When you hear the term “nursing home asset protection,” you may get a quizzical look on your face. Why would you need to protect your assets from a nursing home when you are going to qualify for Medicare as a senior citizen?
It would be logical to assume that Medicare will pay for long-term care since it is a health-related expense that most seniors will incur. In fact, whether it makes sense or not, Medicare does not pay for long-term care. The program will pay for convalescent care for a brief period, but it will not pay for long-term living assistance.
This lack of coverage could consume all or most of what you intended to leave to your loved ones if you have to pay for nursing home care out-of-pocket. Nationally, the average annual charge for a private room in a nursing home is in excess of $90,000, and the average length of stay is over two years according to a government survey.
Nursing Home Asset Protection
Now that you know why nursing home asset protection is important, you may wonder what you can do to keep your resources in your family if you need long-term care. For many people, Medicaid is at the core of the plan. This government health insurance program does pay for long-term care.
You are probably aware that Medicaid is only available to people who are financially needy. There is a $2000 limit on countable assets, but we should point out that some things that you own do not count. Your personal effects, your wedding and engagement rings and heirloom jewelry, and your household goods are not countable.
One motor vehicle that is used as a primary source of transportation would not be counted, and you can retain ownership of your home, but there is an equity limit of $552,000 in North Carolina in 2015. Another thing you should know about home ownership is that a Medicaid lien could be placed on your home if you qualify for Medicaid while you are still in direct personal possession of the property.
To get countable assets out of your own name before you apply for Medicaid, you could give gifts to your loved ones. Since the nursing home would be your last place of residence, this need not be a source of concern if you do things correctly.
This does take some advance planning because ideally, you should give the gifts at least five years before you apply for Medicaid. If you have to plan within that five-year window, you can still preserve some assets; but your eligibility may be delayed.
Protect Your Resources
If you would like to discuss nursing home asset protection with a licensed professional, our firm would be glad to help you put a plan in place. To get started, send us a message through this page to set up a consultation: Charlotte NC Elder Law Attorneys.