Don’t Make a Nursing Home Your Sole Heir

Since so many people procrastinate when it comes to estate planning, when they do take action, they often look for “simple solutions.” They may use a do-it-yourself template or download that they got off the Internet to draw up a last will, and they feel as though they have satisfied their responsibilities to their loved ones.

Of course, there is nothing stopping you from taking this approach, but it can be shortsighted. First of all, a last will is not always the best asset transfer vehicle to utilize, and DIY estate planning in and of itself is risky at best.

Researchers have found that the boilerplate legal documents that you can get online are no substitute for qualified legal counsel when you are devising your estate plan.

Plus, if you take a shortsighted approach, you may not think about asset protection. Indeed, you don’t have to worry about estate planning at all if you are not going to have anything left when you pass away.

This may sound preposterous, but when you understand the facts about nursing home care, it may change how you think about this.

Long-Term Care Statistics

As elder law attorneys, we often have to share some inconvenient truths, but it is wise to face the eventualities of aging head on so you can make the appropriate preparations.

The Social Security Administration has a tool on its website that you can use to measure your life expectancy at any given age. Using this resource, if you are a woman who is turning 67 today, your life expectancy is 87 years, and it is 85 for a man.

About 70% of people will need some form of living assistance, and 35% of American elders will spend time in nursing homes. The average length of stay is 12 months.

When you consider this, you can start to see that it is very possible that you will need help with your activities of daily living before all is said and done.

Medicare Gap

It would be logical to assume that Medicare would pay for a stay in a nursing home since so many elders will eventually require long-term care. After all, this is a health insurance program that is largely designed to satisfy the needs of senior citizens, right?

A lot of people would question the logic behind this coverage structure, but the harsh reality is that Medicare will not pay for residence in a nursing home. The program will help pay for convalescent care, but it does not cover custodial care when there is no pathway toward recovery.

Nursing Home Expenses

We have offices in North Carolina and Kentucky, and in these states, you can expect to pay somewhere in the vicinity of $70,000 for a year in a nursing home at the time of this writing.

That’s a lot of money, and costs have been rising year-by-year so it is very likely that the price tag will be considerably higher in a couple of decades. You also have to consider the possibility of two separate rounds of nursing home expenses if you are married.

Depending on the extent of your resources and the exact amount of time you spend receiving long-term care, the bills could potentially absorb everything that you intended to leave to your loved ones.

Medicaid Planning

Fortunately, Medicaid is a government program that will pay for long-term care if you can qualify. There is a low $2000 limit on countable assets, but some things do not count, and with proper planning, you can often preserve some additional assets for your family before you apply.

When it comes to the  gift giving, you have to act plan carefully because there is a five-year look back period for most gifts. If you give away assets within five years of your application submission, you will be normally denied, and your eligibility will be delayed.

Schedule a Consultation Today!

Our doors are open if you would like to discuss this matter with a licensed elder law attorney. You can schedule a consultation at our North Carolina office if you give us a call at 704-944-3245 (Charlotte, NC or Huntersville, NC), and our number in Kentucky is 606-324-5516 (Ashland, KY) or 859-372-6655 (Florence, KY). We also have a contact form on this website that you can use to send us a message.