The cost of assisted living is overwhelming for most families. Despite working and saving for a lifetime, many people find themselves unable to afford this care on their own. Medicaid provides important support for many, but at significant cost.
There are strategies for protecting assets from a nursing home in Somerset. This might be done in a way that allows the funds to still be used in the future. A dedicated elder law attorney could provide you with strategies ideal for your circumstances.
When it comes to securing assets in preparation for the cost of a nursing home in Somerset, irrevocable trusts are a popular option. The way these trusts are funded and created is important, and an experienced attorney could help with avoiding crippling mistakes.
It can be possible to create an irrevocable trust that avoids any penalties when seeking Medicaid coverage. However, this requires long-term planning, as contributions must occur at least five years prior to applying for benefits. This strategic move helps safeguard their assets, preventing them from being depleted by nursing home expenses.
Once the property is transferred into the trust, it assumes legal ownership. This may seem restrictive initially, but individuals might be able to benefit from the income rights attached to their contributions. This means they can continue receiving income generated by these assets while simultaneously protecting them from potential long-term care costs or penalties.
Failing to structure the trust correctly could have serious consequences. In these cases, this property may be considered “countable” and subject to potential penalties—including ineligibility for Medicaid benefits. To avoid such complications, it is crucial for individuals to rely on legal counsel that understands elder law.
There are also options when it comes to purchasing long-term care insurance. These policies are designed to offset expenses like nursing homes, but there are risks associated with this approach.
For starters, not everyone will require this type of ongoing medical care. These individuals could spend years paying premiums to never take advantage of the benefits. These policies also vary in quality, making it valuable to discuss coverage options with an attorney before purchasing one. Legal counsel could be helpful with guarding assets from Somerset nursing homes through long-term care insurance.
Annuities are one option to be aware of when protecting assets and planning for the cost of Somerset nursing homes. However, they are only viable under specific circumstances. Without careful planning, they can result in a greater financial loss than the cost of care itself.
Annuities are a form of investment that is purchased upfront. Over time, payments are made to the buyer to recoup those investments. These are often non-assignable and non-transferable. When they meet the requirements set by law, these tools can allow for the liquidation of excess assets without paying any penalties or becoming disqualified for Medicaid.
There are risks associated with this approach, which should not be undertaken alone. A dedicated attorney could advise whether these options are viable.
The law considers gifts when it calculates whether a person’s assets are “countable resources” for Medicaid penalties or ineligibility. However, there is a time limit that could make gifting viable as part of a long-term plan.
The government only considers gifts in the previous five years when making this calculation. While that means any gift would need to be planned out well into the future, it is a good idea to consider long-term options in general.
These decisions are important, as they can have a dramatic impact on your ability to financially support yourself while still qualifying for Medicaid. Due to the high costs associated with nursing home care, you could benefit from a call about protecting your assets from a nursing home in Somerset.
