Raleigh NC Medicaid Long Term Care Planning

Medicaid is the alternative source of funding for long term care (LTC) when LTC insurance is not an option.  The average monthly cost of a private room in a nursing home in North Carolina is nearing $10,000.  In order to qualify for Medicaid to pay for nursing home care you must require skilled nursing care and your income and assets must fall under strict Medicaid limits.  Most people believe their only option is to ‘spend down’ everything they own before they can qualify for Medicaid – we routinely offer alternate solutions as qualified elder law attorneys during both times of crisis and as a proactive strategy:

Example 1: Proactive Planning to Qualify for Medicaid Assistance for Long Term Care

Bill, a widow, age 80, lives alone in his house and is in good health. His adult children live nearby and help him when he needs it. Bill’s home is worth $350,000; he has $250,000 in cash/investments.  He is concerned that someday he will require nursing home care, which will have to be paid for by selling his homestead along with using his cash/investments, and therefore his children will receive little if any inheritance.  A Medicaid Asset Protection Trust created while he is healthy and independent – is a pro-active wealth preservation strategy that can preserve up to 100% of Bill’s assets (and avoids gifting assets to his children which is a problematic as it exposes Bill’s assets to his children’s creditors, their potential divorce proceedings, or to their poor decisions.)  Therefore, Bill will be able to qualify for Medicaid assistance later, if needed, while preventing a ‘spend down’ and thus preserving inheritance for his descendants.

Example 2: Crisis Planning to Qualify for Medicaid Assistance for Long Term Care

John, 82 and Sarah, 78 are married.  Sarah suffers from advanced dementia and recently wandered away from home and now barely recognizes John, she needs help bathing and dressing, and cannot prepare her own meals. John can no longer care for her and recently placed her in a nursing home. They own their home worth $450,000 and a car valued at $50,000. Together they own checking and savings accounts valued at $150,000 along with non-qual. investment accounts valued at $350,000. John is currently paying $8,000 a month for a room for Sarah – his social security income is $3,000 per month and Sarah’s is $2,000.  Some might start down the path of ‘deliberate impoverishment’ to qualify for Medicaid while others might feel that they would never qualify and therefore continue private care resulting in a spend down of their assets over their remaining lifetime with nothing to leave their children as a result.  However, an effective crisis wealth preservation strategy using a Qualified Medicaid Annuity would permit John to keep the house, everything in the house, the car, and roughly $250,000 of the $500,000 held in cash and investment accounts, while using the other portion to pay for private care until that time when Sarah qualified for Medicaid long term care assistance.  

Final considerations for the aging and the elderly – Enhanced Medicaid Financial Power of Attorney:

Is there planning in place now should your loved one need to qualify for Medicaid assistance?

If the answer is ‘No’ – then ensure an Enhanced Medicaid Durable Financial Power of Attorney is in place that will later empower an adult child or loved one to take the necessary measures to preserve and protect the estate should incapacity arrive and action is needed by way of Medicaid planning.

Call Chambers & Ennis today to speak with an elder Law Attorney at (919) 277-2200.

Based in Raleigh, North Carolina we assist clients throughout Wake County, NC and Johnston County, NC as well as the cities of Cary, NC, Morrisville, NC, and Clayton, NC.

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