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Old 12-27-2015, 02:37 AM
 
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Quote:
Originally Posted by imagardener View Post
Most people with assets don't want to live in the kind of nursing home that Medicaid pays for, that's what my lawyer said.
OP: if your banker said that a revocable trust will protect your assets from nursing home costs they are lying or stupid. Either way you should walk away from paying them money. An irrevocable trust might but you give up ALL control over ALL your money the minute you sign that trust document.

My great aunt signed over all her assets to her only child 20 years before she needed to be in a nursing home. Her daughter paid for the first couple of years and then the nursing home allowed her to stay on as a Medicaid patient. That's usually what happens after people exhaust their assets. Medicaid can ask for reimbursement after a Medicaid recipient dies and their home is sold after the surviving spouse dies too, depends on their state laws.

What do you think will happen when the boomers start needing nursing homes in about 15 years? Medicaid paying for all of them? No way. And I don't think many parents would sign over their assets to their children while they are still mentally able to function. Would you?

the idea is to save enough of your assets to get in to the home of your choice and pay a year or 2 . . once you are in , most homes will keep you once medicaid takes over payments .

while the nicer one's may not take you on medicaid day one they generally will keep you when you switch .

that is why we wanted the 3 years insurance . there isn't a place around here that wouldn't drool over 3 years payments at a very high rate compared to what medicaid pays

Last edited by mathjak107; 12-27-2015 at 02:56 AM..
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Old 12-27-2015, 04:23 AM
 
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Quote:
Originally Posted by mathjak107 View Post
the idea is to save enough of your assets to get in to the home of your choice and pay a year or 2 . . once you are in , most homes will keep you once medicaid takes over payments .

while the nicer one's may not take you on medicaid day one they generally will keep you when you switch .

that is why we wanted the 3 years insurance . there isn't a place around here that wouldn't drool over 3 years payments at a very high rate compared to what medicaid pays
A lot of assisted living facilities will not accept Medicaid, regardless of how long a resident has been self-pay.

I know of several families who were told that when the time came, the ALF would accept the lower payment. They did not.

While I have nothing against people who use every legal means available to protect their assets, be aware that while you are protecting your assets to pass on to your heirs, you may be living in a shabby Medicaid-funded facility.

Depending on your income, you may not even be eligible for Medicaid when the time comes.

My aunt's income was not enough to pay for even a low-cost ALF, however it was $300/month over the maximum allowed for Medicaid funding in her state. No place would accept her.

If the plan is for the ALF to keep you on when your money runs out, I would encourage that you get that in writing and reviewed by an attorney.
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Old 12-27-2015, 04:27 AM
 
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it is going to be very location specific . we looked in to our area here in nyc and very few homes did not accept medicaid after the fact of getting in .

assisted living is a lot more selective in that regard . but it is also a lot cheaper to sustain on your own then the 500 a day plus in a skilled nursing facility which is a typical rate here . . .

you can always make a case for getting more money out of irrevocable trusts for health purposes if needed, so by protecting assets properly you still can leave the door open to fund your own way if needed while still protecting assets if you don't have to . that can be a win/win .

personally i hate the restrictions imposed on our money with irrevocable trusts so i rather go the partnership route with insurance . we need no trusts to be fully protected .

even with irrevocable trusts you still have the income restrictions on the stay at home spouse which suck . trying to live on 2990 a month in nyc is near poverty .

you can still earn 69k as a family of 4 and qualify for a nyc low income housing project . you know what kind of life 1/2 that amount buys the stay at home spouse here ? a miserable one .

that would hardly cover just our rent and health and long term care insurance

Last edited by mathjak107; 12-27-2015 at 04:47 AM..
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Old 12-27-2015, 05:35 AM
 
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Quote:
Originally Posted by mathjak107 View Post
you may have a surprise waiting for you in regards to qualifying for medicaid should you deplete assets .

a house is a protected asset as long as you claim you will one day go back to it . even a certain amount of equity does not count towards the asset total you can keep when a spouse needs care .

so while medicaid can't take it while you are alive that changes when you die . anything that goes through probate is fair game to medicaid for recovery of expenses .

so a popular ploy is putting the house in a revocable living trust which keeps the house from going through probate and assets that don't go through probate can't generally be taken by medicaid . the catch 22 is the house in a revocable trust is a counted asset and as such can disqualify you from having medicaid eventually pick up the tab after you deplete assets .

the house loses its protected status under medicaid rules when in a revocable trust . that means all dollars count in the tabulation .

