Nursing Home Asset Protection

The case for asset protection

In the 21st century, people are living longer than ever before. In cases where people have become mentally or physically disabled due to illness, injury or old age, the cost of care can destroy the wealth they spent a lifetime building. According to the Council for Disability Awareness, one in three people will become disabled at some point in their life. Given that somewhat alarming statistic, planning for potential nursing care is a crucial step in protecting your wealth. The government will only pay up to a certain point for nursing care. After that, it’s your responsibility, whether you choose to go into a nursing home or prefer to receive care in the comfort of your own home. Planning will arrange in advance for whatever outcome you most prefer.

The limited value of Medicare and Medicaid

Medicare is set up by the government to cover some expenses for a limited time during disability and/or old age. Medicaid is set up by the government to cover long-term care for the elderly, disabled and children, but only if they qualify financially. Many middle class senior citizens turn to Medicaid to pay for their nursing and health care. But there are very strict guidelines on who qualifies, and seniors can’t simply offload their assets to lower their estate value because of the “five year look-back period” that prevents people from quickly qualifying. If a disabled person or senior citizen hasn’t planned properly, they could lose their estate to health and nursing care costs if they are turned down for Medicaid eligibility.

The safety of a Medicaid Income Only Irrevocable Trust.

A Medicaid Income Only Irrevocable Trust has several benefits for those who are able to take advantage of them. If it’s properly arranged to meet Medicaid’s strict guidelines, assets can be protected and Medicaid benefits can be used to pay nursing and disability care. But because assets transferred into this kind of trust will be evaluated using the five year look-back rule, not everyone has planned far enough in advance to set this up. If you have planned and a proper Medicaid Income Only Irrevocable wishes. You’ll also be able to draw income from the trust to support your living expenses while Medicaid covers your care. Trust can be arranged, you can be assured that your assets will be protected so when the time comes, your beneficiaries will receive them according to your wishes.

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