Long-term care is incredibly expensive. The average cost of long-term care ranges from $7,000 to $10,000 a month. Considering the average stay in a long-term care facility can be years, you’re looking at paying out hundreds of thousands of dollars if you need long-term care, which you most likely will. On average, 70% of individuals over age 65 will need some type of long-term care. And this number is slowly creeping up. As medical technology gets better, people live longer. However, the quality of life doesn’t necessarily increase. This means that more and more people live longer and require assistance in the form of long-term care.
Okay, you get that it’s expensive and that you’ll mostly likely need it, so how do you pay for it? Well, you have a few options: you could pay out of pocket. However, given the crazy cost, you couldn’t maintain that for long. Besides, that’s how you end up losing your hard-earned money and property. You could utilize a long-term care insurance policy. However, these policies are difficult to get, they can be expensive, and they are meant to supplement, not cover, long-term care (not that you shouldn’t look into getting long-term care insurance). Lastly, you can utilize the pot of money that you have been chipping into ever since you started working, Medicaid.
Medicaid is a lot like Social Security (SS). You pay into the system with every paycheck just like you do with SS. Except, with Medicaid, you have to apply and qualify. Most people tend to think that you cannot own anything if you want to qualify for Medicaid. That’s not true. In fact, you can own quite a bit of assets and still have your cost of long-term care covered. The key is to set a plan in place to 1) get Medicaid qualified while keeping your assets; and 2) protecting the assets you keep.
To get Medicaid qualified, you must think about preserving the value of what you own. There are assets that Medicaid considers exempt and other assets are considered non-exempt. Thus, an effective plan for preservation and qualification involves turning non-exempt assets into exempt assets—thereby preserving the value but removing those assets from the list of assets that Medicaid holds against you.
To protect your assets, you must set them up in such a way that they avoid probate. Probate is the process of transferring assets from an individual who’s passed away to their heirs at law. Probate is a default process that can be avoided by very useful estate planning tools. The reason why. You’d want to avoid probate is because 1) it is a long, expensive, and complicated process; and 2) probate is the opportunity for creditors—including Medicaid—to come after your assets after you pass away. If you avoid probate in the correct way, you avoid the creditors/Medicaid from coming in and taking everything you saved before it can pass to your loved ones.
Medicaid is a great option to pay for long-term care. With the correct plan, you can get your long-term. Care paid for and preserve your assets. If. You have a question about Medicaid or asset protection, give the experienced attorneys at McIntyre Elder Law a call at (704) 259-7040 or visit our website at www.mcelderlaw.com.
Brenton S. Begley
Elder Law Attorney
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”