Americans are living longer, which means long-term health care impacts are an essential part of estate planning. Long-term health care can be expensive, especially when provided through a nursing home.
The Maryland Health Care Commission estimates those costs can vary widely from $17,000 to $79,000 per year depending upon the type of care needed and where it’s provided. But, there are steps you can take to mitigate those costs.
Methods of long-term health care planning
In order to preserve assets, early planning is essential with the help of a knowledgeable attorney who is well-versed in estate planning and elder law. They can discuss the two most common options:
- Long-term care insurance: Purchasing this product through a private insurer is the best way to preserve assets while paying for long-term care. However, it can be pricey, so shop for it while you are still healthy. It may not be an option for those with certain medical conditions.
- Medicaid planning: The goal here is to pay for long-term care while preserving assets for the client, their spouse and other dependents. However, unlike Medicare, Medicaid is a means-tested program, meaning applicants must have low incomes and limited assets.
More than 1.3 million Marylanders are enrolled in the program. Visit the Medicaid website to view the state’s eligibility requirements.
Strategies for Medicaid planning
Qualifying for Medicaid and providing an inheritance to family members can be challenging, but it’s not impossible. Penalties apply if asset protection isn’t done correctly. Your lawyer can discuss strategies helping you achieve both goals, including:
- Asset protection trusts
- Income trusts
- Medicaid-compliant annuities and promissory notes
- Caregiver agreements
- Spousal transfers
Protecting assets and providing care
Achieving both these goals is vitally important. While some of these strategies might not be a good fit, it can be worth your while to explore all options with an experienced estate planning and elder law attorney.