My Spouse Needs to go to the Nursing Home…Now What?

My Spouse Needs to go to the Nursing Home…Now What?

by | Mar 6, 2022 | Asset Protection, Elder Care Planning, Elder Law, Long-Term Care, Nursing Home

You’ve been married to your spouse for decades. Lately, you’ve noticed that they are losing the ability to look after themselves. You realize that they may soon need nursing home care. You know this requires a lot of planning. Are you prepared?

When a spouse needs nursing home care, most people find that they are ill-prepared for the expenses associated with it. Paying out-of-pocket is expensive. After all, you’ve worked a lifetime to purchase your home and build your nest egg you should be able to pass those down to your children and grandchildren…not lose them to the nursing home. Your other options are to apply for Medicaid, or use long-term care insurance. Sadly, long-term care insurance is often overlooked until it’s too late to get it, leaving Medicaid as the only option. However, Medicaid eligibility can be tricky, and most people wonder how their assets might be impacted.

What Happens to My Income?

If your spouse has to go to a nursing home, all of their income will go to the nursing home.  You can keep all of your income but in many cases that is not going to be enough.  Without proper long-term care planning and a loss of your spouse’s income, your life savings could be drained in a matter of months if you have to pay out-of-pocket. Becoming eligible for Medicaid is challenging, with inhibitive income and asset limitations that may leave your spouse unqualified to receive these benefits. As the spouse who is not going to apply for Medicaid (also known as a “community spouse”), your income will not be factored in to eligibility. However, your spouse’s monthly income (which cannot exceed ~$2,523 per month ) will be used to determine Medicaid eligibility, and to pay for care, if approved. This leaves you at home with just one income to cover all of your expenses.

What About My Other Assets?

The other consideration when determining Medicaid eligibility is the assets that are owned by you and your spouse, regardless of whose name they are held in. The Medicaid applicant cannot own assets valued over $2,000 to qualify, not including your primary home or car. You, as the community spouse, can keep half of your assets, up to a maximum of $137,400.

You might also wonder which assets are included—and which are excluded—in the Medicaid application process. Typically, liquid assets, like bank accounts, insurance policies valued over $1,500, stocks and bonds, mutual funds, and second homes and cars, are considered countable assets. It should be noted that your home and one car are not included. This is because the community spouse would continue to reside in and otherwise utilize these assets. Additional assets that are exempt from Medicaid include personal effects, burial plots, and life insurance policies valued under $1,500.

So, What Are My Options?

If your spouse needs nursing home care now, and you are faced with either having to pay out-of-pocket or qualify for Medicaid, you still have some options. You may be tempted to spend down or transfer your assets, but Medicaid will look back 5-years from your application date to ensure you did not give away money to become eligible. Medicaid qualification is a confusing area of law, so it is best to plan with an elder care attorney who can take the guesswork out of applying for Medicaid and help you to avoid common mistakes that may cause penalties and delays in approval.

If you expect your spouse will need nursing care in the not-so-distant future, it’s best to start planning immediately. This is also a good time to consult with an elder law attorney about best practices for maximizing retention of assets and nursing home care provisions for your spouse. Your elder law attorney may suggest actions like:

  • Paying down existing bills: Medical bills, car loans, credit cards, etc.
  • Home improvements: Repairing plumbing and heating systems, fixing the landscaping, purchasing household goods and furnishings, and making structural modifications.
  • Funeral trusts: Purchase a pre paid funeral plan which in not countable and while takes care of an inevitable expense.

At this point, you’ve probably determined that paying for long-term nursing home care can be complicated at best, with so many variances and challenges depending on your unique circumstances. Proper planning should be implemented sooner rather than later to prevent costly and stressful consequences. Miller Estate and Elder Law can help you strategize in order to yield optimum benefits for you, your spouse, and—ultimately—your entire family.

