New York Estate Planning & Elder Law Blog
The Centers for Disease Control and Prevention reports that there are 15,600 nursing homes in the United States and 1.3 million individuals who reside in nursing homes. While nursing homes inarguably a critical role in the lives of many people, they also introduce countless complications into a person’s lives. As people plan on passing on assets to their loved ones, they are often left with various questions about how assets can be passed on to loved ones.
To make sure you are fully informed about asset ownership as a nursing home resident, this article reviews some critical details that you should understand. Even worse than knowing the answer to an estate planning question is receiving incorrect details. As a result, this article also focuses on dispelling some myths about estate planning.
Myth # 1 – Joint Owning Assets with Your Children Exempt Assets for Nursing Home Issues
You are viewed as the owner of any assets that you place in joint name with anyone, this is true even if assets have been jointly owned for decades. Unfortunately, jointly owning assets with your child or anyone else will still be viewed as an asset that you own and will likely disqualify you from qualifying for Medicaid. Fortunately, however, various estate planning techniques exist to handle assets and avoid disqualification from Medicaid.
Myth # 2 – Transferring Assets in Any Way during the Five Years Before Can Disqualify You from a Nursing Home
The five-year rule for Medicaid refers to a question on the Medicaid application that inquires whether a person has transferred any assets to a person in the last five years. If a transfer occurs, this will likely delay a person’s ability to become eligible for Medicaid. This penalty period can be greater or less than five years. This does not, however, impact a person’s ability to enter a nursing home.
A penalty has nothing to do with the five-year look back. Instead, the value of a penalty is determined by dividing the value of assets gifted by the state’s Medicaid Divisor. This calculation results in several months for which a person is ineligible to receive Medicaid. The penalty period, however, does not apply to the transfer of assets between spouses.
Myth # 3 – You’ll Lose Your Home If You Go Into a Nursing Home
Provided you own your home in the appropriate manner, your home is viewed by the government as an exempt asset. Once qualified as an exempt asset, a home will likely remain as an exempt asset during your entire nursing home stay. A home must be used and titled appropriately for this qualification to apply, though. If your home is not titled appropriately, however, then it will not qualify as an exempt asset.
Besides your home, some of the other types of commonly exempt assets include motor vehicles, pre-paid funeral arrangements, and life insurance policies. After you pass away, a properly-titled home can also avoid probate.
Speak with an Experienced Elder Law Attorney
For many people in the United States, nursing homes play a vital role in the aging process. If you or your loved one needs assistance navigating issues with a nursing home, you should not hesitate to speak with an experienced attorney. Contact Ettinger Law Firm today to schedule a free case evaluation.