What Are Some Of The Important Components That Should Be Part Of Every Long-Term Care Plan?
When it comes to long-term care, some of the documents that become extremely important are powers of attorney – the general, financial, and healthcare powers of attorney. There are also living wills or advanced directives that can be helpful to individuals. Another document that can be helpful is the HIPAA release document, which allows other individuals to access your medical information. Asset protection can become a very important part of your long-term care pan as well. A variety of trusts should also be discussed for long-term care planning. You many need to potentially incorporate a revocable and an irrevocable trust. Depending on the circumstance, another thing that can be extremely beneficial is the need or the procurement of long-term care insurance.
What Do You Mean By Asset Protection?
Asset protection in relation to long-term care planning, consists of planning for the possibility when an individual may need skilled nursing care sometime down the line. When we think about the costs of skilled nursing in a facility, in the state of Michigan, the average is somewhere around $8,500 a month for a private pay rate. However, in my local area, it’s much higher than that. It’s upwards of $13,000 to $14,000 a month for private skilled nursing care.
Part of the planning that I end up discussing with my clients that are interested relates to getting Medicaid. Individuals who potentially qualify for Medicaid are able to get the majority of the costs of care paid for, as opposed to privately paying for it out of their own assets. Most people don’t realize the catastrophic impact that can have on their assets, especially if they have an estate plan in place. And, most people want to be able to provide for their spouse or loved ones, such as children.
Therefore, we put an asset protection trust in place whereby we transfer title of certain assets into an asset protection trust to be held for the benefit of beneficiaries that the trust maker elects. And then, concerning Medicaid, there is a five-year look back. After a five-year time period, those assets would not be counted under that individual. As a result, those assets would be protected and non-countable towards the Medicaid analysis.
Are There Certain Trusts That Are Useful When It Comes To Elder Law Planning Or Long-Term Care Planning?
There are certain trusts that are useful when it comes to elder law planning and long-term care planning. As mentioned, a revocable living trust incorporates supplemental needs planning in that trust as well, which can be very beneficial. An asset protection trust, which is a type of irrevocable trust, is also useful. Traditionally, those are the trusts that are prepared at my law firm to help individuals with long-term care goals.
Is It Too Late To Save Resources Or Help My Loved One If He Or She Already Went Into A Nursing Home?
It is not too late to save resources or help a loved who has already gone into a nursing home. That’s one of the misconceptions. It’s always best to do proactive planning by trying to protect the maximum amount of assets that you can. However, sometimes families are placed in emergency or crisis situations, and we can still protect and save assets even in a crisis situation. So, no, it’s never too late.
Without speaking to an experienced elder law attorney who can advise you, most often, the nursing home care facilities are more than happy to have you pay privately until you run out of money. Therefore, it’s very important, even if it’s a crisis situation, that you contact an elder law attorney to at least protect what you can.
What Does Happen If Your Loved One Is In A Nursing Home And He Or She Runs Out Of Money?
If your loved one is in a nursing home and they run out of money, and there has been no Medicaid application filed, then it is well within the right of that care facility to remove that individual from their facility. Unfortunately, for that individual and their family, the care facility is under no obligation to keep them there if they do not have the ability to pay.
Is That Why Long-Term Planning And Medicaid Planning Is So Important?
Making sure that funds are available is the reason why it is important to do long-term care planning and Medicaid planning. Having an elder law attorney on your side, even if there are little to no assets, can be very helpful. Your attorney can help you understand the rights that an individual has if they’re in a care facility. It can make the difference between that person being able to stay there or being kicked out of the facility due to the inability to pay.