Cohen & Oalican, LLP discuss:
PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE
Part 2 of 7
Noncountable does not mean Protected
A home with equity of less than $750,000 is considered a noncountable asset. Without proper planning, at death the State will have a lien against your house and Medicaid will seek reimbursement for benefits provided. On the other hand, there are steps you can take to avoid a Medicaid lien and protect your home, saving hundreds of thousands of dollars.
Although the risk of a Medicaid lien is very real, the good news is that Medicaid will not force you to sell your house if you enter a nursing home. As long as a Medicaid applicant indicates on their application that they intend to return home, Medicaid will not force the sale of the house. This is a subjective question and it does not matter whether there is any realistic chance that the person actually will be able to return home.
Many people think the best way to protect their home is to give it outright to their children. Although this may sound like the simplest solution -- it may be the worst choice. Transferring a home outright to children can result in large capital gains taxes. Secondly, things can happen to children that can place the house at risk. What happens if a child gets divorced, is sued or has creditor problems? Seniors have been literally forced out of their own home as a result of ‘gifting’ their house to their children. There are several strategies available which will protect the house from Medicaid but also protect your right to live in the house. However, before you consider transferring your house, you have to understand the Medicaid transfer rules.
Be sure to consult with one of the attorneys at the offices of Cohen Oalican, LLP to create your Medicaid plan
This has been Part 2 in a series of 7, brought to you by Cohen & Oalican LLP, Elder Law Attorneys Boston, Raynham, Andover
Showing posts with label financing nursing home care. Show all posts
Showing posts with label financing nursing home care. Show all posts
Monday, May 24, 2010
Friday, May 21, 2010
Protecting your house from the cost of nursing home care - Part 1
Cohen & Oalican discuss Part 1 of 7
PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE
Introduction
For must of us, our home is our most valuable asset. “Value” refers both to how much money you would receive if you sold your house but perhaps more importantly, value describes the emotional attachments we hold for the place we live and raise our families. When we first meet with our clients we typically ask what they are most worried about. The overwhelming majority tell us that they want to protect their home. “I don’t want to lose my house, if I go to a nursing home” is an often repeated refrain.
There is a great deal of confusion regarding what will happen to your house if you enter a nursing home. Some people have the good fortune of being wealthy enough to pay privately for their care. Although when nursing homes typically cost $100,000 a year, most of us are not that lucky. Others had the foresight to buy long-term care insurance. However, most of our clients are not wealthy enough to pay for their care and they either cannot afford insurance, or are not qualified. The remaining choice is Medicaid.
The first basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $2,000 in "countable" assets in his or her name. "Countable" assets generally include everything you own, except for your home (if it is located in Massachusetts and it has equity less than $750,000). Everything else,(second homes, retirement savings, life insurance) is counted and may have to be spent down before you can obtain eligibility. Although Medicaid will consider your home to be a noncountable asset it is important to understand that does not mean your home is protected.
This has been Part 1 in a series of 7, brought to you by Cohen & Oalican LLP, Elder Law Attorneys Boston, Raynham, Andover
PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE
Introduction
For must of us, our home is our most valuable asset. “Value” refers both to how much money you would receive if you sold your house but perhaps more importantly, value describes the emotional attachments we hold for the place we live and raise our families. When we first meet with our clients we typically ask what they are most worried about. The overwhelming majority tell us that they want to protect their home. “I don’t want to lose my house, if I go to a nursing home” is an often repeated refrain.
There is a great deal of confusion regarding what will happen to your house if you enter a nursing home. Some people have the good fortune of being wealthy enough to pay privately for their care. Although when nursing homes typically cost $100,000 a year, most of us are not that lucky. Others had the foresight to buy long-term care insurance. However, most of our clients are not wealthy enough to pay for their care and they either cannot afford insurance, or are not qualified. The remaining choice is Medicaid.
The first basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $2,000 in "countable" assets in his or her name. "Countable" assets generally include everything you own, except for your home (if it is located in Massachusetts and it has equity less than $750,000). Everything else,(second homes, retirement savings, life insurance) is counted and may have to be spent down before you can obtain eligibility. Although Medicaid will consider your home to be a noncountable asset it is important to understand that does not mean your home is protected.
This has been Part 1 in a series of 7, brought to you by Cohen & Oalican LLP, Elder Law Attorneys Boston, Raynham, Andover
Wednesday, April 7, 2010
Financing Nursing Home Care - FAQ
1. Will Medicare pay for the cost of my care if I need nursing home care?
No.
Medicare will only pay for a maximum of 100 days in the skilled nursing facility if you meet certain requirements. You must have moved to the nursing home within 30 days of the hospital discharge and the hospital stay must have lasted at least three (3) days. Also, if you receive a skilled level of care, Medicare will pay completely for the first twenty (20) days. For days twenty-one (21) through 100, they will pay less a co-payment, which is set each year. In most situations, people receive less than the full 100 days of benefits. After that point, you either have to pay privately with your own funds or obtain Medicaid eligibility.
2. If my spouse requires Medicaid, will I lose all of my assets?
No.
Medicaid will allow a spouse living in the community to keep their home and a modest amount of the couple’s savings. However, Medicaid does cap the amount of assets the spouse in the community can keep regardless of whose name the assets were in when the couple first applied. For this reason, it is critically important for a couple to speak with an elder law attorney to ensure that the assets are protected.
3. Will my homestead declaration protect my house if my spouse or I need Medicaid benefits?
No.
A homestead declaration filed with the Registry of Deeds offers no protection in the Medicaid context.
4. If I give away my assets, will this make ineligible for five (5) years?
Perhaps.
With careful planning, it is possible to shorten the ineligibility period so that it is less than five (5) years. In addition, there are many exceptions to the Medicaid rules. Where there is no transfer penalty imposed by Medicaid, however, you need to work with a qualified elder law attorney to identify these planning opportunities.
For further information call one of our attorneys at Cohen & Oalican, LLP Boston, Andover or Raynham.
No.
Medicare will only pay for a maximum of 100 days in the skilled nursing facility if you meet certain requirements. You must have moved to the nursing home within 30 days of the hospital discharge and the hospital stay must have lasted at least three (3) days. Also, if you receive a skilled level of care, Medicare will pay completely for the first twenty (20) days. For days twenty-one (21) through 100, they will pay less a co-payment, which is set each year. In most situations, people receive less than the full 100 days of benefits. After that point, you either have to pay privately with your own funds or obtain Medicaid eligibility.
2. If my spouse requires Medicaid, will I lose all of my assets?
No.
Medicaid will allow a spouse living in the community to keep their home and a modest amount of the couple’s savings. However, Medicaid does cap the amount of assets the spouse in the community can keep regardless of whose name the assets were in when the couple first applied. For this reason, it is critically important for a couple to speak with an elder law attorney to ensure that the assets are protected.
3. Will my homestead declaration protect my house if my spouse or I need Medicaid benefits?
No.
A homestead declaration filed with the Registry of Deeds offers no protection in the Medicaid context.
4. If I give away my assets, will this make ineligible for five (5) years?
Perhaps.
With careful planning, it is possible to shorten the ineligibility period so that it is less than five (5) years. In addition, there are many exceptions to the Medicaid rules. Where there is no transfer penalty imposed by Medicaid, however, you need to work with a qualified elder law attorney to identify these planning opportunities.
For further information call one of our attorneys at Cohen & Oalican, LLP Boston, Andover or Raynham.
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