Every month, Lawrence Cappiello writes a check to a nursing home for $12,000 to pay for the cost of his wife’s nursing home care. Two years ago, his net worth was $500,000. In less than two years, the Cappiello’s savings will be gone. This unsettling story is explained in the article “How to Keep LTC Costs From Devouring Your Client’s Life Savings” from Insurance News Net. He is suffering from nursing home sticker shock and says he should have known better.
Cappiello was a professor at the University of Buffalo for 25 years. During that time, he taught an introductory course on health care and human services that touched on the costs to consumers. He said it was clear even then, that the cost of health care was going to escalate out of control.
To qualify for Medicaid payments of nursing home care in New York State, residents are permitted to own no more than $15,450 in nonexempt assets. However, elder lawyers, whose practices focus on these exact issues, say that the way to protect the family’s assets, is to take steps years before nursing home care is needed. Some general recommendations:
- Establishing an irrevocable trust, that upon death, transfers the house to the beneficiaries. There must be language that ensures that you have life use of the house.
- transferring savings and other financial assets to an irrevocable trust.
- Gift way assets pursuant to a gifting program
In New York, transfers of any assets must take place more than five years before applying for Medicaid nursing home coverage. In California, such transfers must be done 30 months before applying for Medi-Cal (California version of Medicaid). In California, an elder law attorney can even devise a gifting program such that assets can be gifted away much less than 30 months before applying for Medi-Cal. In some cases, people with substantial net worth can gift away their assets in just several months before applying for Medi-Cal.
That is why planning with an experienced elder law attorney is so critical for families, especially when one of the spouses is facing a known illness that will get worse with time. There are steps that can be taken, but they must be done in a timely manner.
Many older people are not exactly jumping with joy at the idea of handing over their assets, even when relationships with adult children are good. Setting up an irrevocable trust can be a solution. By setting up an irrevocable trust, the elderly person can retain full control of the assets while qualifying for Medi-Cal.
It should be noted that a sick spouse can move assets to a healthy spouse, to make the sick spouse lawfully poor and eligible for Medicaid. There is no look back period or penalty for interspousal transfers. This sounds like a very simple solution. However, these are complex matters that need the help of an experienced attorney. If it were so easy, countless spouses would not be facing their own impoverishment because of an ill spouse.
Reference: Insurance News Net (Feb. 4, 2019) “How to Keep LTC Costs From Devouring Your Client’s Life Savings”
Lawrence Cappiello每個月都需要寫一張12,000美元支票給養老院，以支付他妻子在養老院的護理費。兩年前，他的淨資產為50萬美元。不到兩年，Cappiello的積蓄將會化為烏有。這個令人不安的故事在Insurance News Net的文章“How to Keep LTC Costs From Devouring Your Client’s Life Savings” 中說到。他給養老院的費用嚇一跳，但說他自己早應該知道。
參考: Insurance News Net (Feb. 4, 2019) “How to Keep LTC Costs From Devouring Your Client’s Life Savings”