Asset Protection for Seniors Facing Nursing Home Care

Seniors in nursing homes face many unique challenges. One of these includes nursing home care and paying for it. An asset protection attorney Los Angeles can help you learn how to protect your family’s assets from the cost of care.

Nursing home care is very expensive, and it may not be entirely covered by insurance or Medi-Cal.  So, how can you plan to protect a senior’s assets if they require nursing home care? 

An asset protection trust and careful planning will ensure you are prepared to deal with the high cost of care.

What Is Asset Protection?

Every financial plan should include asset protection. It includes a variety of ways to protect your wealth and assets. It is focused on protecting your assets from creditors, and both individuals and businesses can benefit from it.

Asset protection includes any legal methods of protecting your wealth, but it doesn’t include any form of fraud or wealth concealment. Trusts are one of the most common forms of asset protection.

Why Do Seniors Need Asset Protection?

Seniors in nursing homes can benefit from asset protection because of the high cost of staying at a nursing home. Medi-Cal pays for only 100 days of a stay in a nursing home. After that, the expense typically falls on the patient, unless he or she qualifies for a needs-based program.

Anyone who isn’t prepared for this expense can easily burn through their assets and savings until they qualify for Medi-Cal. In some cases, this could include losing your home, car, and other valuable, essential assets. 

A Los Angeles estate planning lawyer can help you prepare for this possibility and protect your assets from the high costs of nursing homes. If you are prepared, you can use a trust to protect your assets so they won’t need to go toward the cost of your medical care.

What Kind Of Trust Protects Assets From Nursing Homes?

Medicaid asset protection planning is one of the best ways to prepare for a possible stay in a nursing home. 

A Medi-Cal Asset Protection Trust will remove assets from your name so you can qualify for Medi-Cal and have the program cover the cost of living at a nursing home.

An attorney specializing in trusts and asset protection can help you set up a trust to safely hold your assets for you. With fewer assets in your name, you can use Medicaid to cover the costs of your care.

Planning ahead of time will ensure that you are eligible for Medi-Cal and can use it to pay for your care.

What Happens to Your Savings When You Go Into a Nursing Home?

Unless you qualify for Medi-Cal, you will be responsible for the cost of your nursing home or long-term care. That means your income and assets will be put toward the cost of your care. 

This means that nursing homes can quickly drain your savings and cost you your assets. 

Medi-Cal is designed to supplement your existing income, it also pays the difference between your income and the cost of your stay. Someone with Medi-Cal benefits is allowed to keep only $2,000 worth of assets without losing their benefits. 

It’s a good idea to have an estate plan to protect your savings in a trust instead of having them go toward medical care. Creating a trust can help you structure your assets and avoid 

How Do You Protect Your Assets From Long Term Care?

The first step to protecting your assets from the costs of nursing homes or other care is to set up an estate plan. 

It’s important to do this before you need care, while you can legally sign paperwork and meet with attorneys. That way, the plan will go into effect once you need it. 

Your planning should include eligibility planning, which means arranging your assets so they will not disqualify you from meeting the financial requirements for the benefits. 

Income planning can help you reduce your share of the cost, or the monthly co-payment Medi-Cal expects from you, which is determined by your monthly income. Often, you need to pay your entire income into your care, and Medi-Cal will provide the difference. 

Medi-Cal recovery is the process used to get repayment for its services. It goes after the estates of deceased members to get this payment. However, a trust can protect your assets from being subject to this. That way, you can keep assets in your family instead.

Tips to Protect Your Assets

Careful estate planning is one of the best steps you can take to protect your assets. Set up a consultation with a lawyer to inform you of all the strategies available to help you keep your assets.

A qualified attorney can help you with every step of putting your plan into action, from filling out forms to implementing the strategy itself. The process may include other standard estate planning documents. 

Your attorney can also take care of all contact with the Medi-Cal office on your behalf. If you need to structure your assets to qualify for benefits, we will help you do so, in order to either reduce or eliminate the money you pay to Medi-Cal on a monthly basis.

Government programs like Medi-Cal are constantly changing, and it’s difficult to navigate through them alone. 

This kind of planning has a significant impact on your finances, and it must be done properly. A law attorney familiar with elder planning can ensure you are adequately prepared in the event you need long-term nursing care.

Conclusion

Nursing home care can cost more than $80,000 a year. If you think there’s a chance you may be dealing with this expense at some point, look into asset protection plans designed for seniors. Some basic planning can save you a lot of money and keep your assets intact.

To speak with a qualified Los Angeles estate planning lawyer who can help you make your estate plan and protect your assets, contact us at McKenzie Legal & Financial today.