How to Keep Nursing Home Costs from Wiping Out Assets

Statistics show that the average life expectancy for Americans keeps increasing. The average life expectancy of men right now is 84.3 years of age. For women, it is 86.6. Along with increased longevity comes the reality of living with illnesses and diseases that often afflict the elderly. Many of these conditions eventually require an individual to be placed in a long-term care facility, such as a nursing home. Nursing homes are expensive and if a person does not plan ahead of time, their life savings and asset can become quickly wiped out, along with any legacy they had planned to leave their family. How can one protect their assets from being completely eaten up by nursing home costs?

According to current figures, the current annual cost of nursing home care is approximately $75,000–and continues to increase. Unfortunately, the majority of health insurance policies do not cover nursing home care. This leaves Medicaid as the only other option for most people; however, Medicaid has very stringent guidelines when it comes to coverage for nursing home expenses.

One of Medicaid’s rules is that a senior may not give away assets within the past five years before they are entering a nursing home. However, elder law advisors say there are ways to legally avoid having your entire estate pay for nursing home care.

One way is to make a substantial gift to an adult child at the minimum of five years before an anticipated admittance to a nursing home. That child–completely on their own–can then set up a special needs trust for the parent. Adult children who pay for at least half of their parent’s nursing home expenses are also entitled to claim that parent as a dependent for tax purposes.

There are several other considerations and options a person has when it comes to planning for one’s golden years. If you have questions on how to protect your assets from disappearing because of long-term care or nursing home costs, contact an experienced elder law attorney in Will County to find out what options will work best for you and your family’s future. Call Kezy & Associates at 708-518-8200 for a free consultation.