As we grow older, we often worry about what will happen if we become ill or incapacitated and need to be cared for in a nursing home. After all of our hard work accumulating assets, we don’t like to think of losing them paying for nursing home costs.
There are a few ways to protect your assets from nursing home costs, but in order to do this, you must plan ahead. You should talk with an estate planning attorney as soon as possible so you can begin the asset protection process.
Timing for Asset Protection Measures
You can protect your assets so that Medicaid will pay your nursing home costs, but you must have taken these steps at least five years prior to your need for nursing home care. Medicaid wants to be sure you are not acting quickly just to avoid nursing home costs.
Asset Protection Measures to Take Now
An overview of methods your estate planning attorney can do for you:
Draft a deed retaining a life estate for your real estate. The deed retaining a life estate names you as the life tenant. You name a trusted loved one as the remainderman. The remainderman has a future ownership interest in the property. You retain the right to live in your home until your death. You retain that right even when you are in a nursing home.
When you die, the ownership of the home transfers to your remainderman. Then, Medicaid has no claim to the home provided the life estate was formed at least five years before you entered the nursing home.
Create an irrevocable trust. When you put your assets into an irrevocable trust, you are no longer their owner. Therefore, Medicaid cannot touch them. You name someone you trust as an independent trustee.
Other possible options. Your estate planning attorney can explain to you other possible solutions. Ask about:
- How you can place your liquid assets into an annuity.
- Transferring part of your monthly income to your spouse.
- Use of a pour-over trust.
- Purchase of long-term care insurance.
Contact the Reecer Law Firm PLLC for Assistance
Dena Reecer is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. She is also the founder and owner of the Reecer Law Firm PLLC. She will review your portfolio and assist you with preparing all asset protection documents you need. Contact the law firm for more information about how she can help you.
