Asset protection planning helps
plan for how to pay for long term care. The national average cost of a nursing
home is over $6,000 per month. Nursing home costs generally exceed the average
person’s ability to privately pay, and approximately 60% of nursing home
residents use Medicaid to pay for their care. Because of the high cost of long
term care, Medicaid planning recognizes that an individual may need at some
point to try to qualify for Medicaid to pay for long term care in a nursing
home. Medicaid is a needs-based program with its own current and ever-changing
requirements. To financially qualify for Medicaid, a person is permitted to have
$2,000 in assets and may keep only $40 of income. A person may be penalized for
gifts or transfers made for less than fair market value. For each approximately
$6,000 gift during the five year period immediately prior to any Medicaid
application, Medicaid will impose a one month penalty. There are complicated
planning techniques to help put individuals in a better position to qualify
when they need long term care in a nursing home. Careful planning can also help
to protect the person’s estate, whether to provide for a spouse or for
children.
Written by Heather W. Winter, Esquire
