Have you ever wondered, “The older I get, does it really matter if I continue to keep good financial records?” Absolutely it does. We don’t know what the future holds. But for those Americans who need skilled nursing help, keeping good financial records matters — and could even impact future generations of their families.
Long-term care is very expensive in Ohio, ranging from $4,000 to $10,000 per month depending on the facility and the level of care. Anyone who has experience dealing with Medicaid for long-term care has probably heard the phrase “five-year look-back period.” Individuals who enter a facility without planning must “spend down” their life savings to pay for the hefty cost of care. On the contrary, individuals who have completed asset protection planning receive help paying the balance of the cost of care through Medicaid.
Have you ever heard the phrase “improper transfer”? When filing for Medicaid, the government looks back at your financial history for five years to make sure you have not made any “improper transfers” of money or assets to quicken your eligibility for Medicaid (or to prevent the nursing home from using those assets).
You might be thinking, “Do people really give away their stuff to hasten their eligibility for Medicaid? Or to prevent the nursing home from getting their money?” Yes, but that’s not always the case.
If an unexplained transfer of money or assets occurred without financial records to justify it, Medicaid will presume you gifted money away to avoid spending it on the nursing home when it looks at your financial history. If you keep poor financial records, Medicaid will presume this behavior even if there is an acceptable reason for the transfer.
And Medicaid will refuse to pay for your long-term care for a period of time as a consequence for making this “improper transfer.” That’s why we recommend that you continue to keep good financial records for all your financial transactions, regardless of your age.
Now you might be wondering, “Is there a way to protect my assets and life savings from a nursing home spend-down?” Absolutely. At AlerStallings, we help families protect assets from the nursing home through trust planning so that future generations of your family can enjoy the benefits of your hard work.
