If wishes were horses, then rides would be free. In a perfect world all families would remain connected relationally and geographically throughout all stages of life. When we grew old and needed long-term care, then our family would care for us either in our own home or in their homes. And, if our family members were no longer able to care for us, then we would have ample personal resources to pay for professional care in an institutional setting. At life’s end, there would be assets left over for our loved ones to inherit.
But this is not a perfect world.
On the other hand, reality is summed up well in what has been called the 70-70-70 Problem:
• 70 percent of the people over age 65 will need some form of long-term care during their remaining lives;
• 70 percent of the public does not believe they will ever need such care; and
• 70 percent of the public mistakenly thinks that if they did need such care, it is already covered by their Medicare insurance.
What About Medicaid Planning?
Most Americans qualify for Medicaid by default. They thought they were among the 30 percent who would dodge the bullet, but they go into long-term care and spend down their own resources to the eligibility limits. There was no planning to protect any of their assets. In fact, even assets that were “non-countable” in determining initial Medicaid eligibility may later be subject to Medicaid Estate Recovery at death.
What many people don’t realize, however, is that Medicaid planning can help preserve family assets, especially when one spouse needs long-term care and the other spouse needs financial security. Every case has its own unique issues and legal strategies to meet those unique issues. This definitely is not a “do-it-yourself” project, the Medicaid rules are very strict and such planning should only be done with an experienced elder law attorney. Mistakes could trigger severe penalties in the form of lengthy periods of ineligibility.
One approach is to acquire sufficient long-term care insurance to cover the period between the initial transfers and the Medicaid application filing. This preserves more personal resources on the front end until filing and on the back end should a period of ineligibility be assessed. Again, Medicaid planning is not a do-it-yourself project. Consult an experienced elder law attorney with a thorough knowledge of Medicaid.
State Filial Responsibility Laws
Can adult children be held financially responsible for the care of their indigent parents? The laws of 29 states and the Commonwealth of Puerto Rico say yes. In fact, at one time about 45 states had filial responsibility laws on the books until Medicaid assumed greater responsibility for the long-term care of indigent parents. While not all states with these laws on the books are actively enforcing them, that does not mean you should ignore them.
With state and federal Medicaid funds stretched and no end in sight with our aging population, circumstances could turn on a dime. If your parents are able to qualify physically but unable to pay financially for long-term care insurance, then this might be the perfect time to consider paying their premiums yourself or along with other family members.
© 2015 Integrity Marketing Solutions. All Rights Reserved.