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What to Do With Your House When Entering a Nursing Home

Old man protecting house model with hands, Asset Protection

Aging is a part of life and may lead to needing long-term care. Going into nursing home care requires us to examine a host of issues, including how we should protect our assets, including our homes. Long-term care lasts from 2.5 years for women, to 1.5 years for men, on average. Nearly 14 percent of people who enter a nursing home will be there over five years. That is to say; we should have a plan in place for our homes before it’s time to enter a nursing home. 

The Cost of Nursing Home Care

The costs of nursing home care, and the burden it places on our families, can be enormous and, at times, overwhelming. There are ways to protect yourself from the costs of nursing home care. Often they can help ease the burden on families. While a plan can always be developed on an as needed basis, it is better to plan ahead whenever possible and avoid surprises. 

Most families cannot afford to pay the nearly $100,000 a year; it may take to keep a loved one in a nursing home. However, when money to spend runs thin, the government can step in with Medicaid in order to ease the burden on everyone involved. Yet, Medicaid has specific eligibility requirements to meet, as well as an expansive five-year lookback period. This means that to qualify for Medicaid, in most instances, some advanced planning must be done to make sure your assets, including your home, are in order. 

Medicaid Estate Recovery Plan

Medicaid can help cover the cost of a nursing home. Many of us will run out of the money needed to pay for these facilities out-of-pocket. However, when the person in care dies, Medicaid will go after any assets, including their home, that they have in order to pay back what was paid out for the person. This process is called the Medicaid Estate Recovery plan. This can lead to dire situations for families who just lost a loved one and are dealing with Medicaid attempting to take the house in order to pay off bills. Most people would prefer their home go to a loved one and not the government. 

Estate Plan in Advance

Planning in advance of any potential issues gives you more options in terms of how to set up your estate plan. This may help to avoid things like the Medicaid Estate Recovery program taking your home. Transferring your home to an irrevocable trust can protect it from Medicaid. This is more flexible than other means of protecting assets,  but it is more complicated and it is best to consult an attorney. Once a property is placed into an irrevocable trust, it can’t be taken out. The property can be sold, but profits made from the must be kept in the trust. This allows the seller to protect more of the house’s value if it ends up being sold. 

Some people choose to “deed” their home to their children. This may trigger the five-year penalty lookback period, and leave you unable to pay for care. Using a trust may be a better way to do it in terms of risk avoidance. 

Hire an Asset Protection Lawyer

Protecting your home when you enter a nursing home is essential. As mentioned, an experienced asset protection attorney, like those at The Mattar Firm, can help do just that. Call today to schedule your in person or virtual meeting. 844-444-4444.

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