad to help. We generally charge $200 for an initial phone call/meeting to see what we can do to help. Give us a call today - we will first get a sense of your situation, help discuss the elder's health care, and make sure we have a good meeting to discuss if you need to hire an elder law attorney.
Download our Free Book on Asset Protection Planning!
If you or your loved one is looking at how to plan for your elder, or are looking at how to plan to protect your own assets, please download our free book, Protect Your Nest Egg from a Florida Nursing Home. This comprehensive book will help you and your loved one make the right decisions, now and in the future.
I have another book as well - The Short Guide to Florida Long-Term Care Medicaid as well.