Massachusetts Estate Planning & Asset Protection Blog

Massachusetts Estate Planning Attorney | Last Mintue Planning to Avoid Nursing Home Poverty

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Nov 09, 2012

Lawrence Case Study

The Lawrence Family initially contacted our office looking for help upon getting referred by their financial advisor.   They were confused because they were told that they should deed their home to the children.  Like many people we have helped, their home was their largest asset.  When asked if they liked the idea of their children paying $150,000 in unnecessary capital gains on the sale of the home, they said of course they did not.  With our advice,  Mr. & Mrs. Lawrence decided not to transfer their home to the children, avoiding that expensive MISTAKE.  Instead, when they sold the home, the sale was tax-free and the proceeds were added to their life savings.asset protection, estate planning

Failure to Act Costs Thousands:

Plan Ahead to Protect Your Life Savings

Unfortunately for the family, they did not follow our other strong recommendation at the time and for a number of years thereafter to protect their life savings from being spent down on long term care costs.  As a result of their failure to plan ahead, their life savings had to be used to pay $16,000 a month to a care facility, a cost that Mr. Lawrence and Mrs. Lawrence incurred when they both ended up in the same long term care community.  Mr. Lawrence was in the nursing home and Mrs. Lawrence was across the courtyard in assisted living. 

The Lawrences incurred these costs 6 years ago.  If the care had been for two people it would have been much higher.  At todays rates, nursing home care for one person costs and average of $12,000-$15,000 per month.  That's $144,000-$180,000 per year.  The cost is completely avoidable however, and could have been avoided if Mr. & Mrs. Lawrence had come to us in advance. They could’ve protected everything and even passed the Medicaid 5 year look back period.

It’s Never Too Late, Emergency Planning is Possible

All was not lost for Mr. & Mrs. Lawrence.  Fortunately their son and daughter came to us in time to help the family with some advanced asset protection planning. Both children lived out of town, one in Oregon and the other in Europe. But we had a chance to meet with the family before Mr. Lawrence passed away.  Our teams of professionals were able to help protect $500,000 for Mrs. Lawrence from being forced to be spent on her long term care costs. Because of our successful advanced planning to help the family, we enabled Mrs. Lawrence to remain in assisted living, which is not paid for by Medicaid, AND she was able to keep additional funds for living expenses and medical expenses, which would otherwise have been paid to the nursing home for Mr. Lawrence’s care.   Needless to say at this time of crisis when Mr. Lawrence was in his last days, the family was relieved with the results they accomplished.  The planning even survived review by the Medicaid Board as qualified long term care costs to be paid for when the time came.

Are Increased Medicaid Look-Back Periods on the Horizon?

Long term care planning is a very confusing area, especially with the new health care reform, but all families’ have an opportunity to plan ahead and beat the Medicaid program’s 5 year look back. It should be noted that it is critically important for people to get their planning done now.  The look back period was increased from 3 to 5 years a short time ago, and many are now speculating that another increase somewhere in the neighborhood of 8 to 10 years is coming some point down the road.  The good news is that everything can be protected well in advance so families are not forced to spend their life savings, lose their home, and impoverish the spouse to pay for a nursing home.  In every scenario, planning ahead to defeat the five-year look back is much more effective. 

New Guide Reveals How Health Care Reform Impacts You

The stock market, investment, and retirement accounts have fallen in recent years, but medical and long term care costs continue to rise.  In Massachusetts, one-month in a nursing home costs an average of $12,000-$15,000 per month.  Additionally, as a result of the Supreme Court’s decision upholding the Affordable Care Act as there will be a number of significant changes to the health care system in the United States.  Seniors and Boomers, are concerned about how the Affordable Care Act will impact their lives, future, finances, and health care. Because health care reform and increasing long term care costs are on the minds of so many we have written a new book called the Senior & Boomers’ Guide to Health Care Reform and Avoiding Nursing Home Poverty.  The guide contains hidden benefits on how new healthcare laws will affect your family, healthcare, Medicare and Medicaid coverage as well as little known secrets many smart families are already using to avoid nursing home poverty.     

While the boomers are in their 50’s and 60’s now, before you know it, they’ll be moving on to thier 70’s and 80’s. The senior segment of the population is growing five times faster than the rest of the population. Just like the seniors that we serve today, many Boomers have these same concerns.  It is so important for us all to pay attention to what’s going on with health care reform.  This guide was written to be a helpful resource to navigate and understand some of the changes brought about by the Health Care Reform.  With or without health care reform, we all need to take responsibility for our own savings and planning.  People need to be smart about how to protect what is most important to them. At the Estate Planning & Asset Protection Law Center, our professional team has helped many families in Massachusetts protect their home, spouse and life savings, so if and when the time comes to go to a nursing home, people are not forced to spend their life savings down. 

Unfortunately many learn too late that Medicare will not pay for nursing homes.  Medicare only pays for diseases for which there is a cure and the patient can recover.  If you want to learn more, you can read about it in the Seniors & Boomers Guide to Health Care Reform and Avoiding Nursing Home Poverty.

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We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

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Tags: Estate Planning, assisted living, Wellesley, Massachusetts, Nursing Home, case study, asset, protection

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