I just read an article from the Time Magazine online site: it addressed the soon to be big problem concerning the long-term care that many of us baby boomers will require in a very short time.
Here is a quote: “A huge wave of baby boomers may need long-term care in their golden years and yet fewer than half have taken steps to prepare for it. That’s the sobering conclusion of a recently released industry study that shows two-thirds of Americans believe it’s important to plan for long-term care, but only 44% have taken steps to protect themselves and most of those steps only involve boosting their savings accounts. But while it’s clear that not enough people are thinking about preparing for their long-term-care needs, it’s not at all clear what, if any, the best solutions are.
While some may not know what the solutions are, I have some options for you. Having worked for many years to help seniors, or the families of seniors, with planning for long-term care and nursing home charges, I have compiled a list of Ten misconceptions about what you should and should not do:
10 Asset Conservation Planning Mistakes That Can Be Avoided
Mistake #1: Relying solely on a will or a living trust. A will takes effect only upon your death, and a living trust, although preferable to a will in some cases, will not protect your assets from the government and nursing home costs (and may even interfere with accessing government benefits, unless amended).
Mistake #2: Relying on Medicare or health insurance. Neither Medicare nor health insurance pays for the cost of long-term care in a nursing home. With the average nursing home cost ranging between $5,000 and $9,000 a month, without a Proper Plan, most families will run through their life savings and lose their homes. You may plan to pay yourself, purchase long term care insurance, or access the government benefits that you pre-paid for with your tax contributions. Without a proper plan, you will pay out-of-pocket.
Mistake #3: Transferring all assets to children or other relatives. This almost always results in lengthy, unnecessary periods of ineligibility when government long-term nursing home care subsidies are applied for. And the tax consequences can be devastating. Often, it’s wiser to do nothing.
Mistake #4: Placing all assets into joint ownership with another family member. This is regarded as though the assets are still owned by the original owner, and can result in lengthy disqualification periods. It does not shelter assets at all. It can also create unfortunate legal problems for families.
Mistake #5: Selling the family home to pay for nursing home care. This is never required, unless you fail to protect it. Yet people still believe they must sell to pay the nursing home.
Mistake #6: Not taking Medi-Cal estate recovery seriously. The government can and does sell your home after your death to recoup benefits paid out on your behalf, unless you protect it.
Mistake #7: Applying for a conservatorship or guardianship. This court-supervised method of dealing with a person’s incapacity is time-consuming, costly, burdensome, and restrictive. It will not help you protect assets from spend down in order to qualify for government payments. You must recognize this and plan accordingly.
Mistake #8: Relying on family members to “do the right thing” when critical health care and financial decisions need to be made. In the absence of a written plan to protect assets, and other planning documents, this is an awful burden to place on the members of your family. How will they know what to do? How will they know what you would want them to do?
Mistake #9: Not seeking the advice of a specialist in asset protection planning. Nursing Home long term care government benefits programs are a highly complex area of the law. Very few attorneys and advisors are experienced and educated to know and understand the laws and rules that apply. If you rely on the advice of others who are well-intended, but uneducated or inexperienced in this area, it will cost you.
Mistake #10: Doing nothing. Unless you have no home or assets to protect or you are unconcerned about how decisions will be made in the event of your disability or incapacity, you should take steps now to protect yourself. If you wait until it is too late, it will cost you.
For a no cost/no obligation consultation, call me directly at (949) 888-8229, f0r more information. I will review your eligibility options with you and tell you how much you could expect to receive in approved government nursing home payments for long term care.
Carl Leiter, government grants for nursing home costs, retired attorney, expert at (949) 888-8229,
When family members become ill and are unable to continue living independently, they should not lose their dignity, their homes, and the savings they worked a lifetime to accumulate. Good private residential nursing homes that feature daily activities and field trips can cost between $7,000 and $12,000 a month.
How do you prepare to help your spouse, friend, or parents qualify for help with nursing home costs? It is an involved and detailed process, usually best left to a professional whenever there is a home or more than $2,000 in assets to protect, but I compiled a basic list for your information.
The good news for seniors is that seniors are living longer. However, the bad news is that seniors who need long term nursing home care are faced with $60,000 to $90,000 yearly costs (the average), for a nice nursing home.