Elder law attorneys focus on legal and financial matters that impact senior citizens, and living assistance is at the top of the list. The majority of elders will need help with their activities of daily living, and just over one third of seniors will eventually require nursing home care.
A lot of people are not overly concerned about long-term care costs because they know that they will qualify for Medicare when they reach the age of 65. This coverage will definitely provide a solid underpinning, but unfortunately, Medicare will not pay for a stay in a nursing facility.
2020 Long-Term Care Costs in North Carolina and Kentucky
Genworth Financial is a company that sells financial products for seniors, with a focus on long-term care. Since this is their demographic, they conduct in-depth research on an annual basis to maintain a grasp on the state of the costs associated with assisted living.
On the national level, the median charge for a semi-private room in a nursing home was $93,075 in 2020. This is a 3.24 percent increase over the 2019 figure. The median charge for a private room went up by 3.57 percent to $105,850.
In addition to the broad national numbers, they drill down to look at individual metropolitan areas. One of our offices is in Charlotte, North Carolina, and our costs were similar to the national averages, but the increases were greater.
The median charge for private room in Charlotte in 2020 was $103,295, which is a 10.12 percent increase.
According to the Bureau of Labor Statistics, the annual inflation rate for the United States for the 12 month period that ended in November of 2020 was 1.2 percent. Clearly, the long-term care cost increases are significantly higher than the rate of inflation.
That being said, one of our other locations is in Ashland, Kentucky, and the numbers there took a step in the right direction. The median annual charge for a private room was $85,775 in 2020, which was a significant 25.63 percent decrease.
Nursing Home Asset Protection
The picture that we are painting so far is pretty gloomy, but there is a widely embraced solution that you can implement to preserve your legacy. Medicaid will cover long-term care, but since it is a need-based program, you cannot qualify if you have significant assets in your name.
Your home is not a countable asset, and some other relatively minor possessions are not counted. We will not get into the details here, but you can refer to this post if you would like to learn more about countable versus non-countable assets.
You could convey assets into a Medicaid trust to get assets out of your name so you can qualify for coverage. The trust would be irrevocable, and you would not be able to access the principal or act as the trustee.
However, you could receive distributions of the income that is generated by assets in the trust until you apply for Medicaid. If and when you seek Medicaid eligibility, the assets in the trust would not count against you.
Timing is the key to the successful implementation of this strategy. There is a five-year look-back period, so the funding must take place at least 60 months before you submit your application for coverage.
Your eligibility is delayed if you violate this provision, and the duration of the period of ineligibility is based on the amount of the divestiture.
To explain by way of example, let’s say that the state determines that the average cost of long-term care is $100,000 a year. You funded the trust with $200,000 two years before you apply for Medicaid.
Since that amount would have paid for two years of nursing home care, your eligibility would be delayed by two years.
Take Action Today!
When you work with us to implement a forward thinking plan, you can ensure your well-being while you preserve your legacy for the benefit of your loved ones.
Now is the time for action, and you can set up an appointment with our attorney in Charlotte, North Carolina or Huntersville, North Carolina if you call us at 704-944-3245. The number in Ashland, Kentucky is 606-324-5516, and the number in Florence, Kentucky is 859-372-6655. Or you can fill out our contact form if you would prefer to send us a message.
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