Do you want to protect your property from being sold to pay Nursing Home Expenses?
- Attorney Gonsalves
- 2 days ago
- 7 min read
Protect your children’s future inheritance and secure protection today
We are only humans. We all get sick. We all die.
Protect Yourself. Take Action.
You have worked effortlessly to acquire and maintain the assets you have obtained throughout the course of your life.
In most cases, individuals do not work their entire life intending for their assets to be sold off to pay nursing home expenses. The unfortunate reality is that numerous individuals find themselves in a situation where family members are divested of an inheritance because the assets were sold to pay for nursing home expenses – such circumstances are preventable.
Our firm offers estate planning services tailored to your specific needs and designed to safeguard your assets from being sold-off to pay for nursing home expenses. You can protect your assets and secure your families interest in them through preventative planning. Pick up the phone and call me to discuss what I can do to help secure your interests and protect your children’s inheritance from being diminished by the nursing home.
My Personal Experience
I understand the extent to which an individual’s assets can be diminished because I was the Attorney representing nursing homes and ensuring payment of outstanding patient medical debt through targeting and diminishing the patient’s assets.
I was the individual in the Probate and Family Court petitioning for the formal probate of a deceased person’s estate, seeking the appointment of a personal representative, and petitioning the court to sell real estate owned by the deceased for the purpose of satisfying the outstanding debt owed to the nursing facility.
I have seen first-hand the look on the deceased’s children faces when the judge appoints the personal representative and grants my client’s petition to sell their childhood home. It’s a sensitive topic to discuss and heartbreaking to witness, but we all have a job that needs to be done. Even if the nursing home is not the petitioner, MassHealth can recover payments made through a process called Estate Recovery.
Presently, I have dedicated myself to ensuring that appropriate safeguards and protections are in place to guard future individuals from the crushing blow to find out that, in some cases, most, if not all, of the inheritance they would have received has been liquidated to pay the nursing home for the services they provided while their loved one was alive.
Due to my experience representing nursing homes around Massachusetts, I am the best person to speak to about implementing a strategic plan designed to protect your assets and your loved one’s future interests.
Nursing Homes are Expensive
Nursing Homes are for-profit businesses and, like any other, expect to be paid for the skilled medical care, services, and room and board that have been provided.
Usually, an individual admitted to a nursing home starts off as a “private-pay” patient. Private-pay means that the patient is paying out-of-pocket for the expenses associated with their stay in the nursing home. However, nursing homes are expensive and liquid funds (e.g., Cash in bank) is likely to run out quickly. The core question becomes: What happens if I do not have enough money to pay the nursing home?
Massachusetts offers a state Medicaid program known as “MassHealth.” MassHealth is designed to assist qualifying individuals that meet strict eligibility requirements. Relevant here, MassHealth provides coverage for individuals that require long-term care – including nursing homes and in-home services.
MassHealth becomes an option when a patient runs out of private, out-of-pocket, liquid funds to cover the expenses associated with their nursing home residency. Nursing Homes that are designated as the representative payee can cover the costs associated with the patients stay by receiving payments through the state program (e.g., MassHealth). Sounds good so far, right?
Unfortunately, MassHealth has strict eligibility requirements for applicants seeking to utilize this public benefit. Importantly, MassHealth’s eligibility for the program requires that the applicant has no more than $2,000 in assets. MassHealth considers countable assets as cash, savings accounts, stocks, bonds, and other resources that can be converted to cash. Put another way – you are not eligible for MassHealth if you have more than $2,000 in assets.
The Five-Year Look-Back Period
In addition to the $2,000 asset cap, MassHealth applies a 5-year look-back period to detect any asset transfers made before applying for benefits.
The 5-year look-back rule prevents applicants from giving away or selling assets below market value for the purpose of qualifying for MassHealth. If MassHealth finds transfers during this period, it imposes a penalty period during which the applicant is ineligible for benefits.
For example, if the applicant transfers $25,000 to a family member two years before applying for MassHealth, the program will calculate the penalty period based on the amount transferred. During this time, the applicant is responsible for paying the nursing home out-of-pocket.
The look-back rule encourages careful planning well in advance of needing MassHealth, as transfers made within five years can affect eligibility.
