A parent in need of care can cause great stress. However, there are many steps you can take to ensure that need for care does not devastate the family financially. Early Medicaid planning can help protect assets from spend down on the family member in need’s nursing home care costs.
A parent in need of long term care can cause great stress. How do you find care? How much will it cost? Will it wipe out the family financially? Medicaid planning as early as possible can address many of these concerns.
The first item to address is: what level of care is needed? Is it nursing facility level of care? Is it assisted living facility level care? Can the parent remain in the home receiving long term care services in the home? Could home modifications be made to allow for care in the home? What activities of daily living (adls) are compromised? Can Medicare cover the need? (Most likely not.) What are the asset limits for qualifying for state assistance, i.e. nursing home Medicaid.
The next is to determine the financial ability to pay for care, compiling a listing of the assets that may be available to pay for care: mutual funds, bonds, real estate, primary residence, bank accounts, other real estate, annuities, etc. Next the categorization of the assets into countable assets and exempt assets
If the need for care is most likely years in the future, perhaps Medicaid planning strategies, Medicaid Asset Protection Trust (an irrevocable trust) could be established. This estate planning mechanism, set up through a qualified elder law attorney, could protect assets if the need for care is more than five years in the future, thus established outside of the five year look back period applied when gifting assets and not subject to any penalty period for asset transfers.
If the need for care is likely within the five-year look back period, then other strategies must be employed. If the parent is married, then a Division of Assets can be filed with a portion of the countable assets assigned to the non-applicant spouse or “Community Spouse” (called a Community Spouse Resource Allowance, or CSRA) which would not need to be subject to Medicaid spend down on long term care costs before a Medicaid application is filed. These rules, established to alleviate spousal impoverishment, can be powerful tools as part of long-term care planning, allowing for payment of nursing home costs.
Additionally, Medicaid can pay for care in the home if the need for care has progressed to a full need for a nursing home level of care. Home and Community Based Services can be applied for allowing for in home care for personal care assistance or more. These benefits often require the use of a Miller Trust, but this care assistance can be available for those in need.
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