What Can We Do If Our Loved One Neglected To Do Their Elder Care Planning?
Even without having done the proper planning, there are many things that can be done on the eve of nursing home placement in order to preserve some assets. Most people think that if they did not plan five years ahead for the Medicaid lookback period, then they will have to pay privately for nursing home care; this is untrue. In Florida, there are options for appropriately and rationally spending down assets. These options are largely situational based upon homeownership, debt, and whether or not you have an IRA, liquid or illiquid assets, and rental properties. If you or your loved one require skilled nursing care, call an elder law attorney and schedule a consultation in order to review your options.
Can We Save Assets Such As Homes Or Vehicles In Last-Minute Medicaid Planning?
As a general rule, homes and vehicles are considered protected assets under Florida law, which means they would not have to be sold in order to pay for nursing home care. The trouble is that as of 2020, only $132 per month can be spent on discretionary expenses; the rest of your income must essentially be paid to the nursing home. Since $132 may not be enough money to maintain the costs associated with your primary residence (e.g. homeowners association fee, yard maintenance, insurance, taxes), you may need to talk with an elder law attorney about setting aside money to pay for your private residence.
Will Our Parents’ Life Insurance Policy Be Exempt From Medicaid If They Need Nursing Home Care?
Under federal Medicaid law, some life insurance policies are exempt from being counted towards the $2,000 asset limit. In order to confirm that a specific policy is exempt, you should request a statement of values from the life insurance company to see if the policy has a cash value. If you are acting on behalf of someone else, you will need to put the durable power of attorney on file with the life insurance company before receiving this information. As long as the policy has no cash value, it will be exempt for Medicaid purposes.
However, with the exception of group life insurance policies associated with former places of employment and retirement benefits, most term policies have a monthly premium which you may not be able to afford. Therefore, you may need to talk to an elder law attorney to determine how you can set aside assets to continue paying the life insurance premium and maintain the policy.
The other type of life insurance policy that we commonly encounter during Medicaid planning is a whole life or universal policy, which could have a cash value; if the policy has a cash value of $2,500 or less, then the cash value will be exempt. The types of whole life policies that generally meet this exemption are those that were purchased several decades ago.
Whole life policies that are used as a type of investment vehicle may or may not have a larger cash value. These types of policies tend to be the most problematic in terms of Medicaid planning. Some people will have a life insurance policy with six-figure death benefits, but also a larger five-figure current cash value. This means that if there is a big divide between the cash value and the death benefit, it could mean the loss of the death benefit.
If you’re dealing with a large life insurance policy, you should speak to an elder law attorney in Florida as soon as possible in order to make sure that the cash value and death benefit is preserved. Options for protecting the assets in policies with smaller cash values (i.e. more than $2,000 and less than $20,000) should be discussed with an elder law attorney.
For more information on Neglecting Timely Elder Care Planning In FL, an initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (904) 398-6100 today.
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