By Faith Investment Services
Bluffton, 419-358-4207
“What will happen to my assets if I end up in a nursing home? What can I do to protect myself and my assets? What is long-term care insurance and how does it work? Will Medicaid get everything I’ve worked my entire life for?”
These are great questions, and the answers are different for everyone. There is no cookie-cutter approach to long-term care, whether self-funded or relying on Medicaid when your assets are depleted.
Possible options include:
- Having enough assets so that the income from those assets would pay for long-term care outright, month by month – with no depletion of resources. In this scenario you would probably need @ $1M or more of assets to produce sufficient income to self-pay in an ongoing manner, without depleting your pool of money.
- Having enough assets so that you can draw from them without running out of money, before you die. This does diminish the pool of money, but responsibly uses your money to fund your care.
- Funding a long-term care policy that will produce income to pay for skilled nursing or nursing home care. This provides a step-up in your normal retirement income to help pay for the increased costs of skilled care.
- Spending down what you have as long as it lasts and then turning to Medicaid for the remainder of your care. This reduces your care options and you must deplete your resources first, before Medicaid will pay for your care.
- Some of the moral questions regarding this question include:
- Who is responsible for your care – you, your children, other taxpayers?
- Is it ethical to hide or give away resources so that Medicaid does not require you to use them for your care?
- Is it more important to leave your hard-earned money to your heirs or to use it for your care?
- Are there other alternatives for your care than assisted living, skilled nursing care, and/or nursing home stays?
It can be very counter-cultural to challenge the prevailing thought of the day that ‘my hard-earned money’ should be protected from Medicaid. Of course we want to keep what we’ve earned, leave it to our children, AND get cared for. But who is paying for our care if we are not?
Rather than aggressively protecting our assets through legal maneuvering, giving away assets (for real or in name only), setting up irrevocable trusts or LLCs, or utilizing other strategies – maybe we should simply do the best we can from the earliest point we can to provide for ourselves. Maybe our hard-earned money should be used to create income that will pay all or part of our care. Maybe we should learn about long-term care policies and consider if we can/should afford to get one. Maybe we should sit down and talk with our children about the future – about our assets, our care, our desires, and more. Maybe it is time to have a conversation with a trusted adviser (who is not selling you Medicaid-avoidance documents) and find out what options you have.