Watch our FREE webinar to learn more about Medicaid eligibility and how to get your spouse qualified for the care they need, without sacrificing your life savings.

https://millerestateandelderlaw.com/medicaid-qualification-webinar

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How to Care for Someone with Dementia: Guardianship/Conservatorship for Parents

How to Care for Someone with Dementia: Guardianship/Conservatorship for Parents

by | Feb 3, 2022 | Long-Term Care, Medicaid, Medicaid Planning, Medicaid Qualification

how to care for someone with dementia

As our parents and loved ones grow older, they become the target of scammers and con artists across the globe. This is especially scary if your parents have developed dementia, Alzheimer’s, or another form of mental incapacitation. Knowing how to care for someone with dementia—and how to protect them—isn’t always straightforward, and sometimes legal intervention is required. If you are not named the agent on a preexisting power of attorney document, having an elder care attorney help you set up a guardianship/conservatorship may be the best way to make sure your parent’s finances are safe from predators.

When considering how to care for someone with dementia, it’s important to remember that they are a much easier target than most due to memory loss, confusion, and not being as mentally present as they used to be.

One of the best resources available to help you tackle the legal and financial planning issues that arise with the elderly is to engage the services of an elder care attorney, or a law firm that specializes in elder law. Working with a qualified attorney will ensure you have what you need to protect your parents and aging loved ones.

However, with or without a lawyer, you should know how to care for someone with dementia, as well as how to recognize the warning signs that your aging loved one has fallen victim to a scam:

Common Scams To Be Aware Of

Some of the most common scams that target the elderly, as well as those with conditions like dementia and Alzheimer’s, are:

  • Fake lotteries and sweepstakes that ask for money upfront for prize collection or entrance fees
  • People posing as representatives from government agencies like Social Security, Medicare, or the IRS
  • Bogus discount prescriptions and medical equipment
  • Credit card fraud
  • The “Grandparent Scam” where someone will claim that a grandchild is in trouble and needs money
  • Investment schemes
  • And others…

Signs To Look Out For

Guarding against those who would abuse our elders is a big part of how to care for someone with dementia. The following are some of the many signs of suspicious activity to be wary of:

  • Unusual monthly charges on bank and credit card statements
  • Out-of-the-ordinary calls from companies, utilities, government agencies, or charities requesting money in an unusual way
  • Callers who pressure you to make immediate decisions, ask for a lot of personal or financial information, or demand payment in unusual or specific ways
  • Official-looking emails, letters, bills, offers, etc. with spelling and grammar mistakes, or that seem out of place

What You Can Do?

If you have a parent who has Alzheimer’s or dementia—or some other form of incapacity—and they’re having a difficult time making decisions, or are getting taken advantage of, you may want to contact an elder care attorney about getting a guardianship or establishing a conservatorship over their finances. If your aging loved ones are not able to manage their own care or money, an elder law attorney can help you navigate the process of stepping in and protecting them.

Download our Free Guide: Caring for Aging Loved Ones

If you need to protect your own aging parents or loved ones, start by downloading our free guide: Caring for Aging Loved Ones: The ABCs of Long-Term Care Planning or by calling our elder law firm at (256) 251-2137. Our team is here to help guide you through the process of planning for long-term care, and setting up guardianships and conservatorships when needed.

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Ensuring Medicaid Eligibility Before Long-Term Nursing Care is Needed

Ensuring Medicaid Eligibility Before Long-Term Nursing Care is Needed

by | Feb 3, 2022 | Long-Term Care, Medicaid, Medicaid Planning, Medicaid Qualification

medicaid eligibility

If your spouse needs nursing home care, we hope that you’ve prepared by taking out a long-term care insurance policy or ensuring Medicaid eligibility well in advance of needing it. The question of how to pay for long-term care is generally the first issue that arises when placing a loved one in a nursing home. Many people don’t realize it, but there are only three viable ways to pay for long-term care:

1. Long-Term Care Insurance

Planning ahead by securing long-term care insurance is the best way to pay for nursing home care, but it only works if your spouse already has an insurance policy long before care is needed. If you try to get long-term care insurance after you need it, it’s too late to qualify. This is because most policies require medical underwriting, and if you already receive long-term care services, you are unlikely to qualify. Getting a long-term care insurance policy well before you need the benefits will save you much stress and hardship down the road.

