Estate Plan Check-Up 11: Long-Term Care

Long-term care is an important consideration, because an estate plan only works if you have money left to pass to your loved ones when you’re gone. Long-term care is one of the most common ways that money ends up getting spent later in life or in the event of something that debilitates us.

Long-term care costs are the costs of assistance with activities of daily living such as bathing, dressing, moving about, eating, taking medication. In New Jersey, the average cost of nursing home care is about $11,000 per month. And regardless of how much money one has, paying $11,000 a month for a significant period of time is a lot money.

There are multiple ways in which we look at ensuring ultimately that you have money to pass to your loved ones, while at the same time having your long-term care costs covered. Medicare Medicare will provide a very limited amount of rehab but does not cover long-term care costs. For example, if you were to need a nursing home to get rehab after breaking your hip, you might need to be there awhile. Say you need 100 days. Medicare will only cover the first 20 days at 100%. Every day after that, from day 21 to 100, it will cost you.

Long-Term Care Insurance
To help subsidize some of the costs of that long-term care, we recommend that our clients consider buying long-term care insurance. Consult your insurance agent for details and costs.

Medicaid
When long-term care insurance has not been purchased, we look at whether or not there are other benefits that may be available – benefits either through the Veterans Administration or the Medicaid program. In order to avail yourself of Medicaid benefits, however, the government essentially expects that you have spent all of your own money. And you can’t give away your money to family members or friends and, then, immediately apply for Medicaid. Any money that you have given away in the five years preceding the time when you apply for Medicaid benefits counts as your money. If you’ve given it away in those five years, you won’t qualify for Medicaid.

With some planning – asset protection planning – however, it is possible to preserve some of your assets while not bumping up against the five-year rule. It can be complicated, though, and requires the care and attention of a Certified Elder Law attorney.

This post is for general informational purposes only. The information provided may or may not apply to you given the specifics of your situation. For a video presentation of this information, please visit Estate Plan Check-up. For more detailed information, please visit porzioplanning.com or contact us for a free 20 minute telephone consultation.

​By Deirdre R. Wheatley-Liss, LL.M, CELA and Crystal West Edwards, Esq., CELA