By Amy Delaney, Attorney at Law
No one wants to spend time in a nursing home, but sometimes it is unavoidable. If one has a prolonged physical illness, disability or severe cognitive impairment (such as Alzheimer’s disease) that prohibits independent living, a nursing home may be necessary. However, the costs of nursing home care are crushing. In the Chicagoland area, nursing homes are increasingly approaching $10,000 per month.
An elder law attorney can help ease the financial burden on the individual and help them salvage their assets and dignity. There are many techniques that elder law attorneys utilize to help individuals and their families reduce or eliminate the financial cost of care. Here are five options:
Option 1: Buying a New Home
Although some states permit a married couple to retain assets of $115,000 or more, a married couple in Illinois is allowed to retain only the sum of $109,560 in the name of the community spouse. Additional assets may be retained in certain circumstances as well.
However, if a couple has $209,560 in cash assets, and a home worth $200,000, they could chose to sell their current home and purchase a more expensive home. Thus, if this couple purchased a home worth $300,000 and retained cash assets of $109,560, the spouse needing care in a nursing home could receive this care without a loss of any assets.
Option 2: Spending Down
During the first three months that one is in a nursing home, Medicare insurance can help to supplement these costs. When there is a three night hospital stay prior to a nursing home admission, Medicare and an insurance supplement may cover up to 100 days of skilled nursing care. During this time, you can spenddown your assets on exempt expenditures, pay for home improvements, buy a new replacement car or van, or set up a prepaid funeral plan.
Option 3: Transferring Assets
With a court order, or sometimes without, many assets may be transferred legally to other family members. For example, in some circumstances, a house may be transferred to a spouse, a sibling, or a child. Additional assets may be transferred directly to a spouse or a child with a disability through a direct transfer or a trust.
Option 4: Utilize an OBRA Trust
In 1993, the Omnibus Reconciliation Act set forth certain trusts that may be utilized to protect assets who may need to qualify for Medicaid benefits. Over the years, the regulations and laws pertaining to these trusts have dramatically changed. However, these trusts are still an excellent option to protect assets of someone who needs long-term care Medicaid benefits.
Option 5: Obtain Veterans’ Benefits
Veterans’ Benefits include pension benefits to help offset the costs of long term care, but there are also comprehensive benefits for veterans with service connected disabilities that pay for 100% of the costs of care in a skilled nursing facility. The VA has contracts with a limited number for nursing facilities and an elder law attorney can assist you in locating the appropriate facility for you or your loved one.
It is important to know that one does not have to lose everything and live in a cardboard box to obtain necessary long-term care benefits. However, these options must be carefully considered and precisely implemented so as to ensure approval for governmental benefits. Be certain to work with an experienced elder law attorney before undertaking any such planning. You may reach our office by simply filling out the form below should you wish to meet with an experienced elder law attorney to put together a unique and individualized plan to protect your nest egg.
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