When entering a nursing home, it is not unusual for one to worry about the financial implications and the potential depletion of their hard-earned wealth. The high cost of long-term care can quickly erode savings and assets, leaving families in a challenging financial position.
Fortunately, there are tools available to help preserve wealth and ensure you can be cared for without risking your finances. Understanding the available options can make a world of difference, helping you make informed decisions when entering a nursing home and safeguarding your financial future.
Medicaid planning and asset protection trusts
Medicaid is a program that helps cover medical costs, including long-term care for those who qualify. However, since it’s a government program, eligibility requirements are strict. Without proper planning, you might be required to spend down your assets to meet these requirements.
You can arrange your properties to match Medicaid eligibility requirements without depleting your resources. One popular method is the creating an asset protection trust(APT). With this type of trust, you can change the ownership of your assets to the trust, removing them from your personal estate. By doing so, you can qualify for Medicaid while retaining some control over your assets and ensuring they are protected for your beneficiaries.
Long-term care insurance
Another effective strategy for protecting your wealth is investing in long-term care insurance. This insurance policy covers long-term care services such as the cost of nursing home care and home health care. By paying premiums over time, you can avoid the financial burden of paying out-of-pocket for care. It’s vital to shop around and find a policy that suits your needs and budget, as costs and coverage vary.
Veterans benefits
For veterans and their partners, the Department of Veterans Affairs (VA) offers different benefits that can help finance the cost of long-term care. For example, the Aid and Attendance benefit gives monetary support to eligible veterans and their spouses to help pay for nursing home care, assisted living or in-home care.
It’s a good idea to start planning early and work with a legal team experienced in financial planning and elder law. With the right strategies, you can work to preserve your financial security and provide greater peace of mind for yourself and your loved ones.