In this episode, Tim will explain how people can save assets even if they are about to enter, or even if they are already admitted to a nursing home.
WRVO Producer Mark Lavonier:
This podcast is part of the series Estate Planning Pro Tips, hosted by attorney Tim Crisafulli of Crisafulli Estate Planning and Elder Law PC an estate planning probate and elder law firm serving clients throughout central New York. A former school teacher, Tim explains complex legal subjects in an easy-to-understand way. The commentary focuses on the central aspects of estate planning, such as Wills, trusts, asset protection, long-term care, and probate. And now here's Tim.
Tim Crisafulli:
It's never too late. In a perfect world, early planning, more than five years in advance, would protect assets whenever a person enters a nursing home. We do not live in a perfect world. Rather, families often find themselves in a crisis situation, where a spouse or elderly parent must enter a nursing home right away. Or maybe is already in one. Even in those situations, there's almost always something that can be done to preserve assets, and those preserved assets can be used both to enhance the quality of life of the person in the nursing home, as well as passed on to beneficiaries after the resident's eventual passing. When a client needs nursing home care Crisafulli Estate Planning and Elder Law performs a triage of sorts to see how best to preserve assets. First, we consider whether a spend down makes sense. Specifically, we determine whether it is possible for the nursing home resident to purchase allowable items such as prepaying, burial expenses. Be warned, some spend-down expenditures are permissible and some are not. So it is important to have good counsel. Next, we consider whether any last-minute transfers may be made that would not negatively impact the resident's qualification for Medicaid benefits. For example, it is sometimes possible to transfer a house, even at the last minute, to an adult child who cared for the person who ultimately enters a nursing home. Last-minute transfers between spouses also make sense sometimes. After that, much rests on whether the nursing home resident is married and, if so, whether the spouse is healthy enough to live out in the community. If so, it may be possible to transfer assets to that community spouse. Then it may be prudent for that Community Spouse to use a planning tool called Spousal Refusal. The name sounds harsh, but the policy makes sense when a couple uses Spousal Refusal, the Community Spouse refuses to contribute to the cost of nursing home care for the resident spouse, and can keep more assets than would otherwise be possible. Although there is a risk that the county will pursue that refusing spouse for a contribution, the amount sought in such situations is lower than would be the case had the spousal refusal never been used. Lastly, if a person needs Medicaid to pay for a nursing home but is not married, another option is Promissory Note Planning. The details are complex, but the end result is that a nursing home resident can preserve significant assets that would otherwise be paid over to the facility. The preserved assets can either be used to enhance the resident's quality of life, or passed on to loved ones. I often meet with people who tell me that their elderly parent simply lost everything upon entering a nursing home. I cringe on the inside because I know that this simply was not necessary. Even if there is little time to plan, and even if a loved one is already in a nursing home, there's almost always something that can be done to preserve assets that would otherwise be lost.