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Most of us would like to live and age in our current homes. More than 3 in 4 people — 77 percent — agree with the statement, “I’d really like to remain in my community for as long as possible,” according to AARP’s “Home and Community Preferences Survey”. Unfortunately, as we age declining health and finances make it harder for aging in place to become a reality. Decreasing mobility and medical issues create doubts in the elder homeowner in their ability to live safely and independently at home. Incomes may decline or become fixed and the fear of running out of money to maintain the home becomes an increasing concern.
Many elders believe they are forced to sell their home and either move in with a family member, purchase a more affordable “downsized” home, or move to assisted living. These options may be right for some, but the majority do not want to sell their home, do not want to burden family members, nor do they want to move to assisted living. So how do we age in place? It is important to know the tools and resource that are available to allow us to stay in our homes. It is important to plan.
First, consider as we age, barring an unforeseen medical crisis, that we slowly decline over time. Normal day to day tasks get harder and harder. Heavy lifting gets heavier, driving may no longer be a safe option, bathing and preparing meals pose greater risks of falls and injury. In time we may need a little help with everyday activities. At first it could be a little help with house cleaning and laundry, then help with running errands and grocery shopping, and so on. That is not to say we cannot enjoy a safe and independent lifestyle at home, but it gets harder to do so as we age. Yes, children, friends and neighbors will be there to help when they can, but children work and have children of their own and just do not have the time to do it all.
If you want to age at home, a plan must be put in place. Modifications to the home must be made to make living easier. Your finances and the costs associated with aging in place must be assessed. The use of an irrevocable Medicaid shelter trust to shield your home from creditors and the high cost of long term care must be considered. The possibility of accessing the equity in your home to pay for the cost of in-home care and home improvements must be explored. Qualifying for Medicaid benefits, VA benefits, local elder care services must be done. Understanding your finances, use of an irrevocable trusts, home improvements, and private and government elder assistance programs is the key to controlling your future and leaving the option of aging in place available.
Consider the following actions needed to be undertaken to Age in Place. Know how each tool and resource may help you and how they may complement each other. With an understanding of the tools and resources you will be able to put a plan in action that uses each tool in conjunction with each other to allow for aging in place.
The law allows for the use of a properly structured Irrevocable Medicaid Shelter Trust to shield your home and other assets without adverse effect on your MassHealth eligibility. MassHealth is a needs based program that provides in-home elder care services, but bars benefits for those with too many assets. An irrevocable trust can remove your home from inclusion as a countable asset when applying for MassHealth benefits. A properly drafted trust allows you to live in your home, maintain control of your future, provide protection for your spouse, preserve an inheritance for your children, and is critical for qualifying for MassHealth in-home benefits.
You must hire an attorney who understands how to maximize the use of an Irrevocable Medicaid Shelter Trust in context to long term care planning and aging in place.
It is important to note that when it comes to Irrevocable Medicaid Shelter Trusts and long term care planning, you are 5 years older than you think you are. MassHealth imposes a 5 year look back period on transfers of assets to an Irrevocable Medicaid Shelter Trust before those assets are considered non-countable on a MassHealth application. It is vital to start the 5 year clock as soon as possible.
A well drafted irrevocable trust should the cornerstone of long term care and aging in place planning.
Poor mobility and health issues make it hard for some older adults to stay in their own homes. Going up and down stairs, general up keeping, cooking, getting safely in and out of the tub/shower become more difficult as we age. There are many safety concerns, and eventually, for some, the issues related to aging may become too great and force them to leave their homes. For others, improvements to their homes can be made to allow prolonged and safe aging in place.
The addition of ramps, railings, lifts, and other home modifications can provide safer and greater mobility in your current home. Even small changes such as removing a rug or adding non-slip material to your kitchen, bathroom and shower floors can make a significant difference. Additionally, flat doorways, lever door handles, relocating light switches, electrical outlets, thermostats, and adding lighting can all make life easier and safer to stay at home. First floor living and the avoidance of stairs is also a great way to ensure safe and continued living at home.
