Show #355 Airing Sunday, 9/3/06
It would be great if all of you could make use of our planning advice early to protect your home and savings from the high cost of nursing homes. But that's not always possible. Once your spouse or parent has been diagnosed with Alzheimer's or entered a nursing home, is it too late to plan? Here with the good and very timely news that it's never too late to take action is my law partner, Jennifer Peck.
Question: When Should people plan to protect their home and savings from the nursing home?
Answer: As early as possible. Right now, there are probably 50 different planning options and strategies. In your 50's, you'll have the whole range of those options available. In your 80's, you can still do planning, but your options will be fewer.
Question: Under the new Medicaid laws, the look back period now is five years. Does that mean you're out of luck if you don't plan at least five years before going to a nursing home?
Answer: No. But that's a common misunderstanding. It's true that if you make a gift or transfer of assets to other family members and wait five years, then those gifted assets are free and clear and not counted by Medicaid. But there are plenty of planning tools available for people even if you don't have five years, and even if your loved one is already in a nursing home.
For example, last week I had a client come in. His father had been in a nursing for a year and they've spent all but about $100,000 of his savings. We are able to protect more than half the remaining total by pre-purchasing a funeral, giving about $50,000 to his children, and buying a specialized Medicaid annuity with the remainder.
Question: Are there ever times when it is too late to plan?
Answer: Rarely. The most difficult situations come up when a person has become incompetent and unable to make rational decisions.
When that happens, we check to see if the person previously made a durable power of attorney with gift powers (authorizing a child to plan for the parent). If so, we can still use a number of planning tools to try to protect assets. If there's no durable power of attorney, we will be very limited in what we can do.
Question: Where can our viewers get more information?
Answer: For general Medicaid information, go to the ODJFS website at www.jfs.ohio.gov. But it's not too user friendly and doesn't tell you much about planning, but rather gives you the rules. The Golden Opportunities website probably is the best. www.golden.tv.
Question: Can people plan on their own?
Answer: I don't recommend it. The law should be simple enough to let people handle this on their own. Like Medicare. But unfortunately, the laws are very complicated and people cannot navigate the Medicaid maze without help. (Maybe you can change that when you get into office.)
Planning for long term care is critical if you wish to protect your home and savings from catastrophic nursing home costs. And while earlier is better, it's never too late. For more information, give Jennifer Peck a call.
