Long-Term Care Planning

What is Long-Term Care?

Long-term care is the type of assistance people need to perform activities of daily living which include eating, bathing, continence, dressing, toileting and transferring. Long-term care needs typically arise as part of the normal aging process, but can also be due to an injury or illness, such as multiple sclerosis, stroke, rheumatoid arthritis, or due to a cognitive impairment, such as Alzheimer’s disease. Long-Term Care may be called for in many possible locations including a private residence, Assisted Living Facility, or Skilled Nursing Facility (nursing home).

Long-Term Care planning involves making decisions and moves to try to minimize the negative impact that may arise from the need for long-term care. It involves the analysis of assets that may be impacted by long-term care and protection of those assets. It involves looking for sources of funding for long-term care, like the use of reverse mortgages or home equity lines, or public benefits. It involves putting documents in place well in advance of the need for long-term care that can make things easier for those that might need to care for someone in need of long-term care. The following are some of the programs, tools, and issues that often arise in long-term care planning or needs.

Asset Protection

For many individuals, one goal of long-term care planning is to protect a lifetime of savings for children or other beneficiaries while qualifying for or planning for the possible need for Medicaid benefits. There are many different factors that must be considered when planning and we can assist in marshaling these factors. There are also options to consider and advantages and disadvantages to each. We can assist in navigating the maze of decisions that must be made if asset protection is a goal. You may have heard of some of these more common tools that might be used for asset protection:

Life Estates

A “Life Estate” is created by the owner or owners of the real estate deeding the
property to one or more persons via a Life Estate Deed, but retaining the right to live there the remainder of his, her or their lives. The deed can be to a person or to the trustee of a trust. The transfer is complete by recording the deed at the Registry of Deeds where the property is located. Once completed both the person(s) holding the life estate and the person(s) to whom the property was transferred have a legal interest in the property. Upon the death of the person persons holding the life estate interest, the person or persons to whom the property was transferred will own the entire interest in the property subject to any liens or encumbrances on the property. If the real estate owned by a person is deeded out using a Life Estate Deed five (5) years before that person applies for Medicaid the property will not be counted toward eligibility and will have protection from Medicaid claims after death.

Irrevocable Income Only (Medicaid) Trust

Medicaid Trusts, also referred to as Irrevocable Income Only Trusts, are irrevocable trusts set up for asset protection. These trusts can hold any assets, including real estate. Medicaid does not count the assets in this type of trust as long as the trust is set up correctly, and the property was transferred into the trust more than five years before the application was filed. These trusts are very complicated and need to be approached, created and funded very carefully.

Long Term Care Insurance

Long-Term Care Insurance can cover all types of care in a variety of settings, including your home, community, an assisted living or skilled nursing facility.  Insurance companies offer a wide range of options that enable you to customize a policy based on your needs, as to ensure your coverage will cover if needed. We can assist in reviewing your needs, advising on whether insurance may be a good option for you, and reviewing with you the policy options you may have when buying a policy.

Reverse Mortgage

A reverse mortgage is a loan taken out against the equity in your primary residence often used to obtain funds necessary to pay for long-term care. If income or other assets are not available to pay for long-term care the reverse mortgage can provide a source for these funds and eliminate payments to existing mortgages to free up income to be used for care. We can assist in determining if a reverse mortgage would be good for you, help you getting a reverse mortgage set up, and dealing with issues that might arise during the course of a reverse mortgage.

Disability Planning

If a person is disabled they may be entitled to many possible public benefits. But receipt of a gift or inheritance from a parent or relative could result in loss of these benefits and unnecessary expenditure of funds that could be better used by the disabled person for their supplemental needs. We can assist both parents and relatives and friends of a disabled person in setting up trusts and plans that prevent loss of benefits to the disabled person. We can also assist the disabled person in dealing with trusts that may have already been created for their benefit.

Admission Agreements and Contracts

Many long-term care providers require a contract or admission agreement to be signed before any services are provided. These are often complicated legal documents that need to reviewed and explained. We review and advise clients on these contracts and provide guidance and advocacy if necessary on the terms and provisions in these types of agreements.

For more information on long-term care planning please contact us.