Why You Should Make Sure Your Home is Protected Before Entering a Nursing Home

Nursing home planning concept

Many aging adults eventually require a stay in a nursing home or another type of long-term care. Often, one of the resulting concerns is what happens to a person’s home if they enter a nursing home. Fortunately, there are legal strategies that can help you protect your home, regardless of whether you eventually need to live in a nursing home. The farther ahead you plan, the more options you have. Assistance from a knowledgeable nursing home planning attorney is essential to take advantage of the available options for protecting assets from nursing home costs.

Planning Ahead Gives You More Options for Protecting Assets from Nursing Home Costs

If you wait until you or your spouse need to go into a nursing home or require other long-term care, the options for protecting your home and other assets are more limited than if you plan ahead. Since no one can predict when a health condition or accident (like a fall at home) may create the need for nursing home care, the best approach to planning for nursing home costs is to start early. In fact, talking with your estate planning lawyer in the year of your 50th birthday is an ideal time to begin the process.

One important reason for planning ahead relates to Medicaid benefits for nursing home costs. Often, individuals who think they may not qualify for Medicaid benefits actually can meet the income and asset eligibility requirements through careful planning. But there is a catch. Medicaid has a five-year look-back period for counting assets. Any asset transfers within the five years preceding entry into a nursing home may count toward your asset total and affect your eligibility. To ensure you clear the five-year hurdle, you must plan in advance for protecting your assets from nursing home costs before the need for nursing home care arises.

Lawyers who help clients plan for late-in-life nursing home costs and other care costs have a range of tools available for protecting assets from nursing home costs, while helping clients obtain eligibility for Medicaid nursing home benefits. Often, specialized asset protection trusts can be used to maximize protection of your property, including your home. Asset-conversion plans and Medicaid-compliant annuities are other tools that may help you protect your home and other assets.

Since your home likely is one of your most significant assets, and you want to preserve as much of the value to pass along to your family, talking with your attorney about protecting your home is a good starting point. But you also may have other assets that need protecting, like a retirement account, life insurance policy, or income-producing property.

Medicaid planning lawyers also have tools for protecting income and becoming eligible for benefits, such as a Qualified Income Trust. Even if you think you may not qualify for Medicaid nursing home benefits, it’s extremely important to talk with a lawyer who can apply the rules to your financial situation. Using strategies that are available under the Medicaid rules may enable you to become eligible.

Protecting Your Home and Receiving Medicaid Benefits

Chances are that you will not have to sell your home to qualify for Medicaid nursing home benefits, if your equity interest is less than the allowable home exemption, which is $603,000 in 2021. That amount increases periodically for inflation adjustments. In addition, specific Medicaid rules protect a community spouse who stays in the marital home when a Medicaid-eligible spouse goes into a nursing home.

While you may not need to sell your home when you enter a nursing home, there is a law that allows Medicaid to place a lien on your property during your lifetime, if you receive benefits for nursing home care, home services, or community-based services. Limited exceptions apply.

Medicaid estate recovery laws enable the government to recover from your estate after your death for the total amount of the benefits you received during your life. Estates valued at less than $25,000 are exempt from estate recovery. In addition, Georgia has a law that allows families to keep up to $25,000 of the value of a Medicaid recipient’s home after the recipient passes away. There also are exceptions for which estate recovery will be delayed.

If you plan ahead, you can avoid the five-year look-back rule for Medicaid assets and minimize the impact of estate recovery laws. If you wait until you need to enter a nursing home, there are still steps you can take, but you will have less flexibility and fewer options for protecting your assets from nursing home costs than if you plan in advance.

Medicaid laws and rules are extremely complex. You should never try to figure out on your own how they apply to your home and other assets. You also should never try to circumvent the rules on your own by taking action like gifting your home to your children. Instead, you should talk to a lawyer who understands all the laws and rules and can help you apply them to your personal and financial circumstances.

Talk With Our Georgia Nursing Home Planning Attorneys

In our Cartersville practice at Asset Protection & Elder Law of Georgia, we help seniors and their families address all the unique needs of aging adults. Nursing home planning and Medicaid planning are an important part of our services. If you need to plan for nursing home care and other long-term needs for yourself or a loved one, we can answer all your questions and help you make the right decisions.

We provide elder law and planning services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County. Call us at (770) 382-0984 or contact us through our online form.

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Categories: Elder Law, Medicaid