Does your estate plan protect your home from nursing home costs?

Sep 23, 2018 | Estate Planning

One of the most widely-held fears about nursing homes is that they will take your home if you need care. The good news is that your home can almost always be protected while you or your spouse is still alive. The bad news is that you may not be able to leave the home to your children or other heirs. And even if the home is protected while you are alive, the high cost of long-term care can still deplete your retirement or other savings. Long term care insurance is one way to protect yourself, but it is expensive, and some people have health conditions that prevent them from buying it.  

Most people don’t know that it is possible to use estate planning strategies to protect your home and other assets from the high cost of long-term care.  However, a basic will or revocable living trust won’t do this.

There are three steps to protecting your home and other assets from the cost of long-term care.  When you first start to plan, you can incorporate special tools into your power of attorney and wills or trusts that can be used later to protect assets.  Next, about five to ten years before care might be needed, you can add a second layer of planning that is designed to protect assets.  Finally, when care is needed, an elder law attorney can use the tools that were included in your planning to access benefits to help pay for care.

So how do you know when you are five to ten years away from needing care? Often, you don’t. There is no way to predict with certainty whether or at what age you or a spouse might need nursing home care. However, even if the need for care arises suddenly and sooner than expected, the tools that you included in the first stage of planning will likely enable you to protect some assets.  These tools aren’t included in basic wills or standard form powers of attorney, so be sure to ask about them.

This kind of planning is not right for everyone.  Millionaires can afford to pay for care.  People with little or no savings can easily qualify for help.  It is the families in the middle who can benefit the most from this type of planning.

If you are unsure whether your estate plan protects against the high cost of long-term care, register for one of our free workshops today.  If you like, bring your existing estate planning documents with you and we will tell you whether they include the tools that we are talking about here. To sign up for a workshop, call our office at 251-431-6014 or register here.

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