At some point in your life you may find yourself facing the need to move to a nursing home. Along with the emotional impact of that decision there are also practical and financial implications that go along with needing nursing home care. The cost of nursing home care, for example, is typically a concern for the average individual or couple. You may have heard stories about nursing homes trying to seize assets of residents and even their children as a way to cover those expenses, leading you to wonder “ Does a trust protect my assets from a nursing home? ”
Long-term care in the United States is undoubtedly expensive. Nationwide, the average cost of a year stay in a long-term care facility runs over $75,000 – and costs continue to rise each year. Given the fact that the average length of stay in a long-term care facility is 2.5 years it becomes clear how long-term care costs can deplete a life savings if you are paying out of pocket. What about your assets though? Once you have exhausted your savings can a nursing home come after your assets as well in an effort to collect payment?
There are actually two separate issues when discussing assets and long-term care costs. First, a nursing home can directly bill a patient for costs associated with care. When the nursing home bills the patient the facility has all the same recourses as any creditor when trying to collect a debt. In that case, assets that have been transferred into the right type of irrevocable trust are typically safe from all creditors.
The other issue though involves Medicaid. If you are trying to qualify for Medicaid the program will consider both your income and assets when determining eligibility. Assets that exceed the program limits will cause you to have to go through the “spend down” program before Medicaid will help pay your nursing home expenses. If, however, you planned ahead and included Medicaid planning in your estate plan any assets you transferred to the right type of irrevocable trust may be safe if they were transferred over five years ago. Medicaid’s five year “look-back” period allows the program to count the value of any assets transfers within the previous five years when determining eligibility.
Finally, the Medicaid Asset Recovery Program allows the Medicaid program to seek reimbursement from a recipient’s estate after death. Under certain circumstances, assets that remain in a trust after the recipient’s death can be accessible to the Medicaid program to reimburse the program for expenses incurred. Fortunately, however, there are a number of exceptions to the program’s ability to seize assets, meaning that a spouse or other dependent may be able to hold on to important assets even if Medicaid comes looking for payment.
If you have additional questions or concerns about Medicaid eligibility, asset protection, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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