Look around every part of your home, inside and out, and Make a home accessibility checklist. Consider how you would live in your home if you were to lose mobility or become disabled. Ask questions. Is there a full bath and bedroom on the first floor? Can installation of ramps and railings ease the risk of falls? Are the doorways wide enough for a wheelchair? Can a walk-in tub be installed in the bathroom? Are the kitchen cabinets and appliances accessible? Can I afford to make these changes and improvements to my home?
Private companies can provide care and support meeting day-to-day needs and minimize the risk of accidents. Care may include grocery shopping and meal preparation, bathing and dressing assistance, toileting assistance, medication reminders, errand running, local transportation, housekeeping, doctor visits and walking assistance.
Private in-home care is often more "affordable" than moving into an assisted living facility or nursing home, avoids or delays moving out of one’s home and allows for continued aging in place. However, private in-home care is still expensive and for those with fixed income and limited assets it may be cost prohibitive. Make a few calls and gather information on the cost of privately paid home care providers.
Many towns throughout Massachusetts provide elder services to support the ongoing development of older adults (people over 60 years old) and enhance the quality of their lives. Often there are senior centers available in the community that provide programs to meet the needs of its older adult population. Many centers offer fitness classes, educational programs, art, music writing classes, social and volunteer opportunities, local transportation to medical appointments and for essential errands, as well as adult day care programs for older adults.
Old Colony Elder Services(OCES). Since 1974, OCES has been providing a variety of services to those individuals most in need. Through their programs they offer significant life-supporting care contributing to an individual’s ability to live within the community as independently as possible for as long as possible while preserving dignity and quality of life. OCES is the largest provider of these in-home and community-based services for older adults and people living with disabilities in the southeastern part of Massachusetts.
The South Shore Elder Services provides Meals on Wheels delivery to seniors in need five days per week. More than just a meal delivery service, the South Shore Elder Services prides itself as a friendly face checking in on older adults.
The Massachusetts Medicaid program, referred to as MassHealth, is a government program that funds programs for elderly who need care. MassHealth programs for the elderly provide a wide range of medical, social, recreational, and wellness services for individuals living at home. The Program of All-inclusive Care for the Elderly (PACE), the Home and Community Based Services Waivers, the Managed Care Organization, and Primary Care Clinician Plan are for people who would otherwise need facility based care. These programs have been designed to allow individuals to live more independently at home with services and supports, such as homemaker services, nonmedical transportation services, and home delivered meals. Click here for MassHealth’s Senior Guide to Health Care Coverage.
MassHealth is a cooperative Federal and State program that provides benefits based on financial need. Recipients of MassHealth must meet certain financial eligibility requirements.
As of 2022, the total value of countable assets owned or available to an individual applying for MassHealth may not exceed $2,000 and the community spouse may not exceed assets of $137,400. Countable assets include all assets to which the applicant or his or her spouse would be entitled. If you and your spouse have more than $139,400 in assets, you will be forced to spend down those assets that exceed $139,400 before qualifying for MassHealth benefits.
All real estate owned by the applicant, with the exception of the principal residence, is considered a countable asset. However, MassHealth may secure a lien against a living MassHealth recipient’s principal residence. This lien gives MassHealth authority to recover payments for a recipient’s medical expenses if the property is sold while the recipient is living and allows MassHealth to recover through a recipient’s probate estate when the recipient dies.
Again, if an applicant's countable assets exceed $2,000, the applicant must spend down his or her assets to below $2,000. Many believe they can simply gift their assets away to meet the $2,000 threshold, although that is true, keep in mind that MassHealth has imposed a 5 year look back period on transfers of assets whether outright gifts or transfers to trust. Any gifts or transfers of assets within the 5 years look back period could disqualify an applicant for benefits. After 5 years all assets properly transferred outright or to trust are not considered countable assets when applying for MassHealth benefits and are protected from being spent down. When it comes to proper creation of an Irrevocable Medicaid Shelter Trust, it is important to understand that with the 5 years look back period you are 5 years older than you are today. As such, there is an urgency to planning now and starting the clock as soon as possible.
Many seniors also have long-term care insurance, which helps to pay for nursing home care, in-home health care, and other types of extended care. This type of insurance is important for those who want to be sure that they will have the money they need to pay for quality care if they need it in the future.
There are different types of long-term care insurance policies available, and it is important to shop around and compare rates before you decide on a policy. Some policies offer lifetime coverage, while others only cover a certain number of years, still others offer daily dollar amounts. It is also important to read the fine print and understand what is and is not covered by the policy.
