Don’t Let Mom Lose Her Life Savings to a Nursing Home Tax Planning With Estate Planning When your aging parent needs nursing home care, although it can be difficult, it may also come as a relief if you have struggled to provide the necessary care on your own and it just may not be enough anymore. Do you understand, however, the cost structure of nursing home care and how you can help your parent protect a lifetime of savings from being completely swallowed by the cost of care? It can be very important. Let us discuss three ways to prevent Mom from losing her life savings to a nursing home. 1. Plan Early. The most important thing you can do when helping Mom preserve her life savings may be to start planning for the future well in advance of when those plans need to kick into action. Meeting with a qualified elder law attorney now to engage in long-term care planning can be critical. 2. Do Your Homework on Medicare vs. Medicaid. If you are hoping that Medicare will help with nursing home costs, you may be out of luck. Medicare typically only covers 100 days of nursing home care, and chances are that Mom will need a lot longer than that. If she qualifies for Medicaid, then the Medicaid program in her state will take over when Medicare benefits are no longer enough. Medicaid will cover nursing home costs for qualified individuals for as long as they need it. The catch? Medicaid rules require you to spend down most of your life savings prior to qualifying for the program. Medicaid will look back over your past 5 years and see what you held in assets and what your income and expenses were during this time period. 3. Stay 5 Years Ahead in Planning. A qualified elder law attorney can help you plan around this 5-year “lookback” rule to protect Mom’s life savings. The best way to do this may be to ensure that her assets are transferred out of her estate prior to the 60 months before she needs nursing home care. Since the need for this care may be on the horizon, it can be best to start planning early. Your attorney can work with you to figure out the best approach. To develop a plan as to how your parent can cover the cost of long-term care, our office is here to assist. Reach out to us today to schedule an appointment.