2. Out of Pocket

Exactly as it sounds, out of pocket means that you will have to pay 100% of the nursing home care costs yourselves. Most couples don’t have the finances on-hand to cover care this expensive, especially considering how long you may need the care. In Alabama, for example, the average cost of long-term nursing care is $78,000 per year. Your life savings can be eaten up in a matter of months with nursing home fees that high!

3. Qualify for Medicaid

Medicaid—not Medicare—is the government program that covers the cost of long-term nursing home care. The application process is slow and difficult, and the requirements to qualify are very financially restrictive. Applying for Medicaid when you already need nursing home care—also known as Medicaid Crisis Planning—will likely mean paying out of pocket at first. That’s because, in order to qualify for Medicaid when you’re married, you’ll only be able to keep about 50% of your combined assets—up to a maximum of about $130,000. This means that if you have $300,000 total in assets, you won’t meet Medicaid eligibility requirements until you spend down about $170,000. Then, once you do qualify for Medicaid, all of your spouse’s income will go directly to paying for the nursing home, and you’ll have to rely on your income alone—plus whatever is left of your assets—to get by on. Learn more about the rules of Medicaid eligibility in Alabama.

However, through Long-Term Care Planning, you can employ several strategies to protect your assets from the cost of nursing home care and ensure Medicaid eligibility when you need it. A qualified elder law attorney will help you determine the best way to organize assets now, so you don’t lose everything to the nursing home later.

Take the Next Step

Sign up for our free webinar about how to get qualified for Medicaid by using the brief form below, or contact attorney Bill Miller today at (256) 251-2137.

Contact Miller Estate & Elder Law

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256-472-1900

bill@millerestateandelderlaw.com

The Pros and Cons of Long-Term Care Insurance Explained

The Pros and Cons of Long-Term Care Insurance Explained

by | Nov 20, 2021 | Elder Law, Long-Term Care

It might be hard to think about this now, but chances are—somewhere down the road—you may need help taking care of yourself. One question that arises from this situation is: how will you pay for it? One way to prepare for the potential cost of long-term nursing care is to purchase long-term care insurance. Unlike traditional health insurance, long-term care insurance is designed to cover the cost of long-term care services and support in a variety of settings, such as your home, a nursing home, or another facility.

Long-term care insurance policies cover such costs as assistance with routine daily activities, like bathing, dressing, or getting in and out of bed. They also help cover the cost of care if you have a chronic medical condition, disability, or disorder.

Taking into consideration long-term care costs is an important part of any long range financial plan. If you wait until you need care to buy coverage, it will be too late. Most policies require medical underwriting, and if you already receive long-term care services, you may not qualify. As a result, most people purchase long term care insurance plans in their mid 50’s to mid 60’s.

As we mention in the above video, there are two different types of long-term care insurance policies: traditional long-term care insurance, and asset based (hybrid) long-term care insurance. Both of these options have their pros and cons, but—as we mention—asset based insurance is usually the preferred option.

Traditional long term care insurance is a “use it or lose it” type policy, similar to homeowner’s insurance. If you do not need it or use it during your lifetime, you do not benefit from paying the monthly premium. The monthly premium that you do pay is based on your age, and how much coverage you want. This premium payment will increase over time, and can also continue to increase…even after you take out the policy.

On the other hand, a hybrid policy creates a pool of money for long-term care that is equal to several times your premium payments. The pool of money created for long-term care can either be used for a specified minimum period of time, or for a lifetime (depending on the insurance company). If you do not need these benefits, the policy pays a death benefit to your heirs upon your passing.

Long term care insurance is something everyone should consider, and it is important to understand the differences in the types of policies that are available. If you are apprehensive about navigating the long-term care maze, please join estate planning attorney Bill Miller for an upcoming free workshop using the form below. We’ll answer 

Register for our Next FREE Estate Planning Workshop



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Four Common Misconceptions About Long-Term Care Planning

Four Common Misconceptions About Long-Term Care Planning

by | Apr 22, 2021 | Blog, Elder Law, Long-Term Care

With the US population aging, life expectancy increasing, and events like the Covid-19 pandemic showing us that no one’s health is secure, new awareness has arrived concerning the need for a long-term care plan. This is great news and yet with increased awareness comes an increase in the circulation of misinformation. In a bid to clear the air, we address four of the most common misconceptions concerning long-term care planning below.

