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Protect Your Assets from Long-Term Care Costs

notebook with long term care plan

At Shaker Place Rehabilitation and Nursing Center, we believe that education is the first step in choosing a long-term care facility for yourself or your loved one. We have partnered with NYSARC Trust Services to help educate and prepare future residents for the changing laws in New York State, to educate on the protection of assets and income for Medicaid planning purposes, and to prepare for future long-term care needs.

It’s not always possible to plan for when you’ll need long-term care. If your finances are not established correctly ahead of time, you might end up losing most of your assets in order to pay for the care you need.

Fortunately, there are ways to set up your finances in advance so that they won’t be depleted if you end up needing long-term care, whether it be at a rehabilitation facility or a nursing home. Here’s what you need to know.

Medicaid Eligibility

In order to understand the importance of protecting your assets, you’ll first need to understand Medicaid eligibility requirements. Medicaid eligibility is income-based, and there is a five-year “lookback” period, which means the government can look back through five years of your financial records to see if you’ve transferred or gifted any assets during that time.

If the transfer was not exempt, you may be ineligible for Medicaid, which means you’ll have to finance long-term care on your own. This can deplete any assets you were hoping to pass on as an inheritance and leave you and your family in a financially unstable position.

How to Protect Your Assets

One of the best ways to ensure your real estate assets are protected is through a trust. There are typically two common types of trusts: a living revokable trust and an irrevocable trust. However, neither is ideal for this situation. To protect your assets from potentially being drained to pay for long-term care, you’ll need something stronger than a revokable trust but not as rigid as an irrevocable trust.

The solution is a type of trust that’s somewhere in the middle. It’s sometimes known as an asset protection trust, but it can go by different names depending on the financial professionals discussing it.

If properly drafted, this type of trust allows you to remove and replace your trustee or beneficiaries at any time, for any reason. However, in order to sell the property, you’ll need the written signature of the trustee. This small fact allows you to honestly say that you can’t access your assets on your own, which makes it impossible for a long-term care facility to use them to pay for your care.

You’ll need to put this trust in place at least 5 years before you’ll think you need it in order to avoid the 5-year lookback for Medicaid eligibility. Because of that, it’s essential that you organize your finances as soon as possible. Don’t wait for a medical emergency to start thinking about your legacy.

The Shaker Place Experience

If you’re looking for long-term care or rehabilitation services, Shaker Place is here for you. We’re happy to make time to walk you through the application process and make sure you understand all of the forms involved. We can also discuss financing and explain what your options are regarding the funding of your care. To learn more about our facility explore our website or contact us today.