As you get older and your health deteriorates, you might have to leave your home and move into a long-term care facility. Whether it’s an assisted living facility, a nursing home, or another form of senior living, this can quickly become extremely expensive.
Long-Term Care Planning
If you’re worried about paying for the needed care, before entering the facility you should talk to an estate planning attorney about how to protect your assets. Some recommendations they might make are below.
1. Give Money to Family, Friends Before Getting Sick: Typically, no one can predict when they are going to get sick, or when a life-changing accident will occur. This makes this step difficult to accomplish, but it’s an important task to save your assets from long-term care costs. Giving money to your loved ones before you get sick – an early inheritance – can protect it from creditors looking to collect money for your care after your death. Transferring this money and other assets before getting sick lets your family legally keep the gift.
2. Create a “Life Estate” With an Attorney: With the help of an estate planning attorney, create an agreement with a loved one (a person who will inherit your home) to allow you to live in your home as a tenant. You can live there until your death. At that time, the designated person will take on ownership of your home. Following this process will prevent the state from making a claim against your property to cover medical expenses. There are some details your attorney will make you aware of. If you establish this transfer five years before entering a long-term care facility, you will not face any financial penalties. However, if you establish it within five years of entering a facility, then you may face a penalty for transferring the property.
3. Make Regular Payments To Your Spouse: Your estate planning attorney will make you aware of the Federal Spousal Impoverishment Act and encourage you to make monthly payments to your spouse. This act protects spouses of long-term care patients by letting them exclude their income when paying for their loved one’s care. As long as your spouse’s monthly income is lower than the exempt amount, you are allowed to give them money each month. This income is then considered exempt income for your spouse, and it’s protected by law.
4. Create an Irrevocable Trust: When creating a trust, consult an estate planning attorney. While a living trust is not exempt from long-term care costs, an irrevocable trust is. The interest and dividends you receive from the trust are protected and cannot be seized by creditors.
5. Establish a “Pour-Over” Trust: In this type of trust, you protect your assets while letting you access money in your trust. To establish this, you need to create a will to include a testamentary trust that provides for the welfare of a surviving spouse. Some funds will “pour over” into the living spouse’s estate, and the testamentary trust protects your money from being seized for your care costs.
Why Hire Us to Assist With Long-Term Care Planning
If you are worried about losing your assets to your long-term care facility, it’s essential to hire an estate planning attorney to discuss your options and determine how to protect your money and estate. Let our experts at Johnstone Adams LLC help.
Ranked in the 2023 U.S. News – Best Lawyers® “Best Law Firms” list regionally in 12 practice areas, we have experts in many areas of law to give our clients top-notch representation. In business for more than a century, our firm can mix its experience with the ability to evolve with the changing times.
To get started, contact us at 844-682-7682 or firstname.lastname@example.org.