New Year’s Resolution 1: Protecting Your Home from Nursing Home Costs

It’s a new year, and we want to help you take easy steps to protect your hard-earned assets.  Over the next week or so, we’ll be proposing a series of mini-resolutions that you can easily put into effect right now to protect your family.

Problem:  If you are approaching retirement age, you should know what could happen to your life savings if you end up going into a nursing home.   In Massachusetts, nursing homes cost about $13,000 a month, or about $156,000 a year.

Nursing home costs are not covered by your normal health insurance, so you will have to use your life savings to pay for the nursing home.  Obviously, at $156,000 a year, your nest egg won’t last very long.

The good news is that Medicaid, a federal-state benefit program, can help pay for your nursing home, even if you own your own home.  But if Medicaid pays for your nursing home, it may put a lien on your home for every dollar it pays the nursing home, and after you die, your family will have to pay off that hefty lien.

Solution:   To avoid this lien, create an irrevocable Medicaid trust and transfer ownership of your home to the trust.   You will have the right to live in the home as long as you live.   But if the house is in the trust at least five years before you go into the nursing home, Medicaid will no longer consider you the owner of the house, and it will not be able enforce any lien against it.  In other words, your family will inherit your home free and clear.

What to do:   Time is of the essence.  Consult an estate planning attorney today to get the “five year clock” ticking on your Medicaid trust.  The sooner you plan, the more likely you can save your house for your family.

Conveniently located in North Attleborough, we serve clients from Massachusetts and Rhode Island, especially the communities of North Attleborough, Attleboro, Plainville, Norton, Taunton, Norton, Foxboro,  Wrentham, Rehoboth, Franklin, Mansfield, Seekonk, Providence, Woonsocket, Cumberland, Pawtucket, and Lincoln.

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