How Can You Plan For Long-Term Care Costs and Protect Your Home From Medicaid

In this informative video, Hooper Law Office Estate Attorneys Abigail Plankey and Collin Mettelka discuss essential strategies for planning Long-Term Care Costs and safeguarding your home from potential Medicaid recovery. Understanding the financial implications of Long-Term Care is crucial for ensuring your assets are protected, and your loved ones are not burdened with unexpected expenses.

Millaine Wells
Welcome back to Local Five Live. When Long-Term Planning for your family, protecting someone's home from Long-Term Care costs is definitely a consideration.

Lisa Malak
It's today's topic with Hooper Law Office and Attorneys Abigail and Colin. Good morning to you both. Well, let's start with why this is a concern.

Abigail Plankey
So oftentimes with Long-Term Care Planning in the home, the phrase or terminology that we hear is an example. Mom or dad went into care and then they passed away and the nursing home came in and took their house. And so the concern is, you know, why can the nursing home come and take the house? Where does that come into play?

If someone needs care and it's not really the nursing home coming in and taking someone's house. It's because that person would have access Medicaid benefits and Medicaid as a federal benefit. Wisconsin has its own program that helps to pay if someone needs Long-Term Care and skilled nursing assisted living in their own home. And when you access that Medicaid benefit, it is something that has an Estate recovery component.

So a home is a non-countable asset for Medicaid. You can have it and access benefits, but when that person passes away, that's where a lien can be placed against the property up to whatever was paid in benefits. So someone could lose the equity in their home to their Long-Term Care costs.

Millaine Wells
How can someone avoid or can someone avoid having a lead placed on their home In this situation?

Collin Mettelka
So because the lean or the Estate recovery only happens when that person is accessing Medicaid, you know, a couple of situations where that would be avoided as if you had enough income and assets to pay privately or if you're not fortunate enough to be in that situation. Things like Long-Term Care Insurance could also help pay for your stay without maybe having to access Medicaid, but without those things.

Well, prior to August 1st, a 2014 Revocable Trusts and Life Estate Deeds or something that could help protect assets. But now we're in a situation where one of the more popular tools would be an era Revocable Trust.

Lisa Malak
So why is that Irevocable Trust more trustworthy, if you will, that say putting the home in kids' names?

Abigail Plankey
Sure. So we always say that there are very few absolutes. You know, attorneys are not nice and we answer with like, it depends they're giving to giving these things. But this is probably one of the most true things, is it's just never a good idea to put your home and your kids' names. And the reason why an Irrevocable Trust is so much safer.

And we do talk about this at our at our public seminars, too. But just to give you a high level, there's no greater loss of control for someone than to give something that they own to another person. We can run into like evictions and rent and issues like that, which happens. It's a huge concern for liability because we're concerned that if someone needs Long-Term Care, well, what happens to them, happens to their property.

Another person still has liabilities too, even if it's not Long-Term Care. And it's also bad for taxes, which is somehow the the point that that we get most people interested in is it's bad tax Planning. There can be strategies in the Irrevocable Trust to help preserve 121 exclusions and step up in basis, which is really helpful to reduce or eliminate capital gains taxes.

Lisa Malak
Okay.

Millaine Wells
And this is why you need them to help you navigate all of that.