The Baby Boomer generation, well-known for their ballooning birth rates in the postwar period, is now entering the stage of life where they may need care and assistance as they age. Many are moving into nursing homes and assisted living centers. Others are utilizing the benefits of in-home care. However, it is clear that this generation is facing the high cost of growing older in the United States.
These costs may be even higher than some people realize. For example, in most parts of New York, it will cost over $150,000 a year for someone to stay in a nursing home. Like everything else, this care has been growing more expensive over the years. The above is just the average, of course, so the specific rate will be different from one home to the next. But it is clear that living in a nursing home – even for just a few years – comes with very high costs. And that doesn’t even count all the other costs of aging – prescription medications, doctor visits, medical care and much more.
Why Medicaid planning is important
While planning for their future, elderly individuals are often focused on the preservation of assets. They have been gathering assets and saving money for decades, and they don’t want all of this to be depleted at the very end of their life. They want to make sure that they save assets to pass on to the next generation.
With Medicaid benefits, there is an income and assets test. There are many different areas to consider, such as exempt and nonexempt assets, the transfer of assets between family members, limitations to current income – such as when someone can no longer work because of the care that they need – and the potential income from that person’s spouse.
Planning in advance can help people find out how to transfer assets to their heirs, how to limit tax liabilities on their estate, how to utilize any existing sources of assistance and how to balance this focus on asset preservation with actually obtaining the medical care that the person needs. It can be a delicate balance, and that’s why it’s so important for those involved in this process to carefully consider all of the legal options at their disposal.