The aging process is easy to perceive from a distance, but when you are in the middle of it on a day-to-day basis, it is not so easy to see. Your instinct is to keep yourself in shape, and you never really think about natural forces working against you as the years pass.
This dynamic makes it hard to wrap your head around the eventualities that are simply part of the human condition because you don’t want to “give up.”
At the same time, when there is a potentially difficult road ahead, it is wise to prepare in advance so that you are ready to deal with it as effectively as you can.
The one thing about aging that is easy to accept is the concept of an active retirement. You save money along the way and make wise investments, and you will eventually have your freedom.
At that point, you can spend time on your hobbies, travel, engage in leisure activities, and enjoy quality time with your family and friends. However, the clock will be ticking, and the golden years will start to fade into the twilight years.
Once you reach your mid-60s, your life expectancy is into the mid-80s. Once again, until you actually get there, it is impossible to fully appreciate what it will feel like when you get there.
This is why you have to try to get past the mental barrier if you want to take the right steps to be able to live in comfort during your twilight years as you protect your legacy.
We all value self-sufficiency, but it is important to face the eventualities of aging with clear eyes. Just over 50 percent of senior citizens will need paid long-term care eventually, and more than one third of elders will reside in nursing homes.
You can say, “this will never happen to me,” but the statistics don’t lie. Unfortunately, denial can yield some pretty negative consequences.
Medicare does not pay for any type of custodial care, and living assistance is very expensive. Depending on the extent of your resources, your legacy could be consumed by nursing home costs if you have to pay out of your own pocket.
Some people will purchase long-term care insurance, but everyone should look at savings and investment with an eye to making sure their money is growing sufficiently for them to pay for the long-term care of their choosing.
Fortunately for those who have not been able to plan ahead, there is also a solution in the form of Medicaid coverage. This jointly administered federal/state government health insurance program will pay for long-term custodial care.
Since it is a need-based benefit, you can’t qualify if you have more than $2000 in countable assets in your name, but your home is not a countable asset. However, if you qualify for Medicaid as a homeowner, a lien could be placed on the property after your death during the Medicaid recovery phase.
You could implement a nursing home asset protection strategy that revolves around future Medicaid eligibility. The term “future” is key because Medicaid planning is most effective if you plan at least five years before you apply for Medicaid.
If you convey your home and other property into an irrevocable Medicaid trust, you would be able to receive income that is earned by the trust’s holdings. This would allow you to live in comfort at home until you need long-term care outside of your home.
As long as the trust was created and the assets placed in the trust at least 60 months before you apply for Medicaid, the assets would not count if you ultimately apply for Medicaid to pay for long-term care.
For those who do not have time to plan ahead, there are often options available to protect you and your family from nursing home costs; but the key is to plan as early as possible to make sure you have as many options as possible.
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