Nursing Homes’ Ability to Recover Costs After Death
The Nursing Home can seek repayment for unpaid bills - even after the MassHealth recipient passes away – through a process called Estate Recovery. This means the nursing home can place a claim against the deceased person’s estate to recover costs paid by MassHealth.
As stated previously, estate recovery typically targets assets such as the home or other property owned by the deceased. The effect of this has the potential of substantially reducing or, in some circumstances, completely eliminating the inheritance left to the deceased’s heirs. The goal is to recoup funds spent on long-term care, but it can come as a surprise to families who were not prepared.
Protect Yourself, Your Loved Ones, and Your Assets
Here is the good news: This is completely preventable through proper estate planning. Estate planning offers tools to help protect your assets from estate recovery and preserve your legacy. However, you are the only one that can initiate the process – it is up to you.
Compare the following examples and outcomes:
1. EXAMPLE #1
MEET JANE
Jane is a widower with two adult children. Jane owns a modest home valued at $475,000 and she has approximately $85,000 in savings. Aside from her house and savings, Jane has no other significant assets. Jane never engaged in estate planning because she trusts that her children would fairly “handle things” when the time came.
At the age of 92, Jane suffers a serious stroke and can no longer live independently. Jane’s children cannot leave their jobs or families to provide full-time care, so Jane is admitted to a nursing home to receive skilled medical treatment and supervision.
The nursing home costs $14,000 per month. Jane pays privately at first, depleting her savings within serval months. Once Jane’s savings are nearly exhausted, she applies for MassHealth to cover the cost of her continued care. To qualify, Jane must meet the $2,000 asset limit, and although the home is treated as a non-countable asset during her lifetime, it remains titled solely in her name.
MassHealth approves Jane’s application and begins paying the nursing home bill. Over the next three years, MassHealth covers approximately $420,000 in nursing home expenses on Jane’s behalf.
When Jane passes away, she still owns her home. Jane’s children initially assume their childhood house will pass to them as their inheritance. However, after her death, MassHealth asserts a claim against Jane’s estate through estate recovery to recoup the funds it paid for her nursing home care.
Since Jane’s home is the primary asset of the estate, the estate is forced to sell it. The house sells for $475,000. From the sale proceeds:
· Outstanding legal and administrative costs of the estate are paid
· MassHealth’s estate recovery claim of $420,000 is satisfied
After these payments, only a small balance remains – far less than the value Jane intended her children to receive.
Instead of inheriting the family home or meaningful financial support, Jane’s children receive little or nothing. The asset that Jane and her husband worked a lifetime to build is liquidated, not for the family’s benefit, but to reimburse the cost of her long-term care.
This outcome was entirely avoidable. With proper estate planning performed well before nursing home care was needed, Jane could have preserved her home and savings for her children while still qualifying for MassHealth.
(Compare)
2. EXAMPLE #2
MEET JOHN
John owns a home and has $100,000 in savings. John anticipates that he may eventually require nursing home care in the future and wants to qualify for MassHealth without losing his home or savings. John went to an elder law attorney for assistance. The Elder Law attorney assisted John with creating a strategic plan through specific devices and transferring assets into a trust.
By working with an elder law attorney, John transfers his savings into an irrevocable trust five years before applying for MassHealth. He also creates a life estate for his home, allowing him to live there while protecting it from estate recovery. When John eventually applies for MassHealth, his assets fall below the $2,000 limit, and he qualifies for benefits without risking his legacy.
Discussion of Examples
Clearly the results ended differently for Jane and John. But why?
The Results: Whereas Jane’s children were substantially divested from inheriting the property their parents worked a lifetime for, John’s children were able to inherit the property that their father intended to devise to them.
The Difference: John strategically engaged in estate planning. Jane did not.
The Wake-up Call: The outcome in Jane’s case was entirely avoidable.
With proper estate planning performed well before nursing home care was needed—such as transferring assets into an irrevocable trust—Jane could have preserved his home and savings for his children while still qualifying for MassHealth.
Final Thoughts
You have worked effortlessly your entire life to acquire and maintain the assets you have obtained throughout the course of your life – protect it.
Our firm offers strategic estate planning services tailored to your specific needs and designed to safeguard your assets from being sold off to pay for nursing home expenses. You can protect your assets and secure your families interest in them through preventative planning. The choice is yours and nobody can make it for you.
Pick up the phone and call me to discuss what I can do to help you to avoid being Jane.
