Can a Nursing Home Take Your Assets?

The average cost of nursing home care in North Carolina is roughly $120,000 annually, and that figure can quickly deplete the nest egg you’ve worked so hard to build.

You may be worried that a nursing home costs will drain your assets; but the good news is that Medicaid benefits can cover the cost of long-term skilled nursing care before the costs of the facility begins draining your hard earned assets.

This article provides a brief overview of how to achieve Medicaid eligibility to protect your assets and allow Medicaid (instead of you) to pay for skilled nursing home care.

Options for Paying for Nursing Home Care

Generally speaking, there are three ways to pay for long-term care in a skilled nursing facility:

  • Pay out-of-pocket
  • Long-term care insurance
  • Medicaid

There is no single, one-size-fits-all solution, but most clients prefer not to pay for skilled nursing out-of-pocket. Instead, they prefer to have Medicaid pay for that nursing home care. The challenge is that Medicaid only allows you to keep limited assets in order to qualify, such as your house, car, burial and funeral contracts, and personal property. Additional assets, such as multiple properties and investment accounts, can be a bar to Medicaid eligibility.

How to Preserve Assets and Qualify for Medicaid

Depending on your situation, the attorneys at Brady Cobin Law Group, PLLC, may recommend one or more of the following strategies:

  1. Plan ahead to reduce the number of available resources. Medicaid has a five-year look-back period, so if you give things away in a haphazard rush, you could be penalized.
  2. Create a Medicaid Asset Protection Trust to hold assets like your properties and investments. These trust assets do not count against you should you need to apply for Medicaid in the future.
    This Trust must be established at least five years before you plan to apply for Medicaid, but it can spell the difference between funding your own nursing home care out of your personal resources (and your children’s inheritance) and having a government-sponsored program foot the bill.
  3. Spend down resources on things you can keep, such as buying a new car or purchasing a burial and funeral contract.

If you haven’t had a chance to do long-term care planning and you’re facing an urgent crisis, meaning that you or someone you love is immediately entering a nursing home, then an attorney with experience in elder law can work with you to protect your assets as much as legally possible.

When spending down isn’t an option, a Medicaid compliant annuity can also protect your assets. The Medicaid annuity turns assets into income and can help re-build your wealth once you are found eligible for Medicaid.

Contact an Experienced Raleigh and Wake Forest Estate Planning and Elder Law Attorney

This article explored how to pay for nursing home care while avoiding depleting your assets as you enjoy your golden years from the 30,000-foot level.

To explore customized planning options, we encourage you to contact Brady Cobin Law Group, PLLC, at (919) 782-3500 or online to schedule a consultation.

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Our North Carolina estate planning and elder law attorneys are committed to honoring the life, work and charity of every individual. Call us at (919) 782-3500 or complete the form below.

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