Your mother is older and having health issues. She has saved her whole life and wants to leave an inheritance to her children. You know she may need a nursing home at some point and you want to make her money last as long as she needs care, if possible, without totally impoverishing her. The time to start planning is before your mother needs any care. While it's difficult to predict if or how much care your mother will need, it's easier to predict that if she needs a lot of long-term care services, she will have to pay for some or all of it herself.
If you wait to start planning for her long-term care, her options may be limited. She, and you, may not have the money you need to pay for the services she would want. Long-term care is expensive. A private room in a nursing home costs, on average, $6,600 a month. A room in an assisted living facility costs more than $3,000 a month. If your mother has more than $100,000 in savings, she may be able to pay for a little longer than a year in a nursing home, almost 3 years in an assisted living facility, or several years of home care.
Private financing options exist to help pay for long-term care, including long-term care insurance, trusts, annuities or reverse mortgages. Which option is best depends on your loved one's age, health status, risk of needing long-term care services and personal financial situation.
Some of Ohio long-term care insurance companies offer policies that qualify under the state's Long-term Care Partnership Insurance Program. Partnership insurance offers a way for people to buy long-term care insurance, receive policy benefits and protect a matching amount of assets if they need to apply for Medicaid. For more information, visit www.ltc4me.ohio.gov or contact 1-800-686-1578. Information also is available from area agencies on aging or county departments of job and family services.
Medicaid, a needs-based program, can help pay for nursing home care, but only for individuals with very low incomes and few assets. Many families transfer money or assets from an older family member to another person or into a trust so an individual can qualify. To prevent fraud, states conduct a review, or "look-back," when an individual applies for Medicaid coverage for long-term care. The look-back determines whether, within the last 60 months, the individual or a spouse transferred assets, such as cash gifts or ownership of the home, to another person for less than fair market value. An asset transfer within the look-back period will be questioned and, could prevent the person from receiving Medicaid long-term care benefits until a penalty period expires.
Always consult an attorney who specializes in elder and estate planning who's based in your state for long-term planning advice, law experts unanimously counsel. An attorney who practices elder law or estate planning law can provide invaluable assistance in preparing for all possible scenarios. Insurance, trusts, annuities or reverse mortgages can have major fiscal implications for Medicaid long-term care eligibility. Asset transfer can be a complicated process and applying for Medicaid too early, or before provisions have been made to protect your loved one's assets, could result in major mistakes that will be very expensive.
ProSeniors (1-800-488-6070) provides free legal information, advice and referral for Ohio residents, age 60 and older. You can find more information at ProSeniors' Legal Hotline.
Consumers can make costly mistakes if they do not know all the facts and ramifications. Professional help may be expensive in some cases, but mistakes cost more.
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