You can protect your nursing home by forming a life estate, putting it in an irrevocable trustee, purchasing long-term care insurance, using a Medicaid asset protection trust, or transferring all of your assets.
The process isn’t as simple as it sounds. This article will help.
Current reports indicate that around 5% of senior citizens in the US need to move into a nursing home. When planning your retirement, you should also consider nursing homes.
Nursing homes can be pretty expensive. These homes can run between $250-$300 per person daily!
Yes, Medicaid is available, but not all are eligible. You will need to pay for the nursing home from your savings. If your savings run dry, the nursing homes may have to sell your home to allow you to stay.
It sounds scary.
You Can Save Your Home by Planning. How do you Plan?
This article will provide a detailed guide on preventing your home from being taken over by a nursing home. Aside from answering all your questions, I will also share my professional experience. Keep reading to the end.
Let’s first find out what happens to your house after you move into a nursing facility.
What Happens to Your Home if you Move to Nursing Home?
It depends on many factors, including your health, marital status, and the terms of your will.
Here are some examples of what might happen in your home if you move to a nursing facility.
If you’re married and your spouse lives in the house, the home will likely become your spouse’s property.
Your house will become your own once your health improves, and you can leave the nursing home.
Children may have the right to live in your home if you have them.
If you have living trust or will, you might be able to leave your home to your loved ones or children.
If you don’t have anyone to care for your home or the money to pay the nursing home costs, your property may be sold to cover the nursing home costs.
The proceeds from sale of your home will go towards paying for the costs of your nursing home.
Any primary resident may live in your home if you qualify for Medicaid. There is no problem if you return home.
If you are a Medicaid recipient and die in a nursing facility, the state can sell the house to pay for your medical expenses.
If your house is being sold in any of these cases, any money left will be given to your family or you.
These are just a few possible events that could happen to you if you move into a nursing facility. These are not uncommon situations. However, every situation is unique, and what can happen can vary.
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As you can see, there’s a good chance that Medicaid or a nursing home will take your house. How can you avoid this?
Let’s get to it!
How to Avoid a Nursing Home Taking Your Place
You can avoid a nursing home taking over your home by making preparations well before you visit the facility. You could end up with a nursing home taking over your home.
How to Protect Parents’ Assets from Nursing Homes
Here are some ways to prevent your home from being taken over by a nursing home
1. Form A Life Estate
A life estate can help you save your home from being taken to nursing homes. A life estate ensures that life tenant/owner of the property is the one who owns it until their death. Your property will then be owned by the person who shares it with you or the next deed to the life state.
The nursing home cannot take your home under any circumstance. If you’re eligible for Medicaid, you must form the Life Estate within five years of becoming a resident at a nursing facility. You could lose your Medicaid eligibility.
For help in forming a living estate, please get in touch with an experienced lawyer.
2. Place Your House in an irrevocable Trust
You can avoid having your house taken by nursing homes by putting it in an irrevocable trust. The trust cannot be canceled once it is signed. You can’t cancel a trust that has your house as an irrevocable Trust. The house becomes your property. A trustee must be appointed.
Nursing homes cannot take your home if it is not in an irrevocable trust. For Medicaid, however, you must have your house in an irrevocable trust for at least five years.
Consult with an expert lawyer before making any decisions about irrevocable trust.
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3. Buy Long-Term Care Insurance
Long-Term care insurance can also be a great way to prevent your home from being taken over by a nursing home. It covers adult daycares, nursing homes, and home care for patients with chronic conditions or illnesses.
Long-term care insurance can be quite expensive these days. You will also lose all your money if you don’t require a nursing home in your later years. Before you buy long-term care insurance, make sure to consult your financial advisor.
4. Medicaid Asset Protection Trust
Medicaid Asset Protection Trust allows you to be eligible for Medicaid while avoiding the nursing home taking over your home. The trust will ensure that your assets don’t exceed the Medicaid eligibility limit. Your house will be held in trust, so that nursing homes cannot take it.
You will, however, lose some control of your home if you are a beneficiary of Medicaid asset protection trust. Additionally, different states have different laws concerning Medicaid asset protection trusts. Your house could be taken in certain states.
Before you make any decisions, consult an expert lawyer.
5. Transfer Your House 60 Months Before
Transferring your house to a nursing home is another way to save it. Transfer it must be done at least 60 days before you can move into a nursing home. You might not be eligible for Medicaid if you do.
This rule does have some exceptions. If you move your house, you will still be eligible for Medicaid.
- Younger than 21 years old not eligible.
- Blind or disabled children
- Sibling with equity in the home and who has lived in it for at least one year
- A caretaker child.
- This law or policy may vary from one state to the next.
It is a very effective method. However, it is impossible to predict when you will require a nursing home. Make a will or consult a senior lawyer to determine when you need a nursing home.
These are just a few effective ways to prevent your home from being taken over by a nursing home.
What should you do if you’re a child and want to save your parent’s property from a nursing facility?
Let’s see what happens.
How to Protect Parents’ Assets from Nursing Homes
Here are some ways to protect your parent’s assets from the nursing home
If you don’t feel the need, avoid nursing homes. Instead, care for your parents who are sick.
You can be a caregiver child until your parents admit you to a nursing home.
Inform your parents about the laws and policies governing nursing homes that take their homes.
If you can, influence or gift your parents to purchase long-term care insurance.
To save your parents’ assets, consult a senior lawyer with them.
These are just a few ways to protect your parent’s assets from nursing home abuse. What if your spouse needs to sell the house?
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Can you Sell your House if Your Spouse is in a Nursing Home?
You can sell your house even though your spouse is in a nursing facility. Consider some things before you put your house up for sale.
First, your spouse must give up equity in the home if they are eligible for Medicaid. You will have to repay the state for half of your spouse’s Medicaid-funded nursing home costs.
You will need their consent to sell the house if your spouse is in an assisted living facility. Most nursing homes will provide a form you can complete to grant them authority to act for your spouse.
How to Avoid Nursing Home Taking Your House. It would help if you also considered how the sale would affect your spouse’s eligibility for Medicaid. The house sale could result in your spouse losing their Medicaid eligibility if the property’s value exceeds the Medicaid eligibility limit.
Different states have different Medicaid eligibility limits. Know your state’s Medicaid eligibility and determine if it can affect your spouse’s ability to sell the house.
It would help if you spoke to an expert because each state has laws.
It is also important to consult an attorney if you are selling your house.
We now know how to save your home from being taken over by nursing homes. But what if a nursing home takes your pension?
Can a Nursing Home Receive Your Pension?
A nursing home cannot take your pension in the US. If you owe a substantial amount to a nursing home, they may be able to take your pension to pay the bills.
Additionally, Medicaid may allow the nursing home to use a portion of your pension for your care. For Medicaid purposes, a pension is a countable income.
Finally, they might be able if you have a legal agreement with the nursing facility that allows them to receive your pension.
Check out this article about firing before you retire to learn if getting fired can affect your pension.
I hope you find our article How to Avoid Nursing Home Taking Your House Clearing your mind.
It’s a complex issue, and the stakes can be too high. Before making any decisions, it is a good idea to speak with a lawyer to determine the law in your state.
It is for today. Have a wonderful day!
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