Elder law attorneys provide assistance to clients that are preparing for the eventualities of aging. Long-term care is one of them, and you should absorb some facts about the subject so you can approach it realistically.
You will probably need long-term care.
Most people would naturally assume that they will never need paid living assistance. Yes, they may get a little help here and there from family members and friends, but that should be sufficient.
In fact, the statistics tell a different tale. The United States Department of Health and Human Services (DHHS) has found that 52 percent of senior citizens will incur long-term care expenses.
This definitely gets your attention, and 35 percent of elders will leave their homes and move into nursing facilities.
Nursing homes costs can consume your legacy.
If you have to pay out of your own pocket, nursing home expenses can potentially absorb everything that you intend to leave your loved ones. In the Burlington, Vermont area, the median annual charge for a private room last year was $134,320.
In-home care that is provided by a paid home health aide is expensive as well. You are looking at a median charge of $68,640 in 2020, and this represents a 9.09 percent increase over the 2019 figure.
More than half of seniors that receive paid care get the assistance for more than one year. Just under 20 percent are in 12-to-24-month range, and 21 percent incur long-term care expenses for between two and five years. Thirteen percent get paid living assistance for more than five years.
Medicare will not help.
You may expect Medicare to pick up long-term care costs since it is a health insurance program for seniors. There are those that would say that it is not fair, but in fact, Medicare does not pay for custodial care.
Medicaid can provide a solution.
The Medicaid program pays for most of the long-term care that is being received by seniors in the United States. Even though it is a need-based benefit, many people that were never poor qualify for Medicaid to pay for living assistance.
Some assets do not count.
There is a $2000 Medicaid asset limit, but some assets are not counted, including your home. In Vermont, the equity limit is $603,000, and there is no equity limit when a healthy spouse, a blind or disabled child, or a minor is remaining in the home.
Other non-countable assets include wedding and engagement rings, heirloom jewelry, a single motor vehicle, furniture and other household items, and personal effects.
There is a 60-month look back period.
When all this information starts to take shape in your head, you would naturally consider gift giving to qualify for Medicaid if you need long-term care. This is possible, but you may need the income that is generated by assets that you would have to give away.
Under these circumstances, you could convey resources into an irrevocable trust. The principal would be out of your reach, but you could receive distributions of the trust’s earnings.
This is a widely embraced strategy, but you have to act in advance because there is a 60 month look back period. You have to fund the trust at least five years before you apply for Medicaid.
There is an exception to the rule.
If one of your adult children has been living in your home providing a level of care that has enabled you to live outside of a nursing facility, you can qualify for a child caregiver exemption.
You could give the home to the child and the look back would not apply if you have to enter a nursing home.
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When you work with a Burlington, VT elder care planning attorney from our firm, you can develop a plan for aging that will culminate in the optimal passing of your legacy. If you are ready to get started, you can call us at 802-879-7133 to set up a consultation appointment.
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