As we age, it is important to start thinking about long-term care costs. If you plan to go to a nursing home, those expenses can slowly begin to erode your hard-earned assets.
So, how do you start protecting your assets from nursing home costs in Wisconsin? Let’s take a look at a few strategies that can help to protect your wealth for future generations.
Why Asset Protection Is Important
With the rising costs of nursing home care, you want to ensure that your estate and assets remain protected as you move into these care centers. While you could pay out of pocket for these costs, that can quickly reduce your estate and leave your loved ones with nothing but memories after you pass away.
Many of these strategies focus on moving assets so that you can qualify for the Medicaid benefits program. However, these plans must be enacted sooner rather than later, or you may not be eligible for those plans.
Gifting Assets
One of the most common ways to protect your assets is to gift them to your loved ones. While you are still in good health, you may want to transfer property or money. In these cases, you can create a safety net as you reduce the value of your estate.
Why do you want to reduce the value of any assets in your estate?
To qualify for Medicaid, you need to meet certain income eligibility requirements. However, gifting assets can also cause issues for Medicaid eligibility. There is a certain look-back period that will review all your financial transactions. If it looks like you are moving assets, it could affect your eligibility. Gifting should be completed well before applying for these benefits.
Annuities for Medicaid Eligibility
You may also want to consider putting your income into a Medicaid-compliant annuity. With this, you can also reduce your estate value and qualify for Medicaid benefits. When you do this, you will have to deposit a lump sum of cash. After that, all the money is invested, and you will receive regular payments from the provider. With that financial investment, you can decrease your assets, which could help you qualify for Medicaid – but keep in mind that all payments will be eligible as income.
Get Long-Term Insurance
Another way to help reduce the amount of your assets spent on nursing home costs is to apply for long-term insurance. These insurance policies act like other plans, but they can help to cover any costs associated with your care. You will have to pay monthly premiums to keep the policy active. However, these plans can safeguard some of your estate from those nursing home expenses. Along with that, you will not have to worry about the hassles of applying for Medicaid benefits.
Create a Trust
You have several options to establish a trust. Deciding on an irrevocable trust is one way to protect your assets from nursing home costs. Once you place these assets in the trust, you no longer own them. From that point on, a trustee will manage them. However, you can still receive income and interest for those assets. In most cases, these assets are exempt from any Medicaid claims.
Transfer Property
Along with gifting your assets, you may want to think about transferring your property. In many situations, you can transfer ownership to another person while retaining the right to stay on the property. Loved ones, friends, or any other trusted individual will be considered a “remainderman.” You will have all the rights to use and occupy the property. But when you pass away, that individual will become the owner of the property.
When it comes time to apply for Medicaid, these properties are not considered a part of your estate and will not affect your eligibility for benefits.
Learn More About Protecting Your Assets
Protection of your assets from nursing home costs in Wisconsin can be challenging. If you don’t have a plan in place, you may not qualify for Medicaid, or you might end up spending your assets to secure long-term care.
If you would like to learn more about your options, contact Collins Law Firm. Our experienced estate planning team helps individuals like you build and protect their legacy. Schedule your free and confidential consultation today by contacting us or calling (414) 207-6292.