When the time comes for Mom to enter a nursing home, you may be worried about the expense. Did you know that a typical nursing home might cost $50,000 or more per year, which can easily burn through someone’s life savings? Many people expect Medicaid to take care of the bill, but are then shocked when a parent has too much money to qualify. Other times, if a parent does end up qualifying for Medicaid, the shock can hit when Medicaid comes to collect reimbursement from their parent’s estate after his or her death for the cost of the nursing home care that the program covered. There may be, however, several ways you can help your aging parent protect assets to pay for nursing home care. Let us take a look at three ways to help prevent Mom from losing her life savings to a nursing home.

1. Meet with a Qualified Elder Law Attorney. An elder law attorney familiar with the Medicaid rules in your state and local area can go over all of the specifics with you and explain what your options are for protecting your parent’s life savings. For the most part, Medicaid will look at all of your parent’s assets and income during the past 60 months (5 years) to determine eligibility for the program. You may be able to remove assets from this calculation allowing your Mom and Dad to qualify for Medicaid and protect assets. 

2. Understand What a Healthy Spouse Can Keep. If only one of your parents needs nursing home care, but the other is able to remain living independently, the healthy spouse is entitled to keep a certain amount of assets that Medicaid cannot go after for reimbursement. This amount varies significantly from state to state, so find out early what the limit is for your aging parent.

3. Transfer Assets to Children and Grandchildren. A popular way to shelter assets from Medicaid may be to transfer them to children and grandchildren. Each spouse in a married couple can transfer up to $15,000 per year to any one recipient. If Mom and Dad are still alive and married, they can collectively transfer up to $30,000 per year to each child and grandchild. Making these gifts early on can be a good way to help ensure that assets are transferred out of the countable pool for Medicaid.

For assistance in planning to cover the expense of a nursing home and other related legal issues, please reach out to our office to schedule an appointment.