The last time I had to deal with it, “spending down” didn’t require selling your house. I seem to remember that if other people were using your car to drive you places, you didn’t have to sell the car, either. It’s been more than five years, so you should verify that.
Not that I’m saying a trust would be a bad idea.
I’m a bit hazy on the details, my nephew handled them all - but IIRC there was no requirement to sell the house (or car?) etc. Just that any sale of assets during the time in a home or the 5 years before would produce cash. Once an asset is converted to money, then the rules about disposition apply.
Not sure what happens if the home never sells - but keep in mind, if it is rented out, that is money accruing to the senior and then is counted in their assets/income. However, the no-sale rule is obviously applied to ensure you don’t end up in a situation where one spouse (or, say elderly sibling) is tossed out on the street because the other one has gone into a home. OTOH, a lot of assisted living (meaning not nursing homes) is private businesses and I’m not sure what the situation there would be - whether it becomes a debt like any other?
That’s what we did about 15 years ago. It was my mother’s idea. The house is owned by a family trust including the six children.
Yes, one of my relatives who recently died (before he needed a care home) did that in his will. His wife has the right to live there until she dies, but the house is in trust for his children. Of course, this guy was a sharp investor and the house and property (which he bought derelict for about $200,000 several decades ago) is worth several million and apparently pays the highest property taxes of any house in the town.
(Fun story - he grew up poor and made a fortune in real estate and stocks, so he did not have to work when he hit 50. He would do his own gardening on several acres. Once he was trying to tell the garbage service something and the guy asked who he was. He said “I own this place”, and the guy replies “No, you’re the gardener. We’ve seen you here.” Everyone else in the area had a hired gardening service.)
Nursing homes are private businesses, too, at least the vast majority are.
Yes, that seems to be the sad case in the USA. In some Canadian provinces, Nursing Homes can only be non-profits.
So would you rack up a bill that can be charged to your estate? Or does accepting Medicare payments mean that the home accepts that is the total amount they are charging the inmate?
Medicare (retired people) doesn’t usually cover nursing home care - that’s why people give away their assets to become eligible for Medicaid ( poor people). If the nursing home accepts Medicaid , then that’s the total amount the nursing home gets paid- but there is a wrinkle. In certain situations (and nursing homes for those over 55 is one of them) , the state agency that administers Medicaid will try to recover the cost of care from the person’s estate. Even if this involves placing a lien on a house. This is the reason why real estate is transferred as well as bank accounts - you don’t necessarily have to sell your house to get Medicaid coverage, but they will (again , in certain situations) place a lien so that when the house sold, they get reimbursed.
If I’m remembering correctly, Medicare will pay for a nursing home if the patient is receiving physical therapy and is expected to recover and go back home. It will also pay for hospice care. (Again, check to see if this has changed.) But if you’re not getting better and you’re not expected to die within six months, it won’t cover you.
That’s why I said “usually” - Medicare won’t cover custodial care*, which is the reason most people end up in nursing homes.
OK, sorry, from the Canadian perspective, I often confuse Medicare and Medicaid because up here it’s all one big happy package.
Yes, when my dad went in the hospital for an operation or infection, they would send him out to a nursing home / rehabilitation facility for recovery. As long as he was not yet back to the level he was at before he went in - i.e. recovering - Medi*care * paid for his stay in the home, IIRC. However, once he recovered or plateau’ed (“not going to get any better”) the government payment stopped.
My nephew said he was not eligible for Medicaid because his pension income was too large, but obviously it was nowhere near enough to cover his Nursing Home bill once he was required to pay his way.
Timing was important too. The legal hoops to jump through and the cost of lawyers required to sell the common domicile while my step-mother was alive but incapable of consenting was staggering. Once she died, they could proceed with the sale. However, there were then all these back-and-forth issues with in-ground oil tank, etc. (had to drill around it and take soil samples to prove it was not leaking…) He was using his HELOC to pay for the Nursing Home. However, the HELOC has to be renewed every 3 years or something, and he was going to have real problems, especially when the bank would discover the house was not inhabited - and there goes the insurance coverage too. They sold the house just in time.
But then, between the remaining equity and his pension income, he would have been able to pay for care for maybe 2.5 to 3 years. I’m sure there are plenty of people that have been in homes for more than 3 years. Then he would have been able to cover maybe half the rate at most.