Many people are worried that their life savings will be lost if they ever require the care of a nursing home. However, with planning in advance, you can preserve your assets and still be eligible for government assistance. Medicaid places severe restrictions on your ability to give away your assets in order to qualify by apply transfer penalties. In general, the transfer penalty law has a 5 year look-back period, so the sooner you being your planning, the better off you will be.
Below are 3 tips for how to pre-plan your gift giving while retaining sufficient assets to provide for your care during the 5 year look-back period:
- Early inheritance. Some seniors choose to give their children an early inheritance, while retaining enough assets to allow them to pay privately for long-term care during the 5 years.
- Long–term care insurance. If you believe that you do not have sufficient assets to give your children their early inheritance and have enough remaining to pay for your care during the 5 year period, you may want to purchase long-term care insurance.
- Asset protection trust. Likely the most beneficial option is to transfer assets into a Medicaid irrevocable trust to protect them from nursing home costs. You may wish to keep a certain amount of savings readily available to you for the 5 year period, but you should thoroughly discuss this with your attorney.
These are just a few options to consider if you are concerned about needing long-term care within the next 5 years. Again, the quicker you begin your planning in life, the easier it will be to find the most beneficial means for protecting your family and your assets.
Contact Maura Curran today to schedule an appointment.