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Estate and Asset Protection Planning
David A. Schweizer, Esquire

The data suggests that more than half of the population will require nursing home care at some point during their lifetime. Because of this reality, and because each successive generation has accumulated more assets, a need has developed for professional advice for those who wish to protect their assets from the overwhelming costs of nursing home care and unreimbursed medical expenses.

Last year the Commonwealth of Pennsylvania estimated that the average nursing home cost was $6,200.00 per month, or approximately $75,000.00 per year. These costs are projected by experts to increase at a rate of five percent per year, which means that in about five years nursing home costs will be approximately $100,000 per year. Very few families are in a position to afford this significant annual cost.

How are nursing home costs paid?

Medicare provides a maximum of 100 days of coverage during your lifetime.
Long-term care insurance is very expensive and has time and coverage limitations.
If you are single, if your medical condition satisfies the state standards, and you have expended all of your assets down to a $2,400.00 threshold, Medicaid will pay for your nursing home care.
If you are married, the community spouse that remains in the home is permitted to protect some of the marital assets and monthly income. It is important to note that Medicaid's determination of the amount of assets and income the community spouse may retain can be appealed by requesting a fair hearing.

Most people desire to pass some of their savings on to the next generations. By analyzing the Federal and state laws applicable to Medicaid, and with consideration of the family's liabilities, assets, annual income and expenses, and present family and medical circumstances, we can develop an asset protection plan to preserve some of the family's assets. The amount that can be protected depends on when we are contacted to provide advice. Ideally, this type of planning should be conducted while the family member is healthy.

Importantly, the Federal Government passed legislation in February 2006 that eliminates some of the safe havens previously used to protect family assets. Additionally, the look back period has been extended to a rigid, 5-year time frame. Therefore, planning in advance is now even more critical than it was before.

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