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Let’s start with the simple truth that we are all getting older. No debate about that and as such our needs for assistance with self-care and independent living grows with are age. Long term care needs vary, but many of us will require care and assistance with basic task we take for granted, including eating, bathing, dressing, using the toilet, getting in and out of bed and around the home. Additionally, meal preparation, medication management, finances, shopping for essential and other tasks become increasing difficult for many. As we all live longer, we all have a higher risk of needing assistance. Nursing home facilities costs throughout Massachusetts can be as high as $15,000 and more per month.
The Annual Costs of Care in Massachusetts:
Home Health Care Aide: $75,000+
Adult Day Health Care: $20,000+
Assisted Living Facility: $82,000+
Nursing Home Care: $172,000+ **
** The average stay in a nursing home is over 2 years. The cost associated with long term care is staggering.
Who pays the bill? You do, until you run out of money.
The Medicaid program in Massachusetts is known as MassHealth. Recipients of MassHealth. must meet certain financial eligibility requirements. First you must exhaust all but roughly $2,000 of your assets on your care before MassHealth kicks in. An extended stay could easily wipe out a lifetime of accumulated assets. Unfortunately, many are depleted of all assets that leaves them without the financial security they once enjoyed if they decide and can return home, that they would want to care for a spouse, or leave as an inheritance to their loved ones after they pass.
What can be done to avoid a devastating depletion of your assets and protect your family?
An Irrevocable trust can shield your home and other assets from the high cost of long term care and allow you to live in your home, maintain control over your home; provide protection for your spouse and loved ones, and preserve an inheritance for your children.
The law allows for the use of a properly structured irrevocable trust to shield your home and other assets without adverse effect on your MassHealth eligibility. But be weary of the disastrous consequences of an improperly drafted irrevocable trust. Poorly drafted irrevocable trusts will result in a total loss of control, unnecessary tax burdens, loss of access to the homes equity, and denial of MassHealth benefits.
It is critical to plan as early as possible. When it comes to MassHealth long term care planning, you are 5 years older than you think you are. MassHealth has a 5 year look back on transfers of assets whether out right gifts or transfer to trust. After 5 years all assets properly transferred outright or to trust are not considered countable assets when applying for Medicaid benefits. If you are 68 years old today, you are already 73 years old when it comes to proper long term care planning. As with most things in life, the earlier the better.
Grantor control over the trust. For most, just the word irrevocable causes apprehension when considering transferring assets and their home into trust. “I have to give away my home?” “My trustee/children will tell me what to do with my home?” “Can I be told to move out?” “What if I want to sell my home and move?” “What if I need access to the equity in my home?” “What if I change my mind on who will inherit my property?” “What are the tax consequences of an irrevocable trust?”
Yes, an irrevocable trust is just that, irrevocable, and a grantor must transfer ownership of the asset to the trust. However, attorney John A. Laine understands these concerns and understands that the law can alleviate them with a well drafted Trust.
With a well drafted irrevocable trust, the burdens of long term care do not have to be so heavy.
Want to learn more about an irrevocable trust and Medicaid? It starts with a conversation. Schedule a meeting with attorney John A. Laine today.
