Do I need an estate plan? Or maybe you think you don’t. Well, think again!…
Aging is not easy. It can take a toll on your health and your wallet. Both home care and nursing home care are very expensive. It is not necessary to spend your entire savings, or worse, sell your home, just to pay for care until you qualify for Medicaid benefits. Planning for your long-term care in advance will give you peace of mind and save your assets for your heirs. Here are three estate planning strategies to consider when planning for long-term care.
You can pre-pay your funeral, your spouse’s funeral, your children’s funerals, and the spouses of your children’s funerals in an unlimited amount by entering into an Irrevocable Burial Contract.
Real property may be transferred to a spouse, a child living in the house for at least two years or a sibling with an equity interest in the property who resided there for at least one year, without incurring a Medicaid penalty period. Other assets can also be transferred to a spouse or disabled child without incurring a penalty.
A Trust is a common estate planning strategy and an invaluable tool. The creation of an Irrevocable Trust (a trust that cannot be changed by the maker alone) has the benefit of creditor protection, maintains your real property tax exemptions, and starts your look-back period for Medicaid, which is currently 5 years for nursing home and 2 ½ years for homecare (as of January 1, 2022). After the expiration of the look-back period, any assets held by the trust are not counted as a resource for Medicaid eligibility. You control the ultimate disposition of your trust assets upon your death. The Trust also avoids the need for costly probate and administration proceeding upon your demise. Also, under the current law, since a Trust avoids a court proceeding when the Medicaid applicant passes, the trust assets are not subject to an estate recovery lien and pass free and clear to the heirs.
Consider these three estate planning strategies when planning for long-term care. Our experienced attorneys are here to help you plan for the future and provide you with the peace of mind you deserve. Please call our office to further discuss the benefits of planning ahead for your care.