Legal Blog

Four Myths of Paying for Long Term Care


A Light, Thanksgiving Dinner Topic of Conversation

It is hard to believe that we are now staring down the business-end of the holidays.  In a few short days, we will be sitting around the table, hopefully with family and friends, discussing the talk of the day.  And for anyone who is in need of a topic of conversation that is slightly more interesting than the weather, but slightly less lively than politics and religion, well…who doesn’t want to discuss some common misunderstandings concerning paying for long-term care?  I know, I know.  You’re welcome. Here goes:

MYTH #1: Medicare pays for long-term care.

This is mostly false.  Medicare pays for short stints of rehabilitative care in a rehabilitation facility (which is also usually a nursing home), and hospice (which is really hard to qualify for).  All of Medicare coverage for rehabilitative care is temporary, and usually much shorter than people expect.

The only government benefits program that is guaranteed to pay for a person’s costs of care in a nursing home is the Medicaid long term care program.

MYTH #2: Adding your kids to the title of your bank account will help you qualify for Medicaid.

I hear this a lot from clients.  Most people will add a son or daughter’s name to the title of their account with the expectation that only a portion of the account will be considered to belong to the parent if the parent has to apply for Medicaid.  However, since a joint owner of an account can withdraw funds without the permission of any other owner, the whole account is considered to belong to the person applying for Medicaid.

MYTH #3: Putting your kids’ names on the title of your house will help you qualify for Medicaid.

Be aware that there is a five year “lookback” period under current Medicaid rules.  With very few exceptions (but…there are exceptions), if large gifts are made within five years of an application for Medicaid, those gifts will seriously complicate or maybe even prevent a person from qualifying financially for Medicaid.  Adding children to the title, without some planning beforehand, could create more problems than it solves.

MYTH #4: If a person is married and one spouse is in a nursing home, you have to spend half of the assets and then the spouse in the nursing home will qualify for Medicaid.

So, a confession: it drives me crazy when nursing homes tell people this.  We have something available to us called the spousal impoverishment laws.  With proper planning it is possible to preserve almost all or at least most of the couples’ assets for the spouse living at home.

And there you have it—a summary of the four myths I have to correct most often when I’m meeting with clients to discuss Medicaid planning and asset preservation planning.  I can’t promise this will be the most interesting thing you talk about at the holidays this year, but hopefully useful information, nonetheless!

 

For more information on this topic or Estate Planning, please contact
Brianna Davidson Jarrett at bjarrett@offitkurman.com or 410.209.6466

 

ABOUT BRIANNA JARRETT

Brianna D. Jarrett  |  bjarrett@offitkurman.com  |  410.209.6466

Since her admission to the Maryland Bar in December 2010, Brianna Davidson Jarrett has practiced in the areas of elder law and estate planning. Brianna earned a Bachelor of Social Work from Messiah College in 2007, and then pursued a Juris Doctor at Widener University, where she served as the Editor-in-Chief of the Widener Law Journal, and graduated magna cum laude in May 2010. She then joined The Law Offices of Nomiki Bouloubassis Weitzel, LLC, as a law clerk and, after her admission to the Maryland Bar in December 2010, she became a practicing attorney with the firm and continued as an Associate before joining Offit Kurman in 2018. Brianna is a member of the National Academy of Elder Law Attorneys (NAELA), the American Bar Association, and the Maryland State Bar Association, where she is also a member of the Estates and Trusts Section as well as the Elder Law Section.

 

 

 

ABOUT OFFIT KURMAN

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