elder care - two hands holding a walking stick

Elder Care and Nursing Home Costs in Phoenix, AZ

In our last two blog posts, we introduced several key concepts involved with Long-Term Care. In today’s blog post we’ll finish the 3-part series by highlighting possible solutions for protecting your estate’s assets from the prohibitive costs of Long-Term Care. At Phelps LaClair in Phoenix, Mesa, and Chandler, AZ, we’ve been studying elder care and its impact on developing secure plans to protect your estate. We want our clients to prepare well now for what may come in later years.

One study done by U.S. Department of Health & Human Services states that, “. . . about half (52%) of Americans turning 65 today will develop a disability serious enough to require LTSS . . .” (Long-Term Services and Supports). Combine that reality with the fact that monthly costs for nursing home care around Phoenix, AZ are $6,494 per month for a semi-private room and $8,389 per month for your own room, and you’ve got good reasons to plan ahead!

Before we continue with a discussion about estate planning and elder care, it’s important to understand that it’s a criminal offense to hide money from the United States Government. Everything that is done to protect your estate must be done legally, and usually, well in advance of the time when you actually need the care. Second, if you’re wealthy, you may be able to pay for nursing home costs out of your estate. But not knowing how life will unfold can present serious questions about protecting your estate. Not only could the exorbitant costs of Long-Term Care drain your estate and leave the healthy spouse struggling financially, these costs could also drain any inheritance you’re planning to leave to future generations.

What can be Done to Protect Your Estate?

Unfortunately, most health insurance policies don’t cover Long-Term Care nursing home expenses, so the elderly often turn to Medicaid for help. But Medicaid rules are strict in who qualifies for coverage. For example, if you gave your inheritance money away to family members in order to avoid spending it on a nursing home—and that gifting was within five years prior to your nursing home stay—you’ll be denied Medicaid coverage.

Elder Care and Planning Ahead

In light of that fact, one way to protect the estate would be to begin gifting your inheritance to your children more than five years prior to needing long-term care. This plan could even have tax benefits for your children if they name you, their parent, as a dependant, and pay for half the medical costs of your nursing home care.

Another possibility is to purchase long-term health insurance that will pay certain portions of long-term care. But since the age and health of the person applying for insurance determine how much you’ll pay for the insurance, the earlier you sign up, the better. Waiting may even disqualify you, if insurers feel you’re too old at the time of your application for their insurance benefits.

Third, there are certain types of trusts that can prevent a medical lien from being placed on your home and guarantee that your spouse will be able to live there for the rest of their life. Certain trusts can also allow your inheritance to be passed down to your children. But again, all of this must be established ahead of time, and not within the five year period prior to needing nursing care, in order to be effective.

Being Medicaid Eligible Requires Careful Strategy

Since the estate of each person is unique to that person, it’s not feasible to be more specific concerning trusts and their ability to protect assets from being drained by Long-Term Care. And, the rules concerning Medicaid can be complicated. Not following them carefully could mean being ineligible for Medicaid benefits.

If you’re interested in knowing more about elder care and trusts and you’re in the Phoenix Valley, we encourage you to talk to us in person about your estate and your needs. Sitting down to strategize with a qualified elder care attorney just might make all the difference in setting up strong plans to finish well. It can give you peace of mind, regardless of what the future brings.

Images used under creative commons license – commercial use (4/9/2018) Government of Alberta (Flickr)


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