Few of my clients want to retire to a nursing home. I personally love nursing homes, and I would probably move into one today if I was allowed and could afford it. Ideally, I would have my own room with a separate entrance, an extra refrigerator and a barbecue grill outside.
Despite most people’s aversion to moving from home, the need for long-term care is a reality that many of us will face someday. Most of us have invested our entire lives scrimping and saving. Then, one day, we find ourselves needing long-term care at some facility. Without preparation, long-term care costs can consume the generational wealth of entire families.
There are many tools available to help people ensure that they have a financial legacy to pass on to their children, even if years or decades of long-term care is needed.
Some people prepare financially at least five years before they anticipate needing long-term care. Unfortunately, that financial planning typically involves giving up complete control or ownership of assets. And, most of us cannot foretell the future to know if or when we may need long-term care.
For those of us who find ourselves on the brink of imminent or current nursing home or assisted living residency, there are a variety of tools that can ensure that at least some assets are passed on to kids and grandkids. Those tools can include specialized trusts, specialized annuities, promissory notes and cancellations of promissory notes, caregiver agreements and some intentional triggering of certain penalties.
The intertangled web of tools are almost impossible to effectively use without an experienced attorney. Most people do hire attorneys to assist in that process.
Notably, the complexity of Medicaid eligibility becomes exponentially more intense for married couples. Fortunately, the additional complexity of Medicaid for married people means that there are sometimes more tools for married people to use to protect assets. Those tools are especially necessary for married couples because of the financial responsibility that the law places on spouses to help pay for each other’s long-term care.
In today’s world of blended families, more and more married couples want to ensure that family assets are inherited by biological or adopted children and not by stepchildren. In such instances, couples may have prenuptial agreements, use separate trusts, separately titled assets or engage in all the above.
In Ohio, regardless of prenuptial agreements or separately titled property, each married person can and usually does have some financial responsibility for the long-term medical care of that person’s spouse. If a spouse refuses to satisfy that financial obligation, the Ohio Attorney General can pursue the spouse to recover the financial responsibility that the spouse refused to pay.
Stated simply, protecting family financial legacies while receiving Medicaid is complex. It is even more complex for married people. Regardless of financial independence from each other, married people have certain financial obligations for spousal long-term care. Therefore, married couples should always engage in long-term care planning in conjunction with each other.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.