Phone: 720-200-4025
Toll Free: 887-295-8915
Fax: 720-200-4026

The Law Offices of Bradley J. Frigon can help you protect your assets from the high cost of nursing home or other long term care expenses while providing security for your spouse and a legacy for your children.

According to a study published by the New England Journal of Medicine almost half of all Americans will spend some time in a nursing home. The average cost of a nursing home in the United States is approximately $5,000 per month, and in some areas it exceeds $10,000 per month.

There are five ways to pay for a nursing home: 1) private pay, 2) long-term care insurance, 3) Medicare, 4) Veterans benefits, and 5) Medicaid. Only about 5% of Americans have long-term care insurance. Many are uninsurable or cannot afford such insurance. At most, Medicare pays part of 100 days of nursing home costs. Less than 1% of nursing home residents are receiving Veterans benefits.

The major alternative to private pay is, Medicaid. By carefully designing a thorough Medicaid plan, security can be ensured for the Community Spouse and a legacy can be preserved for children. Failure to design a sophisticated plan may result in the Community Spouse being unable to maintain his or her standard of living. In some instances, the family home may have to be abandoned. The rules of eligibility for Medicaid are strict.

A Medicaid recipient is usually allowed to retain a certain amount of countable assets. If the person is married, the Community Spouse is allowed to retain a portion of the couples countable assets. For calendar year 2003 the Community Spouse is allowed to retain one-half of the countable assets with a ceiling of $90,660.00.

Certain assets are not counted, such as a home (under certain circumstances), an automobile, personal effects, wedding and engagement rings, medical equipment, and certain types of burial funds. In a situation where there is a married couple, the assets of both the husband and wife are combined. This is true notwithstanding the fact that a prenuptial agreement may have been signed.

For Medicaid penalty purposes there is a 36-month lookback for transfers to an individual and a 60-month lookback for transfers to a trust. If the transfers are made during the lookback period, they are penalized. The penalty is a period of ineligibility for Medicaid. The penalty is calculated by dividing the uncompensated value of the transferred assets by the state divisor which is based on the average cost of a semi-private room in a nursing home in that state or region of state. The penalty can be longer than 36 or 60 months or it can be shorter. Transfers made by either the Institutionalized Spouse or the Community Spouse to third parties are penalized. Transfers between spouses and transfers to certain disabled persons are exempt from Medicaid transfer penalty.

Medicaid planning involves a number of tax considerations. These relate to income tax, gift tax, and, possibly, federal estate tax. Failure to comply with the tax law in designing a Medicaid plan can result in the payment of significant extra taxes. By designing a Medicaid plan taking advantage of the tax law, significant savings can be achieved.

The key to Medicaid planning is to act quickly and to develop a plan customized to your specific situation. Failure to develop your own plan ant to act will cost you a considerable amount of money. If a nursing home cost is $5,000 per month, then every month that you wait will cost you $5,000. Since the Medicaid penalties for transfers begin the date of the transfer, it is possible to protect significant assets by planning early. In those cases where planning was not done and the person is already in a nursing home, assets can also be protected, but the earlier the planning is done, the more money is saved.

Attaining Medicaid eligibility requires careful planning with an emphasis on properly "timing" any transfers of assets. Clearly, this type of planning should not be undertaken without competent legal counsel who has experience with the Medicaid application process and the rules regarding Medicaid. Contact the Law Offices of Bradley J. Frigon to learn how to protect your property from the high cost of nursing home expenses.