Planning to protect our assets is commonly referred to as “Asset Protection Planning,” “Medicaid Planning,” and/or “Elder Law.” These terms all relate to pre-planning to anticipate the reality that as we age, our budgetary needs increase because we must pay for our health care costs. In our grandparents' generation, the largest lifetime expense that they faced was their home mortgage. Once their mortgage was paid off, life got easy and in their golden years, our grandparents had enough wealth to live out their lifetimes. In our society today, this is no longer true. The reality is that the largest expense we face as we age is exorbitant costs of medical care as we age, and suffer non-life threatening illnesses such as mobility issues, dementia and Alzheimer’s Disease. This is a direct result of the fact that Americans are living longer.
Many people are under the misconception that Medicare will pay for our long term care costs in a nursing home and will also fully cover the costs of our rehabilitation after a hospital stay. After all, we have paid into the Medicare system with every paycheck we ever earned! Unfortunately, Medicare does not pay for custodial care in a nursing home, and in most cases, after 20 days of full coverage by Medicare for rehabilitation after a hospital stay, Medicare will deny further coverage and the ill person must then private pay for the remaining days of rehabilitation at a cost of $400 per day or more. If you cannot go home and must remain in custodial care, the cost is $450 per day or more for the rest of your life. This is because the average daily cost of nursing home care in Monroe County is approaching $500 per day. The annual cost of nursing home care is quickly approaching $200,000 per year. This is a significant drain on the wealth that you have saved over the years. Unless you have long term care insurance to cover these costs, or your assets are at the poverty level to qualify for Medicaid coverage, those costs must be paid from our assets. This diminishes our net worth available to pass down to our family members, or that is available to our spouses. If this scenario goes against your wishes, then it is vital that you meet with us to discuss ways to protect your assets from your long term care costs as you age.
We can also help you plan for beneficiaries with disabilities or special needs by establishing a supplemental needs trust or spendthrift trust, which protects disabled beneficiaries from loss of benefits and creditor claims. We work with your existing team of advisors, including financial planners, accountants, and insurance agents, to develop the best plan for your needs.