1. If you or your spouse enters a nursing home, the state will seize your assets.
Medicaid, the state and federal government-sponsored program that millions of US adults rely on to pay for long-term care needs, seizes nothing when you enter a nursing home. Instead, the program simply will not chip in a dime until you, yourself, have spent down your “countable” assets to a level that qualifies you for assistance. This does not mean only very low-income individuals are eligible to receive Medicaid, however; it simply means that you need to work with an experienced estate planning attorney well ahead of time to put a plan in place to protect assets so that you are able to qualify for Medicaid more quickly when the time comes.

2. If you use Medicaid to pay for care, you risk losing your home.

This misconception is similar to the above but deserves a separate address because of how often it is repeated.

As long as the person using Medicaid (the beneficiary) or their spouse continues to live in their home, it can neither be taken nor forcibly sold. This is the case even if you are single as long as you communicate your “intent to return home” in writing when you enter a nursing home.

It is true that upon your death, the state can file a claim against your estate (which includes your home) in order to repay nursing home expenses covered by Medicaid but even this can be avoided with help from an experienced attorney.

3. Making a financial gift disqualifies you from Medicaid for five years.
Medicaid employs a look-back period wherein any financial transfers or gifts made in the five years prior to applying for the program may be counted against your eligibility. This does not mean you will be barred from receiving benefits if you make a gift during this period. However, it does mean that you may have to endure a penalty period before Medicaid picks up the cost of your care.

This penalty is based on the value of the gifted assets made and how many days of long-term care they could have been used to pay for. Once more, an experienced estate planning attorney can help you work out specifics and determine the most affordable way for you to gain the coverage you need.

4. It is too late to start long-term care planning.
All too often, folks who are already receiving nursing home care or those with imminent need assume it is too late to engage in planning that preserves their assets. This is simply never true. You can always, for instance, use cash to pay down your mortgage and thereby convert a non-exempt asset into an exempt asset and thus save thousands. While it is always better to begin planning early, such last-minute strategies help you retain a large percentage of all that you have worked so hard to gain.

To learn more about long-term care planning or emergency strategies to ensure you have the coverage you need, do not hesitate to call Miller Estate and Elder Law at (256)251-2137 or reach out via the contact form on our website.

How To Pay for Long-Term Nursing Home Care

How To Pay for Long-Term Nursing Home Care

by | Jul 27, 2020 | Blog, Long-Term Care, Medicaid

Three Ways to Pay for Long-Term Nursing Home Care

Long-term care insurance

In determing how to pay for long term nursing home care, the first way,  and by far the best way, is with long-term care insurance. There are different kinds of long-term care insurance policies out there. Unfortunately, most people do not have long-term care insurance, and they wait too long to get it. By the time they apply for it, they are either too sick, or it is no longer affordable. If you can get a long-term care policy, I would encourage you to do so because it is the best way to pay for care.

Medicaid

The second way to pay for long-term care is through the Medicaid program. The Medicaid program is a federal program that is administered by the states, but it has very strict requirements in order to qualify. An individual cannot have more than $2,000 in non-exempt assets in order to qualify. Most people have way more than $2,000 in assets. If you are married, the rules are a little different, but Medicaid can still be difficult to qualify for.

Out of Pocket

The third way to pay, and what most people are doing, is out of pocket. Right now, nursing home costs in this area are around $7,000 a month. Within 10 years, they will probably be $10,000 a month. Every month, these long-term care costs are due and are eating away at your nest egg at the rate of about $10,000. If you don’t have long-term care insurance and you don’t qualify for Medicaid, then you are going to have to pay out of pocket.
I hope this answers the question about how to pay for long-term care. Our clients are encouraged when told how to minimize out-of-pocket expenses and get qualified for Medicaid more quickly if they don’t have long-term care insurance.