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The term “elder law” confuses some people. It’s not that there are certain attorneys that only accept older folks for a wide range of different legal matters. Elder law attorneys address legal and financial situations that only apply to people that have reach an advanced age.
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Without question, this would be the matter of long-term care and the expenses that go along with it. The United States Department of Health and Human Services tells us that seven out of every 10 people that are turning 65 on any given day will require living assistance.
Many of these individuals will be able to get the help that they need from family members and friends in their own homes, at least for a while. However, at some point, many seniors need a level of care that can only be delivered by a professional.
There are trained and licensed in-home health aides, but about 35 percent of seniors eventually reside in nursing homes. These facilities are very expensive, and Medicare does not pay for the custodial care that you would receive in a nursing home.
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Our practice is in Indiana, and according to the state, you can expect to pay about $100,000 for a year in a nursing home. The average length of stay is 2 ½ years, and if you are married, you and your spouse may accumulate two sets of nursing home bills.
Clearly, these expenses could significantly reduce the inheritances that you always intended to leave to your children.
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Fortunately, there is a widely embraced solution in the form of Medicaid. This government benefit will pay for the custodial care that nursing homes provide.
You are probably aware of the fact that this is a health insurance program that is only available to people with very limited monetary resources. In spite of this, the majority of people in nursing homes are enrolled, and most of them were never financially needy.
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There is a $2000 limit on assets in Indiana, but your home does not count. Though there is an equity limit, it is well in excess of the median cost of houses in our area. If a healthy spouse is staying in the home, there is no equity limit at all.
The healthy spouse is also allowed to keep half of the shared countable assets up to a limit that is currently $130,380.
If a single person is applying for Medicaid to pay for long-term care, almost all their income would go toward the cost of the care that they receive. This requirement is waived if a healthy spouse is relying on the income. They can receive a Monthly Maintenance Needs Allowance that allows them to continue to receive some of their spouse’s income.
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Yes, and this is commonly done, but it takes careful advance planning. All gift giving must be completed at least five years before you submit your application for Medicaid coverage.
You can give direct gifts, but there is another option that may be preferable depending on the circumstances.
If you convey assets into an irrevocable Medicaid trust, five year prior to applying for Medicaid, they would not count if and when you apply. However, if there are income-producing assets in the trust, you could continue to accept distributions of the income.
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We Are Here to Help!
Our doors are open if you are ready to discuss Medicaid planning with a licensed elder law attorney. You can schedule a consultation right now if you call us at 219-865-2285, and you can fill out our contact form if you would rather send us a message.
