Retirement is one of those things that most of us fantasize about at some point in our lives. It’s even common to imagine that we’ll always have at least reasonably good health as we settle into our senior years, comfortably enjoying a quiet retirement in our own homes. Sadly, most of us probably won’t enjoy that perfect retirement. In fact, the government estimates that more than two-thirds of seniors will require nursing home care. Worse, roughly one-fifth of those seniors will end up staying in a long-term care facility for five or more years. Given that nursing home care is more expensive than ever before, it’s important to consider how that care will be financed. Here are five ways that you can beat those high nursing home costs.
Set Aside Enough Wealth to Cover Those Costs
The easiest way to deal with the high cost of nursing home is to pay it using funds from your estate. At more than $200 per day, however, there are few seniors who will be able to choose that option. Still, that doesn’t stop some seniors from attempting the feat. Many seniors have started out paying for their care on their own, only to turn to other payment options when their wealth became exhausted. Obviously, this option is one that might only appeal to the richest families. Most seniors and their families typically search for less expensive options to deal with these costs.
Rely on Your Children
You can also try to rely on your children to help cover the costs of care. That used to be a more common option decades ago, before nursing home costs skyrocketed and managed to price most families out of the market. Today, that is a far less popular choice for families – though some still try to manage the feat. Some seniors transfer wealth to their loved ones and then rely on those relatives to help pay nursing home expenses. That can be an effective strategy, but could also impact Medicaid eligibility if those transfers were made at the wrong time or in an inappropriate manner.
Educate Yourself about Medicaid
The most important thing that you can do to beat those high nursing home costs is to educate yourself about your options – as well as the possible obstacles and pitfalls that you could encounter in the future. It is especially vital that you know as much as you can about Medicaid for long-term care, since that program is such a vital component in many seniors’ nursing home strategies. Without those benefits, millions of seniors would be unable to afford the care that they need in their later years.
Medicaid can pay for your nursing home expenses, but only if you can meet the program’s strict income and asset limits. Those asset restrictions only allow you to have a total of $2,000 in wealth, so you’re likely to find that you have too much money to qualify for benefits, but not enough to pay for your own care. That could leave you with few options other than spending that money on care until you meet those limits – or using spend-down techniques to lower the value of your estate. Either option could leave you with little to leave behind for heirs when you die.
With Medicaid planning, you can use various estate planning strategies to organize your wealth in a way that secures many assets from those nursing home costs, while still allowing you to qualify for those benefits you so desperately need. Remember, though: the best planning results can only be achieved with early planning, since the program’s five-year look-back provision can make late planning more difficult.
Use an Irrevocable Trust2
Irrevocable trusts can be an essential part of any Medicaid planning strategy, or can be used for other general estate planning purposes. Either way, these trusts enable you to remove certain assets from your estate entirely, protecting them from things like the estate tax or Medicaid scrutiny – though the Medicaid benefits only apply when assets are transferred to the trust at least five-years prior to your application for benefits.
An estate and elder law attorney can help you to create irrevocable trusts that shield your wealth, while still providing you with ongoing income earned by the assets in the trust. Though you won’t retain control over those assets, you can still enjoy the benefit of their use while you’re alive. That can help to soften the sense of loss that some people experience when they think about signing over ownership of their wealth to such a trust.
Rely on Long-Term Care Insurance
Long-term care insurance exists, of course, but it’s not used as frequently as many experts would prefer. Part of that is simply a matter of practicality. It’s an expensive type of insurance, and one that most people have trouble justifying when there are so many other urgent needs in their lives. By the time older Americans start taking the idea seriously, those costs are even greater. Still, if you can afford long-term care insurance, it can be a great way to help reduce the impact of those future nursing home expenses.
You’re Not Alone!
If you’re worried about those high nursing home costs, it’s important to consider options like Medicaid today, before there’s an emergency need for care. Early planning can help to ensure that you have a well-developed strategy in place to safeguard your assets and secure eligibility for any program benefits that you might need to meet those expenses.
At the Fouts Law Group, LLC, our experts can help to craft the plans you need to accomplish those goals, protecting your assets and your loved ones from future harm. You could spend all your money on care and leave nothing behind to provide for your spouse and other loved ones, or you can engage in responsible planning that properly cares for all those important interests. To learn more about how you can beat those ever-rising nursing home costs, contact us online or give us a call at (404) 596-7520 today.
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