Nursing homes do not take assets from people who move into them. But nursing care can be expensive, and paying the costs can require spending your income, drawing from savings, and even liquidating assets. Neither the nursing home nor the government will seize your home to cover expenses while you are living in care.
and is a Certified Financial Planner. Nursing homes can't take a senior's life insurance benefits away from designated family beneficiaries to cover outstanding costs. However, nursing homes can accept payments from the resulting funds of a sold or surrendered policy.
Many retirees go to nursing homes as their needs increase, creating a dilemma for protecting their wealth. A revocable trust places your wealth in a tax-protected vehicle you can control until you die. But, unfortunately, it won't protect assets from a nursing home.
A nursing home itself does not directly take assets from residents.
The basic rule is that all your monthly income goes to the nursing home, and Medicaid then pays the nursing home the difference between your monthly income, and the amount that the nursing home is allowed under its Medicaid contract.
California eliminated their asset limit effective 1/1/24. While this means one's home is automatically safe from Medicaid while they are living, the home is not necessarily safe from Medicaid's Estate Recovery Program.
An irrevocable trust can help you avoid having to use your own assets to pay for nursing home care by making you eligible for Medicaid. Medicaid can pay some or all of your costs, but only if you meet strict financial guidelines for income and assets.
If an individual pays for some or all nursing home expenses through Medicaid, states can seek repayment upon their death through the Medicaid Estate Recovery Program (MERP). Each state has their own MERP laws, but assets will never be seized while the person receiving care is alive.
Trust & Will can help protect assets from nursing home costs
Long-term care insurance, Medicaid-compliant annuities, irrevocable Trusts, life estates, and financial gifting each offer their unique way of protecting assets and ensuring eligibility for Medicaid benefits.
There are also two state exceptions when it comes to the Look-Back Period – California and New York. There is no Look-Back Period for HCBS Waivers in California, and it's 30 months (2.5 years) for Nursing Home Medicaid, although that will be phased out by July 2026, leaving California with no Look-Back Period.
They charge for their service but don't take your pension or social security, you can use other money to pay if you like. Most will use their pensions and social security to pay or sell the house and use the proceeds or draw from savings.
Nursing home abuse and neglect are among the most common complaints, often caused by understaffing, inadequate training, or caregiver misconduct.
Can Medicare take your home to cover nursing home expenses? Medicare can't take your home and doesn't cover nursing home room and board. However, a Medicaid lien can be placed on your home, and they can sell it once you pass to recover the funds.
If your name is on a joint account and you enter a nursing home, the state will assume the assets in the account belong to you — unless you can prove that you did not contribute them.
Once your home is in the trust, it's no longer considered part of your personal assets, thereby protecting it from being used to pay for nursing home care. However, this must be done in compliance with Medicaid's look-back period, typically 5 years before applying for Medicaid benefits.
The day your assets are transferred into an irrevocable trust, they become non-countable for Medicaid purposes. Unfortunately, those assets are seen as a gift and are subject to the Medicaid look-back period.
Medicare and most health insurance plans don't pay for long-term care. in a nursing home. Even if Medicare doesn't cover your nursing home care, you'll still need Medicare to cover your hospital care, doctor's services, drugs and medical supplies while you're in a nursing home.
Like the PNA, the amount of the Home Maintenance Allowance varies by state. As an example, California allows $209 / month as their “Home Upkeep Allowance” and Pennsylvania allows $965.10 / month as their “Home Maintenance Deduction”.
If you are in a nursing home for fewer than 90 days, your SSI benefits will not be affected.
If a parent has become incapacitated, he or she needs to have identified – through a power of attorney – someone who can act on their behalf, for the sale to take place. If the caregiver has no legal authority, then the caregiver has absolutely no right to sell the home.
Is It Too Late To Save Assets If A Loved One Is Already In A Nursing Home? The only time it's too late to try to save resources when someone is already in a nursing home is if you have already spent every last dollar on nursing home bills.
It should be stated at the outset that nursing homes and other similar facilities do not “take” people's assets – although it can feel that way! The reality is, any person in need of a nursing home stay is required to pay for the services provided.
Money and assets you have will go toward the bill. If you are single, 100% of your money from any source is considered available to pay your bill. If you have a spouse living in the community, including a common law spouse, 50% of the family assets is considered available to pay your bill.