As your parents get older, you soon realize that there may come a day when they will need more help. You likely know that they may not be able to live on their own or in their own home forever. You want to prepare for that day and minimize the impact needing long-term care will have on their finances.
Yet, how do you do that? You have no idea where to start. Your first step should be to contact an Ohio estate planning attorney, so you understand the options for protecting assets through long-term care planning. Here are some of the areas you and your parents may discuss with an attorney as you begin the process:
- If your parents decide to purchase long-term care insurance, they may want to spread the cost of that over several years, to minimize the financial impact.
- If your parents want to eventually qualify for Medicaid, they may decide to maximize the amount of gift money they transfer to their children and beneficiaries sooner rather than later. Medicaid has a five-year lookback period. They can face penalties if they wait too long to gift their assets to their heirs.
- Your parents may decide to create an irrevocable or pour-over trust to help protect their assets from being seized to pay for nursing home costs.
- Your parents could transfer their liquid assets into an annuity. This annuity will be considered an income stream by Medicaid and not an asset.
- Even if your parents need care immediately, they can take certain measures to protect their assets from creditors and meet Medicaid’s spend-down requirements.
With an estate planning attorney’s help, you and your parents can ensure they don’t have to wipe out their assets if they need nursing home care in the future. Your parents can minimize the tax impact of passing on their assets and plan for Medicaid’s lookback period. With the right planning, you all can have peace of mind that they will receive the care they need and be able to pass on assets to their loved ones as they intended.