Long-Term Care Planning

What is Long-Term Care? 

Long-Term Care is the type of aid that people need in order to perform daily activities which include eating, bathing, dressing, and using the bathroom. Long-Term Care needs usually come up as part of the normal aging process, but it can also be caused by an injury or illness, such as multiple sclerosis, stroke, rheumatoid arthritis, or due to a cognitive impairment, such as Alzheimer’s disease. Long-Term Care facilities may also be referred to as private residence, assisted living facility, or nursing homes. 

Asset Protection 

For most people, the main goal of long-term care planning is to protect a lifetime of savings for children or other beneficiaries while qualifying for or planning for the possible need for Medicaid benefits. There are a multitude of factors that must be considered when planning and we are able to help you organize these factors. There are other options to consider, which have their own advantages and disadvantages.

You may have heard of some of these more common tools that can be used for asset protection: 

Life Estates 

A “Life Estate” is created by the owner(s) of the real estate deeding the
property to one or more persons through a Life Estate Deed, and retaining the right to live the the remainder of their lives. The deed can be made out to a person or to the trustee of a trust. The transfer is complete by recording the deed at the Registry of Deeds where the property is located.

Once completed both the person(s) holding the life estate and the person(s) to whom the property was transferred have a legal interest in the property. When the person(s) holding the life estate interest passes, the person (or persons) to whom the property was transferred to will own the entire interest in the property subject to any claims or burden on the property.

If the real estate owned by a person is deeded out using a Life Estate Deed five (5) years before that person applies for Medicaid, then the property will not be counted toward eligibility and will have protection from Medicaid claims after death. 

Irrevocable Income Only (Medicaid) Trust 

Medicaid Trusts, also referred to as Irrevocable Income Only Trusts, are irrevocable trusts set up to protect assets. These trusts can hold any assets, including real estate.

Medicaid does not count the assets in this type of trust as long as the trust is correctly set up, and the property was transferred into the trust more than five years before the application was filed. These trusts are very complicated and need to be approached, created and funded very delicately. 

Long Term Care Insurance 

Long-Term Care Insurance can cover all types of care in an assortment of settings, including your home, community, and an assisted living facility or skilled nursing facility.

Insurance companies usually offer a wide range of options that enable you to edit a policy based on what your needs are, as to ensure your coverage will cover if needed. 

Reverse Mortgage 

A reverse mortgage is a loan that is taken out against the equity in your primary residence and is usually used to obtain funds necessary to pay for long-term care.

If income or other assets are not available to pay for long-term care the reverse mortgage can provide a source for these funds and eliminate payments to existing mortgages to free up income to be used for care. 

Disability Planning 

If a person suffers from a disability, then they may be entitled to receive public benefits. However, a receipt of a gift or inheritance from a parent or relative could end up in a loss due to these benefits and unnecessary expenditure of funds that could be better used by the disabled person for their supplemental needs. 

Admission Agreements and Contracts 

Many long-term care providers require a contract or admission agreement to be signed before any services can be provided.

These are often complicated legal documents that need to be reviewed and explained. It is vital for these parties to get guidance and advocacy in order to explain what the terms and provisions are in these types of agreements. 

Interested in Working With Us?

If you need any help regarding your business or other legal matters please reach out to us directly here and schedule a call with one of our paralegals on our scheduling page here.