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How to Stay Out of a Nursing Home

A recent study of long term care shows that the percentage of elderly Americans living in nursing homes is on the decline.  This appears to be in part because of improved health and partly because of more choices.  According to census statistics, 7.4% of Americans 75 and older lived in nursing homes in 2006, down from 8.1% in 2000 and 10.2% in 1990.  At home care and assisted living facilities, on the other hand, have been growing.  Of the 85 and older group, fewer than 16% are now living in nursing homes, down from 21% 20 years ago.

As the oldest of the 79 million baby boomers turn 62 this year the long term care system is going to be overwhelmed in the next 20 years.  Nursing homes will always be a necessary and important part of that system but if given a choice most people would prefer in home or assisted living care as an alternative.  The numbers bear that out. 

But what most people don’t realize is that unless you have enough money to cover the cost of nursing home level care out of income then you run the risk of running out of money.  So, here’s what happens.  You spend your money and when it is all gone you’ll get government benefits.  If you want that care at home or in an assisted living facility, however, government benefits will not pay for the entire cost.  You’ll need to pay for the part that the government benefits won’t cover.  But, of course, you don’t have the money because you spent it all in order to qualify for the benefit program.  A classic Catch 22.  The only place where the government benefits will pay for 100% of your care is in a nursing home.

So, how can you avoid this dilemma?  By planning ahead and moving your assets, out of your name, to a trust for your benefit.  This way your assets are available to pay for some of your care at home or in an assisted living facility but you can qualify for whatever government benefits are available and you are able to stay out of the nursing home.  But you can’t wait until you need the care because transferring assets may cause you to be ineligible for government benefits. So you have to do it well in advance of when you might need the care.

Who can help you put this type of plan in place?  A qualified elder law attorney.  If done properly you are actually maintaining control of your future, exactly at a time when most people who didn’t plan ahead lose control because their health no longer allows them to manage their own affairs and they haven’t set down a plan of action.  And as you can see, the system drives you into a nursing home, unless you plan for the alternatives.