One thing to keep in mind when considering long-term care insurance is that the premiums can be expensive. However, the cost of not having coverage can be even higher if you need to go into a nursing home or receive other types of long-term care.
Many seniors may be unable to qualify for long-term care insurance coverage. Higher risk individuals with certain medical histories may be uninsurable. Age is the biggest factor in determining insurability. A 70 year old has a far greater chance of denial of long-term care coverage than would a 60 year old. Even if you do qualify for long-term care insurance at an older age your premiums are likely to be considerably higher than if you applied years earlier. Like most things, especially insurance coverage, the younger you are the better.
Honestly, I was not a huge fan, until I took the time to understand reverse mortgages. I now believe a reverse mortgage can be a financial tool that allows seniors to enjoy their retirement and age at home.
A reverse mortgage is a loan against the equity of your home. The home must be your primary residence and you must be over the age of 62. Additional requirements must be met, such as having equity in your home and income limits. A lump sum or a line of credit is available to the homeowner, with the line of credit being the most popular. What makes a reverse mortgage different from a traditional mortgage is that the no payments need to be made until the property is sold, your move out or pass away.
The Pros include:
The Cons include:
Reverse mortgages are not for everyone and even if they are for you, they should not be taken lightly. Reverse mortgages are loans secured by your home and, like any type of mortgage, must be considered with the utmost care.
Things to consider when researching reverse mortgages:
It goes with out saying that keeping fit is the most important thing you can do to stay healthy. Staying healthy is what truly allows you to age at home. Exercise benefits both body and mind. None of us need to read the countless medical journals and clinical studies to know that physical fitness provides benefits to all ages, especially the elderly.
Many diseases, the loss of mobility, and complication of obesity can be slowed or even outright avoided if you stay physically fit. Not only will fitness allow you to age at home, but it allows you to be more engaged and joyful as you age at home.
Put a routine in place. No need to run marathons or even joining a gym, just keep moving daily. Be mindful of the food you are eating. There is no secret to staying fit and eating healthy. It can be as simple as going for a walk around the block and not stopping by the fast food restaurant as you do.
Do any of us really need a dietician to tell you that the bag of chips and chocolate cake are not the best thing for your health or that if you were more physically fit you will have a better chance of aging at home for a longer period?
Scenario: You refinance and pay off an existing $200,000 mortgage balance with a reverse mortgage equity line refinance. You now have a $200,000+ balance on the reverse mortgage (Fees, origination costs, and interest may be included in your reverse mortgage balance). You transfer your home into an Irrevocable Medicaid Shelter Trust. 5 years has passed, and the home is now protected as a non-countable asset. You apply for MassHealth in home benefits or nursing home benefits. You have $182,000 in countable assets outside of the Irrevocable Medicaid Shelter Trust. You are $180,000 over the $2,000 MassHealth asset limit of MassHealth applicants, and you must spend down $180,000 to qualify for MassHealth. MassHealth considers the transfers funds to pay off debts as permissible non-disqualifying transfer of assets. You transfer $180,000 to pay down the balance owed on the reverse mortgage. You are now down to $2,000 in assets outside the trust and you qualify for MassHealth benefits. Your reverse mortgage equity line now has an available balance of the added $180,000 and may be drawn on. Again, the proceeds of a reverse mortgage are not countable assets, further any additional draw from the reverse mortgage equity line would be property of the irrevocable trust, which has been in existence for over 5 years and considered non-countable.
Do not wait to plan for aging in place and do not do it alone. The time is now to create a plan to age in place. Do not wait for a crisis or a medical emergency to force your hand. Speak to your financial advisor, your doctor, investigate MassHealth membership, do your due diligence on reverse mortgages, find out the cost to install a first floor walk in tub and other improvements to make your home safe and accessible.
Be honest about your aging in place plan. Even with the home improvements, private home caregivers, MassHealth benefits and a reverse mortgage, is staying in your own home the safest and best option for you? The only way to find out is to put together an aging in place plan. Talk to your family. Talk to your doctor. Talk to your financial advisor. Talk to your attorney.
Book a Call with attorney John A. Laine and learn more.
