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How do I protect assets from nursing home expenses?

| Apr 23, 2021 | Estate Planning

When your health starts to decline as you get older, you may need support to stay safe and well. Moving in to a nursing home can allow those with cognitive issues or limited mobility to enjoy their golden years without the risks that come from living alone. Unfortunately, nursing home care is often prohibitively expensive. It can cost thousands of dollars a month, even if you stay in a shared room.

Even if you have a decent retirement account and receive Social Security retirement benefits, you may not have nearly enough property to cover all of those costs. How do you prevent a nursing home from making a claim against your assets for the cost of your care?

Take steps to protect what is vulnerable

Medical care providers, including nursing homes and hospitals, can bring lawsuits against both individuals and their estates to try to recover unpaid debt. You or your family members could face a lien against your home or the liquidation and seizure of your assets to repay nursing home costs.

Reducing what property you hold in your own name will reduce what is vulnerable to claims by creditors. Moving property in to a trust or making strategic gifts to family members over the course of several years can diminish your personal assets to a point where there is nothing for creditors to claim.

This same process can help you if you want to apply for Medicaid benefits, which might pay for your nursing home stay. Like medical facilities, Medicaid may try to recover from your estate. They could force your family to repay the full amount of any benefits that you receive.

Diminishing your personal holdings and moving major assets in to a trust can protect them from claims by both medical creditors and Medicaid while you are alive and even after you die. Starting asset-protection planning or Medicaid planning well before you need to stay in a nursing home is usually a good idea.