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How to Avoid Nursing Home Bankruptcy

Nursing home bankruptcy occurs when a person finds themselves in need of nursing home care but has to spend through their savings and sell their home in order to pay for it. It can also occur after the person passes away. In Ohio and the rest of the United States, Medicaid provides valuable help and services needed to care for people later in life. However, Medicaid will seek repayment from the recipient of their benefits and services once they pass away. In other words, if you are a Medicaid recipient, Medicaid will go after your valuable assets once you die. They do this to pay for the Medicaid services that you utilized while living or for any bills they paid on your behalf while using Medicaid. Elder Fighters has solutions to help you avoid nursing home bankruptcy and still get help paying for the care you may need.

Why Your Home May Be At Risk

In most cases, your home is your most valuable asset that Medicaid will go after for repayment. Medicaid calls this estate recovery. You may find this possibility concerning, especially since you have likely spent nearly your entire life paying for your home. In addition, you may intend to pass down your home to your heirs. You would not want the government to use your home to pay for the medical services you needed in your older years.

Protect your home from Medicaid through Ohio Medicaid planning and family eldercare money management. And you shouldn’t wait to get started — early Medicaid planning is needed to protect your family home from estate recovery. Here’s why you need Medicaid planning as soon as possible:

How to Prevent Medicaid from Taking Your Home

The first step for asset protection for many is to get an irrevocable asset protection trust well before using Medicaid services to prevent them from taking your home. Ohio has a five-year look-back period, meaning Medicaid can use the assets you owned up to five years before you started using Medicaid to pay for its services when you pass away.

For instance: you registered for Medicaid in 2021, and you only moved your assets to a trust in 2019. Since Medicaid will look back five years, it will still consider your assets in that fund eligible to pay off your used medical services. So, if your house is among the assets you moved into a fund in 2019, Medicaid can still take your home to pay for estate recovery because it still falls within the five-year look-back period.

Meanwhile, in case you intend to stay in an assisted living facility or nursing home temporarily, you can exempt your home as a countable asset. A countable asset is something you own that carries a specific monetary value. Your home has equity, and it is easily convertible to cash, making it a countable asset.

By signing a specific statement that you intend to return to your home after your temporary stay in a nursing home, you are exempting your home as a countable asset or resource. So, once you return home from the assisted living facility and Medicaid begins to charge you for their services, they cannot take your home as payment.

What Is an Irrevocable Asset Protection Trust?

An irrevocable asset protection trust is a plan that shields your assets from creditors. Since this type of trust is irrevocable, meaning no one can modify, amend, or terminate the trust without the permission of your beneficiaries.

Once your home has been in an irrevocable asset protection trust for at least five years, the trust will protect your home from Medicaid’s five-year look-back period and prevent them from taking your home to pay for estate recovery.

The best asset protection trust will depend on your situation.

Consider getting assistance from a certified Medicaid planner in Ohio to determine whether this option is your best choice. Take note that you need to consider the trust option at least five years in advance, so you may not be thinking about Medicaid assistance just yet.

How to Protect Your Home if You’re Already on Medicaid

You may have limited options to protect your home if it falls within Medicaid’s five-year look-back period. A common solution to protect your home is through a life estate. This option involves transferring your home’s ownership to another party in the event of your death.

As a Medicaid recipient, your assets typically go through the probate process when you die. This process involves the court dividing the assets you left behind to pay off anything necessary. You can expect Medicaid to go after your home.

A Life Estate Offers Some Protection

However, your home will not go through probate if you have a life estate. Instead, ownership will automatically pass to your beneficiaries or the subsequent owners you specified in your life estate terms. However, the successive holders may expect estate tax from the property you pass down to them, which could be a significant burden.

That said, utilizing an asset protection trust for your home long before you anticipate needing Medicaid services will serve you in the long run.

Even if you least expect to need Medicaid assistance, consider your current financial situation and health conditions. You may end up needing Medicaid assistance down the road, making early legal assistance and family eldercare money management critical to your healthcare and estate plans.

How Elder Fighters Helps You Avoid Nursing Home Bankruptcy

. If you intend to get an asset protection trust, you must do so at least five years before you begin using Medicaid services.

The earlier you put your home into a trust, the better your chances are of protecting your home from Medicaid’s estate recovery. You will need legal assistance to craft an ideal irrevocable asset protection trust that works for your unique situation.

The team at Elder Fighters includes a Certified Medicaid Planner in the Cleveland and Akron areas to help you put these plans into action. We provide family eldercare comprehensive asset protection services to help you protect your home from Medicaid recovery and nursing home costs. We offer free initial consultations to see if our comprehensive eldercare and long term care financial planning services are right for you. Put experts in your corner to fight for you.

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