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The Fear of Long-Term Care & Losing Your Home

The cost of nursing home care is approaching $5,000 per month in most facilities. In some, it is in excess of $7,000 per month. How many of us have estates that can withstand this cost without the loss of a lifetime's savings? We have worked with literally hundreds of individuals and families facing this issue.

Perhaps there is a diagnosis of dementia of the Alzheimer's type. With it comes the relentless fear of nursing home placement, if not the reality.

There may be a diagnosis of Parkinson's Disease or another debilitating condition that can compromise mental capacity and the ability to function physically. Here, too, there is the fear and often the reality of needing nursing home care.

A debilitating stroke, broken bone, or a host of other medical problems can result in nursing home care. In virtually every case, we can do something about this. We can protect the estate.

While Medicare provides no real assistance to individuals facing this problem, Medi-Cal can pay all or a portion of the cost of nursing home care. Indeed, it is the source of last resort, the last hope.

To qualify for the program, an individual or a couple need not be impoverished. Rather, it is a matter of complying with legal requirements and having assets either in the right form or transferring them in a manner that is consistent with law.

When we accept responsibility for asset preservation in this context, there are two other issues that are devastatingly important. They go well beyond the issue of qualifying for Medi-Cal.

One is the "estate claim" that can be asserted by the State of California at the time of an individual's death. Simply stated, the state wants to be reimbursed for dollars it spent caring for an individual who was 55 years of age or over and who received Medi-Cal benefits. Here, too, proper legal planning can help you avoid this claim.

The second and closely related issue is tax. There are many and powerful tax issues - gift tax, capital gains tax, and estate tax - that must be taken into account. We have seen "Medi-Cal plans" save $50,000 for a family in the context of nursing home bills and then lose $80,000 in capital gains taxes because tax issues were virtually ignored. Needless to say, we do not ignore these issues.

Aging can be a time of wonderment and fulfilled dreams. It can also bring medical problems that simply must be addressed. Our job, for you, is to see to it that you receive the best quality care and that your family's assets are protected to the greatest extent possible. We believe that these objectives can be harmonized.

As a final note, tell other family members, friends, and neighbors that they need not simply become resigned and depressed and watch their estate, the product of a lifetime's labors, go out the window because of health problems. Tell them to give us a call so that we can give them proper information and advice.

Note: This article provides information, it does not constitute legal advice. 

Gilfix & La Poll Associates LLP attorneys practice elder law and estate planning and are available to answer any questions about Trusts, Durable Powers of Attorney for asset management, Advance Health Care Directives, and any other appropriate planning options.