Nursing Home Spend Down
Alzheimer’s. Stroke. Multiple Sclerosis. Parkinson’s. Dementia. Later in life, the greatest threat to your family assets is an illness or disability that requires long-term care in a nursing home.
Nursing home care can cost $80,000 to $90,000 per year. In 25 years that cost is likely to double twice. By the time you need nursing home care, you can expect to pay around $250,000 per year!
Long-Term Care Insurance is one way to protect your assets. But what if you can’t get it for health reasons? Or if Long-Term Care Insurance is too expensive?
The Five Year Lockbox Trust may work for you
It works like this: First, you create, or convert, your existing revocable living trust into a Five Year Lockbox Trust. Then you place all of the assets you want to protect into the trust.
Once created and funded, the trust holds your assets and pays you all income those assets produce. The trust owns your home, but you still have the right to live there and to sell and buy a new home. You keep your social security and pension income. Because the Five Year Lockbox Trust is a trust, the person you name as trustee (usually a child or close family member) is obligated to protect and preserve those assets, so the risky strategy of giving the property away to your children with “no strings attached” is eliminated.
After your assets have been in the Five Year Lockbox Trust for five years, the trust assets are protected from the Nursing Home Spend Down and Medicaid will pay for nursing home care.
The Five Year Lockbox Trust also doubles as your Estate Plan. It contains provisions to name the person in charge if you are disabled and after you’re gone, and your assets pass to your family after you’re gone without the expense and delay of Probate.
If you’re out of money, you’re out of options. The Five Year Lockbox Trust may be the solution you need to protect your dignity late in life.