Commonly Asked Questions About Long-Term Care Planning in NC
We are approached by many people who have waited far too long to begin planning and burned through a large portion of assets paying for assisted living or in-home care. Read some of the most common questions we are asked that relate to the need for long-term care planning and the protections it can provide.
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Should I Include Medicaid Planning in My Long-Term Care Planning?
Medicaid planning is the art and science of working within the Medicaid laws and rules to preserve assets to improve the quality of life of the person receiving Medicaid benefits, the quality of life of that person’s spouse, and to improve the quality of life of the person’s loved ones. Medicaid planning is analogous to tax planning. Tax planning does not seek to evade paying taxes, it only seeks to minimize the amount of taxes owed through good pre-planning and taking advantage of the rules in the Internal Revenue Code. Medicaid planning works the same way.
Why do Medicaid planning? A true story illustrates its importance. Two adult daughters visited their mother in the Alzheimer’s unit of the local nursing home. This lovely elderly lady, who needed Medicaid to pay for her care, had hearing aids, the kind that are small and fit inside the ear. While the two daughters talked to her, the mother’s hearing aid fell out. Mom picked it up and held it in the palm of her hand for a moment, looking at it. Her daughters thought she was about to insert it back into her ear. Instead, with a quick movement, the mother popped the hearing aid into her mouth and started to chew. She thought it was a piece of candy! She chewed the hearing aid hard enough to destroy it, to crack the hearing aid’s battery case, and to chip and damage several teeth.
Who pays to replace the hearing aid? Who pays to repair her teeth? In many states, Medicaid will not pay for such things. Medicaid doesn’t pay for eyeglasses in many states or pays so rarely (one pair of glasses every five years) that it’s tantamount to not paying at all. Medicaid does not pay for clothes. If the Medicaid recipient wants a phone in her room, she pays for it herself. If she wants a television in her room, she pays. Medicaid only allows her to have a personal needs allowance, so small that it tantalizes by what it cannot pay, rather than for what it does pay. Medicaid planning sets funds aside to be used for the benefit of the person who needs help. Medicaid planning improves the quality of the person’s life.
Additional Information on North Carolina Medicaid Assistance for Nursing Home Care:
Download a free copy of Jackie Bedard’s book, The Ultimate Guide to Paying for Nursing Home Care in North Carolina, to learn the nursing home and Medicaid secrets you need to know to avoid going broke in a nursing home and leaving your family penniless.
What Is a Reverse Mortgage? How Can They Be Used to Pay For Long-Term Care?
A reverse mortgage is a non-recourse loan where the home is used as collateral to get tax-free cash from the equity of the home without incurring monthly expenses. With a reverse mortgage, the homeowner does not need an income to qualify. There are no income, credit, or health requirements, and there is no effect on Social Security or Medicare benefits.
Reverse mortgages guarantee that the homeowner can stay in the property for as long as he or she lives in the property as his or her principal residence and pays the property taxes and insurance and maintains the property in a reasonable condition, even if the outstanding loan and interest grow to exceed the property’s value. Reverse mortgage fees can be high, although fees are usually rolled into the loan and not paid up front. The costs associated with a reverse mortgage are very similar to those of a conventional loan.
A reverse mortgage can be a sound strategy to:
• Increase your income
• Pay unexpected expenses
• Pay off debts
• Make necessary changes to your home
• Make your home more accessible
• Help you get the home care services you need to remain independent
Reverse mortgages can be used for:
• Medical bills and prescription drugs
• Long-term health care
• Retirement and estate tax planning
• Daily living expenses
Another important consideration is that any remaining value on the home goes to the homeowner or his or her heirs when the house is sold. Home ownership is often a person’s most valuable asset. It is important to remember that getting a reverse mortgage is essentially the same as you withdrawing the money you would expect to leave to your heirs.
Free Caregiver’s Guide:
Solid legal and financial planning is critical for a loved one with long-term care needs. Download our free Caregiver’s Guide to learn the critical information you need to know about caring for your loved one.