Long term care is very expensive. Few people are prepared for the cost when they determine they need care. Fortunately, there are ways to deal with the bills even if you do not have much money.
Medicaid requires beneficiaries to spend all savings and other assets down to impoverishment before they will pay for care. This includes a requirement that any life insurance with a value over $1,500 be cashed in—some people have life insurance so that there is money to pay for their funeral. If someone needs Medicaid to pay for their care, this insurance will need to be cashed in, leaving no money for final expenses as planned. Medicaid does, however, let you set aside up to $15,000 to pay for final funeral expenses if this is done in an irrevocable burial trust. I set these up for people at no cost.
Medicaid also allows you to set these irrevocable trusts up for the final funeral expenses for each of your children and their spouses in addition to the one set up for you. This allows you to leave funds to family instead of spending it all on the costs of long-term care.
Few people know of these Medicaid rules and then leave nothing but the funeral bill for their children.
You have some savings in the bank, earning very little interest. The irrevocable trusts also earn interest, cost nothing to open, and protect money from the Medicaid “spend down”. No need to spend money to open these, other than the amount you want to place in the trust.
At TheLongTermCareGuy.com, we help people deal with the costs of long-term care. We also offer alternatives to help those planning ahead to pay for long term so they don’t have to spend their assets down to impoverishment. There is no charge to meet and explore options. Call us at (920) 884-3030 to schedule a free consultation.