It’s the conversation people don’t have until they have to,
but by then, it’s too late.
The fact is that in 2010, more than 7,000 people turned 65
years old or older every single day, a figure that is
predicted to rise in 2011. Further, an AARP survey revealed
that only 4 in 10 of those people feel they will be
financially secure for their golden years.
For many, that lack of financial stability will transform
from being a worry to becoming a crisis if they discover
they’ll need any kind of assisted living. That’s why Gabriel
Heiser, an attorney with more than 25 years of experience in
nursing home law, believes that people should start planning
now, even if they aren’t close to their 65th birthdays.
“The average monthly cost of a nursing home today is $6,917
per month, and a typical Alzheimer’s patient will spend
$395,000 for their nursing home care after diagnosis,” said
Heiser, author of How to Protect Your Family's Assets from
Devastating Nursing Home Costs: Medicaid Secrets (www.MedicaidSecrets.com).
“Those costs are only going to rise, so it’s important to
plan now. One important benefit to consider is Medicaid,
which can help offset a good amount of those costs, but only
if you know what it takes to qualify for those benefits.”
The mistake a lot of people make is thinking that they can’t
qualify for Medicaid, according to Heiser.
“Many feel that because they own a home or have some assets
that they can’t qualify for Medicaid help with their nursing
home and doctor’s bills,” he said. “The truth is there are a
variety of assets people can own and still qualify. It’s
just a matter of knowing the rules, and making a plan to
meet those requirements.”
Heiser listed the asset limits for those applying for
Medicaid. They include:
• Cash – You can possess $2,000 cash that will
not be counted as an asset in determining your Medicaid
• Home – There is a $500,000 exclusion toward
your home, meaning that if your home is valued at $500,000
or less at the time of your application, it is excluded as
an asset. Some states use the higher permitted exemption of
• Car – Up until recently, you could exclude
only one car at a value of $4,500 or less, however that law
has been changed. Now, one automobile of ANY current market
value is excluded on your application.
• Funeral and Burial Funds – If you have a
pre-planned funeral or memorial arrangement, the entire
value of that plan is excluded. If you do not, a separate
bank account that contains $1,500 toward funeral expenses
can be excluded. If you have pre-purchased burial plots, you
can exclude not only the costs of the plot for the
applicant, but for the entire family, and still be eligible
• Property – According to federal law, any real
or personal property that is essential to self-support,
regardless of value or rate of return, is excluded. That
could include farms, rental properties and other real estate
investments that generate income necessary for self-support.
For rental income, however, the property must generate at
least 6 percent of its value annually in order to qualify
for the exclusion.
• Life Insurance – Only the cash value of a
life insurance policy owned by the applicant is counted,
thus, all term policies are ignored.
“There are so many other rules that can benefit those who
aren’t sure they’ll have enough when the time comes,” Heiser
added. “The key is to plan now and act now. These laws exist
for your protection, and avoiding the discussion and the
planning necessary to take care of the potential
complications just because it is an unpleasant topic will
only result in a more unpleasant conversation when you
realize you’re not ready when the worst happens. That can be
a very expensive dilemma. Peace of mind right now, however,
won’t cost a dime, and could save you hundreds of thousands
of dimes later.”
About the Author
Gabriel Heiser, J.D., has focused exclusively on estate
planning and Medicaid eligibility planning, including
trusts, estates, gifts, and related tax issues, since
graduating from Boston University School of Law in 1983.