Planning For Long-Term Care As You Get Older

By Brittany Littleton

Elder Law is an aspect of estate planning that focuses on helping families make sure their aging and ill loved ones get the health care they need in an affordable way. Does your estate plan address the possibility that you may need long-term care as you age?

Many seniors are surprised to learn that skilled nursing facilities are not covered by Medicare. Because health care costs have risen much faster than most people’s investments have grown, Social Security income and retirement savings alone often are insufficient to pay for the cost of a nursing home – especially if one spouse is healthy enough to stay at home and your resources must still be available to cover that person’s living expenses, too. In these instances, Medicaid is often the best recourse for ensuring access to affordable long-term care.

Medicaid is government assistance with health care costs for some people with limited income or resources. Even if you have paid taxes for decades, you only qualify for Medicaid if you meet the government’s narrow definition of “poor.” However, it is a common misconception that you must deplete almost all your assets before you can apply for this assistance. With foresight, that tragic reality can be avoided. There are asset protection strategies that can give you and your spouse options to receive the quality of care you deserve.

The sooner you plan for long-term care, the more options you have. Most planning strategies include asset re-allocation that enables your family to retain the assets you earned over your lifetime. However, when determining if you qualify for the program, Medicaid looks back at any gifts you have made within the past five years. Your goal should be to build a long[1]term care plan at least five years before you need it.

It is important to note that long-term care planning means more than making gifts to your family. Outright gifts will expose your assets to bankruptcy, divorce or creditor issues. It is safer to use a unique type of trust, often referred to by elder law attorneys as a Medicaid Asset Protection Trust. When drafted and funded correctly, it can make sure your money stays in the family, protected from unforeseen hardship, while still allowing you to qualify for Medicaid when you need it. Attorneys that practice elder law are trained to do this complex advanced estate planning. I recommend looking for an attorney who is a member of the National Academy of Elder Law Attorneys. You can search for one near you at www.naela.org/findalawyer. You may be wondering what happens if you do not have the luxury of planning in advance. In that case, the tools available to you or your spouse are more limited, but here are still strategies that can expedite your qualification for Medicaid while preserving a significant amount of your savings. If you have loved ones who need immediate care, do not make the mistake of thinking your only way out of that dilemma is to spend all their money. Seek the advice of an experienced elder law attorney. Your loved one’s quality of life depends on it.

Brittany Littleton owns and operates Littleton Legal. Her practice focuses on business law, estate planning, elder law, trust administration and probate. She is a firm believer that clients are best served when their legal, financial and accounting advisors are working collaboratively to strategize and advocate on their behalf.
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A Signature Partner with BA Seniors, Littleton will write a column each month. If you have a question that you would like answered or a topic you would like to see covered, send your thoughts to Sean Simpson at sean@baseniors.org.

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