Nursing Home Planning Attorneys Assisting Seniors in Hot Springs, Arkansas and Surrounding Areas
With nearly $8,000 per month as the average cost for a private room or $10,000 per month for a shared room in a U.S. nursing home (according to a 2021 Cost of Care Survey by Genworth), how to pay for nursing home care can be a huge concern for our aging population. Even more concerning are the increases in costs that are expected. In Arkansas, the monthly cost of a private room rose 15% between 2016 and 2020. Annual costs are projected in the Genworth study to go from approximately $92,000 in 2016 to approximately $142,000 in 2030.
Only a small percentage of Americans have enough money saved to pay for a long nursing home stay, and many fear losing all they have worked so hard for once they can no longer care for themselves at home. This is why it is important to address these concerns long before nursing home care is needed, while there is still time to implement strategies that can help.
Call Dudeck Law Firm today at 501-327-3527 to speak to one of our skilled nursing home planning attorneys about good options and ease your mind about the future.
What Are Some Options for Paying for Nursing Home Care?
The main long-term care assistance program in all of the U.S., including Arkansas, is Medicaid.
Medicaid is a combined state and federal government entitlement program that can cover the full cost of nursing homes and medical care for individuals who qualify. You must be over 65, disabled, blind, or on dialysis and must meet strict income and asset limits to take part in this program. If you qualify for Medicaid, there will be no cost to you, though in some cases, a Medicaid Estate Recovery Program may take assets from your estate after your death to repay some of the costs that were paid by Medicaid on your behalf.
Long-term care insurance is available, but unless it is purchased while you are young and healthy, the cost can be extremely high, and you risk not passing a required physical if any.
Reverse mortgages are widely advertised as a good way to tap the equity in your home for expenses like long-term care, but it is wise to be cautious before entering into one of these mortgages. Consult with a skilled estate planning attorney before signing on the dotted line. Read on for more about this option.
How Can I Use a Reverse Mortgage to Pay for Nursing Home Care?
A reverse mortgage is a loan against the equity in your home. Unlike the mortgage you may have used to buy your home, you do not have to pay the reverse mortgage back while you are living in the home. If you were still making regular mortgage payments, a reverse mortgage stops them and allows you to borrow money against your equity in the house. Using a reverse mortgage for nursing home care is only possible; however, if the home is owned by a couple and one spouse will remain living there. Because of the way reverse mortgages work, once the borrower dies or has not lived in the home for one year, the loan must be paid back. Usually, the house is sold, and the proceeds pay back the reverse mortgage. However, if a couple has both signed the loan, it does not have to be paid back until the last borrower dies or moves away for one year. Therefore, it is possible for one spouse to have their nursing home costs paid with the proceeds of a reverse mortgage as long as their spouse remains in the home. This can be a tricky proposition, however, because there is no guarantee that the at-home spouse will be able to stay in the home longer than the spouse who needs care is in the nursing home. Also, there are fees up front, and the loan accrues interest, so some of the home’s equity is lost. It is important to consult with an experienced Hot Springs estate planning attorney before committing to a reverse mortgage. There may be other, more beneficial options available.
We Don’t Qualify for Medicaid, But Still Can’t Afford Nursing Home Costs… What Do We Do?
It is quite common for a Medicaid application to be denied if you have not consulted with an experienced nursing home planning attorney first. While you may currently have assets and/or income that are over the limits for eligibility, there are strategies that can be implemented to reduce assets and income in beneficial ways. Because Medicaid has a 5-year look-back window, however, it is important to begin this planning long before you expect to need long-term care. What the look-back period means is that if you have given large gifts, moved assets into trusts, or otherwise made financial transactions within 5 years of your Medicaid application, those transactions may be counted in your assets or income. For example, if you put your house into your child’s name one year before applying for Medicaid or sold it to them below fair market value, the value of the house could be included in your total assets, even though you don’t technically own it anymore. Had you made the same transaction 5 years or more before your Medicaid application, it would not be counted.
Do I Need a Nursing Home Planning Attorney?
Long-term care can be one of the biggest expenses of a lifetime. Failing to plan for it can mean that you or your loved ones may not get the care they need when they need it. Call Dudeck Law Firm today at 501-327-3527 to put a plan in place that will ease your mind.