Many people are concerned about out-living their money, and with the average cost of nursing home estimated at $6,000 per month, that concern is very real. While nursing home cost can be covered by insurance, the cost of the insurance is quite often prohibitive. The prospect of nursing home care needs to be addressed early in the estate planning process and there are several ways that can be done.
The most common solution involves transferring assets into different ownership, either into a trust created for that purpose, or to other individuals. Early planning is necessary to satisfy state laws requiring that the asset transfer take place five years before nursing home admission . While this level of estate planning can be fairly complex, it can make sense when you consider that five years of nursing home care can run in the neighborhood of $360,000.
There is also the opportunity to preserve assets even if no planning has been done prior to a person’s entry into the nursing home. Rather than allowing the complete depletion of all of a person’s assets, if a transfer is made when a person goes into long term care, the person is eligible for medical assistance after five years. So, during that time, the person’s nursing home expenses must be paid from another source.
Whatever your situation might be, the estate planning attorneys at Kallemeyn & Kallemeyn can present you with a variety of options for nursing home planning and help you choose the one that will serve you best.