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Estate Plan Should Include Nursing Home Option

On Behalf of | Dec 27, 2017 | Estate Planning |

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No one likes to think about having to enter a nursing home. The idea can seem especially unfathomable when you are in good health, no matter your age. However, the odds that you will never have to go into a nursing home are not something you want to gamble with. Why?

For one thing – and most importantly for quite a few people – a lack of planning could lead to you selling your house and other assets rather than leaving them to your children or other heirs, as you would prefer. In fact, you could have nothing left to probate. It is important to understand that planning for a nursing home does not mean absolutely having to go live in one. It only means being ready for that eventuality financially and legally should the need arise, as it does for many people.

Leave your assets to the people you want them to go to

Medicaid has a five-year lookback period. It means if you wake up one morning and decide that you do need to enter a nursing home in a few months or even a year, you lack some freedom to distribute your assets to your loved ones. In a nutshell, you could face penalties for making transfers or gifts in the five years before going into nursing care. Suppose you made an asset transfer four years ago. Depending on the particulars of the situation, that could mean having to postpone your nursing home stay by one year, a huge time difference when you desperately need help.

However, if you had planned for the eventuality of having to enter a nursing home, your assets should have protections. Perhaps you set up a trust (more than five years ago) to shield your assets or went ahead and gave each of your children as much of their inheritance as possible. You could also have set up long-term care insurance. The younger and healthier you are, the easier it is to obtain.

Remember: Planning for possibly going into a nursing home does not mean you have to actually go into one. It is a smart move designed to protect you and your loved ones in case life takes you in that direction.