For many people, getting older means planning where they will live if they need a little help getting through the day at some point in their later years. They might be able to receive this help in their home, or they might need care in a long-term care center.
While nobody likes the idea of losing their independence, one’s health can deteriorate sooner than expected. We all hope we will retain good health and mental function well into old age, but it’s vital to prepare for any scenario – and sooner, rather than later.
Long-Term Health Care: Statistics and Expenses
Nearly 20% of Ohioans who reside in nursing homes are under 65. Many of them may require long-term care for 20-30 years or more, with all the ensuing expenses.
If you’re 65 or older, you have a 70% chance of needing long term care in your lifetime. As the number of Ohio seniors should triple by 2040, extended health care becomes a pressing concern for more and more of us as we get older.
A private room in an Ohio nursing home costs $7,500 to $14,000 per month, based on what our clients are telling us before they work with us. That ranges from $90,000 to $168,000 per year, an amount that will wipe out most families in a fairly short period.
In-home care is also extremely expensive. Round-the-clock in-home care can cost $21,000 to $24,000 per month, or $250,000 to $288,000 per year, which most of us simply cannot afford for any length of time.
Dealing with Health Care Expenses and Applying for Medicaid in Ohio
Since most people don’t realize there are options to simply spending down their assets on long-term care until they are broke, far too many families are wiped out financially by this cost.
For seniors who qualify for Medicaid, the program might be the best option to assist with medical care coverage. Unfortunately, Ohio Medicaid implements strict asset limits for applicants. For example, a single person’s total assets must not exceed $2,000. The spouse of a Medicaid applicant can keep a maximum sum equaling no more than $130,000 of the couple’s assets, not including their home; however, the home might end up having a Medicaid lien placed on it.
These severe restrictions can create an impossible situation for many people applying for Medicaid whose income isn’t anywhere near enough to pay for long-term health care out of pocket.
How an Elder Law Lawyer Can Help with Medicaid Planning
Some people mistakenly believe that they can preserve their estate by transferring property and assets to family members before applying for Medicaid. However, Medicaid regulations regard such transactions as “improper transfers.”
If you or a family member applies for Medicaid, you will need to provide statements for any financial accounts going back five years, a time known as the “look-back period.” Any transactions that look like improper transfers, including gifts to family members, within this timeframe will invite scrutiny and may result in a penalty period during which Medicaid will not cover long-term health care costs, including nursing home costs.
The conclusion is obvious: The best strategy is to plan to protect your assets long before you or your loved one needs Medicaid to help pay for care and assistance. That will ensure that you and your family can preserve as much as is possible, perhaps everything you have.
Surprisingly, there are times when, even with less than five years to plan, even when someone is already in a care center, that a significant portion of their assets may still be protected. Each situation will need to be evaluated individually. Still, the conclusion here is the same, the sooner you or your family reaches out for help, the more that is likely to be protected.
Asset Protection Trusts
An irrevocable asset protection trust is a secure, legal, long-term estate protection method. The assets transferred to such trusts do not count for Medicaid purposes after five years. These trusts can also be used to protect assets in other situations, including when someone needs care with less than five years’ advance notice. However, it usually takes a skilled elder law attorney to negotiate the best strategy to achieve these results.
Jarvis Law: Protecting People, Property, and Assets
As you grow older, it is wise to think about protecting what’s most important to you: financial stability, personal dignity, and your family’s future. Our team can help you create a roadmap for the future for yourself and your loved ones.
Call us today at (740) 653-3450 to see if you qualify for a free or no-cost consultation. We can talk to you over Zoom or meet you in one of our three office locations: Lancaster (740) 653-3450, Dublin (614) 495-4185, or St. Clairsville (740) 699-2193. You can also contact us using our online form.
We also provide three in-person workshops (one near each of our three offices) and a Saturday live webinar each month.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.