As elder law attorneys, we speak with a lot of people that are interested in learning about the eventualities of aging from a legal and financial standpoint. This gives us a unique perspective, because we know exactly what most folks are thinking about. With this in mind, we will share a hypothetical conversation between one of our attorneys and an inquisitive client.
What specific matters do elder law attorneys address?
Elder financial abuse is one of the issues that you should consider when you are looking ahead toward the future. Without going into extreme detail, suffice to say that a significant percentage of seniors are taken advantage of financially toward the end of their lives.
Once you gain an understanding of the problem, you can take the appropriate legal steps to protect yourself before you become vulnerable.
Abuse is a looming threat, but the elder law issue that has the most wide reaching impact is the matter of long-term care. Most senior citizens will eventually need help with their activities of daily living, and it is very expensive.
When you say “most,” where are you getting that statistic?
The United States Department of Health and Human Services maintains a website called LongTermCare.gov. This site has stated that seven out of every 10 senior citizens will need help with their activities of daily living at some point in time. Approximately 35% of them will reside in nursing homes.
How expensive is long-term care in the Albany, New York area?
Genworth Financial does a nice job of keeping tabs on the state of long-term care costs around the country. Their cost of care survey for 2019 found that the median annual charge for a private room in an Albany area nursing home was $147,825. The average length of stay is 12 months, and your family should prepare for two rounds of nursing home costs if you are married.
You don’t have to worry about these expenses if you will qualify for Medicare, right?
Since Medicare is a government health insurance program that was designed to provide a safety net for senior citizens, this would be a logical assumption. Whether it makes sense or not, Medicare does not pay for a stay in a nursing home, because it does not cover custodial care.
Is there a solution?
The most widely embraced solution is Medicaid. This jointly administered federal/state government health insurance program will cover custodial care if you can gain eligibility.
That’s great, but Medicaid is for poor people, and I have resources. What about me?
It is true that Medicaid is a need-based program, so there is a $15,450 limit on countable assets in New York. However, some things that you own do not count, including your home, though there is an $893,000 equity limit in 2020.
Other assets that would be exempt include wedding rings, engagement rings, heirloom jewelry, one motor vehicle, household items and personal effects, and prepaid burial plots.
You can have up to $1500 set aside for final expenses and the same amount of whole life insurance. There is no limit to the amount of term life insurance you can carry, because this type of coverage has no cash value.
What do you do with assets that are countable?
First, you should understand the fact that a healthy spouse could maintain his or her half of shared assets up to a certain limit. This is called the Community Spouse Resource Allowance, and the maximum allowance in our state is $128,640 this year.
Other than that, you could engage in a process called a Medicaid spend down.
Can I just give these gifts after I find out that I need living assistance?
You can, but you would be penalized if you give away assets within five years of the date of your application submission. For this reason, it is important to plan ahead in advance with the benefit of legal counsel.
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We are here to help if you would like to discuss Medicaid planning with a licensed elder law attorney. You can send us a message to request a consultation appointment.