As estate planning attorneys, we often receive inquiries from clients regarding how to protect their homes from potential nursing home and long-term care expenses. Long-term care can be extremely expensive, and the cost can easily exceed the average person’s life savings. Fortunately, there are several strategies that can be employed to protect your home and other assets from the nursing home and long-term care expenses.
One of the most effective ways to protect your home is by transferring ownership to an irrevocable trust. When you transfer ownership to an irrevocable trust, you are essentially giving up control of the property, but you are also protecting it from long-term care expenses. Once the transfer has been made, the property is no longer considered to be part of your assets for purposes of Medicaid eligibility. However, it’s important to note that the transfer must be made at least five years before you require long-term care.
Another option is to obtain long-term care insurance. Long-term care insurance can help cover the cost of nursing home care, and it can also help protect your assets. However, it’s important to note that the cost of long-term care insurance can be expensive, and the coverage may be limited.
Another strategy is to transfer ownership of the home to a family member, such as a child. However, this strategy can be risky, as the transfer may be subject to gift taxes and may also disqualify you from Medicaid eligibility for up to five years. Additionally, if the family member experiences financial difficulties or legal issues, the home may be at risk.
It’s also important to have a comprehensive estate plan in place, including a will and power of attorney documents. A will is a legal document that specifies how your assets should be distributed upon your death. It also allows you to name a guardian for any minor children and an executor to handle your estate. Power of attorney documents give someone else the legal authority to make decisions on your behalf if you become incapacitated.
In addition, it’s important to explore other legal strategies, such as creating a family limited partnership or limited liability company. These legal structures can help protect your assets from long-term care expenses and other potential liabilities. However, it’s important to consult with an experienced estate planning attorney before implementing any of these strategies, as they can be complex and require careful planning.
In conclusion, there are several strategies that can be employed to protect your home and other assets from potential long-term care expenses. These include transferring ownership to an irrevocable trust, obtaining long-term care insurance, transferring ownership to a family member, and creating legal structures such as a family limited partnership or limited liability company. It’s important to have a comprehensive estate plan in place, including a will and power of attorney documents, and to consult with an experienced estate planning attorney to explore all of your options.
If you have questions about estate planning or probate, it’s important to consult with an experienced estate planning attorney. Our team is here to help you navigate the complex legal landscape and create a plan that meets your unique needs and goals. Contact our law office today to schedule a consultation and learn more about how we can help you with your estate planning needs.