a Home Protection Trust is very different than the standard revocable “living trust” that many people have already set up. A revocable living trust does not protect your assets from nursing home costs. it only keeps the house from being taken but in no way does it help you qualify for medicaid in the first place . The Home Protection Trust is an irrevocable trust specifically designed to protect its holdings from loss if you ever have to apply for Medicaid to pay for your long term care costs. the value of the house does not count in the tabulation with the irrevocable home protection trust


Revocable Trusts and Medicaid: That’s a good thing, right? | The Elder Law Blog
If the remaining spouse is still living in the house, it is not included. They can only go after the house if the person was single. The house, one car, furniture, jewelry and in AZ $2,000 cash are excluded. I know because I filled out the form with a Medicaid caseworker.
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Old 12-27-2015, 05:39 AM
 
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not sure of the point you are making .

the issue isn't that the house isn't protected . it is protected even if you are single as long as you say you intend to go back one day .

the issue i am bringing up is it is only protected from being counted as an asset to see if you qualify for medicaid if the house is personally owned by husband and wife .

once it it goes into a revocable living trust it loses its exemption and the dollars count towards qualifying for medicaid .

medicaid still can't lay claim to the house in the trust but they certainly will not qualify you for medicaid in the first place because the house is in a revocable trust and the dollars count as an asset . .

that has zero to do with it being a protected asset and can't be taken . .

you may have to sell the house to spend down the value on care before medicaid accepts you if the house is in a revocable living trust and not a irrevocable trust .

protecting assets from being taken by medicaid is very different then getting assets excluded when you are trying to get qualified to receive medicaid .

so be very careful and aware that using a revocable living trust can be a catch 22 and in the end no help at all and in fact can hurt your ability to get medicaid . .

Last edited by mathjak107; 12-27-2015 at 06:03 AM..
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Old 12-27-2015, 05:41 AM
 
1,075 posts, read 1,117,388 times
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Quote:
Originally Posted by imagardener View Post
Most people with assets don't want to live in the kind of nursing home that Medicaid pays for, that's what my lawyer said.
OP: if your banker said that a revocable trust will protect your assets from nursing home costs they are lying or stupid. Either way you should walk away from paying them money. An irrevocable trust might but you give up ALL control over ALL your money the minute you sign that trust document.

My great aunt signed over all her assets to her only child 20 years before she needed to be in a nursing home. Her daughter paid for the first couple of years and then the nursing home allowed her to stay on as a Medicaid patient. That's usually what happens after people exhaust their assets. Medicaid can ask for reimbursement after a Medicaid recipient dies and their home is sold after the surviving spouse dies too, depends on their state laws.

What do you think will happen when the boomers start needing nursing homes in about 15 years? Medicaid paying for all of them? No way. And I don't think many parents would sign over their assets to their children while they are still mentally able to function. Would you?
Be very careful about signing over your assets to children. If at any point they were to either file for bankruptcy or if they were sued, those assets would be available. They will also have tax bills on the income generated on those invested assets.
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Old 12-27-2015, 05:49 AM
 
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divorce and taxes can be a problem too . as well as a gamble on the look back period .
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Old 12-27-2015, 06:09 AM
 
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My sister transferred money to me over several years to shield some of their assets. When my BIL was ready for the nursing home we had not met the 5 year look back period. All the money had to be transferred back. In the mean time, I was paying taxes on the money that was being invested. It was a real mess.
During his last month he was home and bedridden. I convinced my sister to hold off on purchasing the annuity because I was afraid we might make one little mistake and disqualify for Medicaid. She paid $9,000 a month for round the clock care. He died within a month.

So much planning had gone into figuring out which assets would count. I worked on this for several years. We were not trying to protect the assets for heirs, it would have impoverished my sister and depleted all of her savings. He could not have qualified for long term care insurance.
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Old 12-27-2015, 06:26 AM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,923,045 times
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Quote:
Originally Posted by mathjak107 View Post
that is a very valid point . many nice places in the tristate area only keep a certain amount of beds for medicaid patients day 1 .

but if you are already in and are a resident then they have no problem keeping you once you transition to medicaid .
I know some places will allow you to stay if you go broke spending your money as a resident. Perhaps there are also some that don't. But that's different than what the OP is proposing - which is impoverishing himself voluntarily before he needs any care. Robyn
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Old 12-27-2015, 06:35 AM
 
Location: Ponte Vedra Beach FL
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Quote:
Originally Posted by mathjak107 View Post
the states all have different waiting periods to apply for medicaid as far as how long you need to be a full time resident as well as different requirements to qualify .

State Medicaid Programs - Long-Term Care Information
Different facilities may have different requirements too. The local SNF we have used requires people applying for Medicaid beds to have been residents of the local tri-county area for 3 years before an application is even considered. IOW - you can't move your elderly parents here and expect them to find a Medicaid bed at this place the next day. Robyn
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