Aging is just a part of life, and while many people will spend the final years of their life being cared for by their children, others will find it necessary to enter into a senior citizen facility. Long-term care is a necessity for the elderly, but it also helps middle-aged people, who are suffering from severe cognitive impairment and prolonged physical illness. However, before you move into a skilled nursing facility, it is crucial to protect your assets in advance, so they land in the hands of your loved ones and not the facility administrator’s.
Average Annual Costs
According to recent studies, it costs around $100,000 per year to live in a nursing home. This is money that most people do not have on-hand. Planning ahead will help you save for this lifestyle change and give you peace of mind, in knowing that you don’t have to worry about whether you can afford the fees, or whether personal possessions you want to pass on to family membersneed to be sold to pay for nursing home expenses.
Pay For The Costs Out-Of-Pocket
Although you might not have large sums of capital saved, you maystill be rich enough to be able to cover care costs using your private wealth. Bills do not usually need to be paid in one single payment. In fact, you can often pay expenses on a monthly basis, which will average around $6,000 to $10,000. Paying monthly is often more doable and can be done using your social security benefits or retirement funds.
Accept Financial Assistance From Family
Most children accept that they may have to pay for their parent’s long-term care, and are happy to help do so. Of course, many senior citizens have too much pride to accept such a generous offer, but others will not have any other choice. If possible, you should accept the assistance, because it can prevent the nursing facility from filing a claim on a share of your estate. If you find yourself in this type of situation, you will need to consider hiring an attorney. This professional can also help you write a living will, while you are still of sound mind and body.
Investing In Assets That Are Not Counted By Medicaid
It can be extremely expensive to enter a nursing home if you have medical conditions that require special care facilities. This is where Medicaid comes in to play, but not everyone applies for Medicaid and even if they do, it doesn’t always cover everything. Often, many people are not aware of the fact that Medicaid eligibility does not apply to certain assets. For instance, when the state is determining whether you are eligible, they do not factor your home, car, or personal effects into the equation. This means that if you had a savings account of $100,000 on which your eligibility will be judged, your spouse could take money from that account and buythings that keep your overall wealth such as jewelry.
Spending the money in your savings account may not seem like a great idea, but it can greatly accelerate your Medicaid qualification. For instance, because you have $100,000 in savings the state might determine that you have $30,000 too much to qualify for Medicaid, but if you spend that $30,000 on home repairs, a car, or personal effects, you will now qualify – without reducing your wealth.
Issuing A Irrevocable Trust
There is a good chance that you have heard about trusts, but what you might not know is that there are several different kinds of trusts. For instance, you have an irrevocable trust and a living trust. Irrevocable trusts are exempt from nursing home costs, whereas a living trust is not. So, if you place your money into an irremovable trust prior to entering a nursing home,yourwealth will be completely safeguarded. However, there are some disadvantages. For example, you will not be able to receive principal from the trust. However, the interests and dividends will be safe.
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