(Isn’t that really the question?)
The rising cost of long-term care is a reality that many families are faced with daily. Whether in the home or in a skilled nursing facility, families struggle to find ways to pay for their loved one’s care. Many individuals desire to receive long-term care in their home; however, due to high costs and other issues that arise, at some juncture, many seniors end up in a less preferable setting. Often, seniors look to public benefits (Medicaid) to help cover their long-term care costs. Failing to plan in advance may result in ineligibility for these benefits.
Many have an overarching desire to leave an inheritance for their heirs. They do so to show their love while at the same time maintaining a feeling that the sum of their life was a success. In the past, it might have been easier to preserve an inheritance. Today, without a great deal of advance planning and consideration, leaving a legacy for family members can often be challenging. The increasing long-term care costs, pressure by the government to ensure that tax dollars are spent appropriately, as well as increased longevity make it much more impracticable to ignore the status quo.
When considering long-term care planning, a primary focus is placed on the techniques that may be utilized to protect assets from having to be liquidated to pay for the exorbitant care costs that arise in the future. Unfortunately, it is not always easy to “have your cake and eat it too.”
When many people begin to think about retirement, a common concern expressed is the protection of their primary residence. The big question is whether there is a way to protect the home if they incur potentially large long-term care or nursing home costs. Simple planning and knowledge of the Medicaid 5-year look-back period could save headaches later and help achieve asset preservation to fulfill inheritance goals. Waiting too long could leave you with little or no options. Also, failing to transfer your primary residence without retaining the legal right to live in the home, either with life use or through a lease, could be detrimental to you.
It is not as easy as just deciding one day to transfer your residence to your children. We all hope that we will live long and prosperous, healthy lives without incurring significant out-of-pocket long-term care costs, but reality teaches us differently. Consideration of tax implications, sale of the residence, real estate expenses, Medicaid eligibility, and the effect on your children’s finances have to be made before your house or other assets are transferred to them. It goes without saying that you should consult with an Elder Law Attorney to discuss the implications of transferring your home or other assets to your heirs. Proper asset planning to legally protect your assets begins with the establishment of a long-term relationship with an attorney that deals with you as a person, on a personal level.
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