Protecting Elderly Parents’ Assets: A Comprehensive Guide

As your parent needs long-term care, you need to consider protecting your elderly parents’ assets. While the majority of their finances will go to making sure they get the care that they need, not every instance is covered under Medicare, and Medicaid needs qualifying circumstances in order to be eligible.

You may have concerns over the security of your parents’ home as this is no doubt their largest asset. Whether you parent is having a long-term care in their home, through a nursing home facility, or as part of the community, their home as long it is modest in value is protected in most instances and will not be taken from them in the event their finances run out to pay for their care.

We Will cover in this article

Coverage For Long-Term Care

Staying in a nursing home can take a significant portion of your parent’s income with estimates placing this on average from $70,000 to $170,000 a year, depending on the needs of your parents and their medical requirements.

The average stay in a nursing home is approximately two and a half years, but there is no way to predict the amount of time or care your parent will need and costs certainly could escalate over this time period if their health deteriorates. Having a Power of Attorney will also help you at the moment you have to decide for them.

Medicare does provide some coverage for long-term care, but it will not pay for its entirety, requiring your parent to pay the remaining costs. Other insurance policies may not have long-term care coverage, and you need to protect your elderly parents’ assets as a result.

If your parent would need to be placed in a nursing home, they would need to come up with the balance of what their Medicare coverage doesn’t cover for their stay until their income and assets are nominal and allow for eligibility for Medicaid.

Medicaid offers more coverage for long-term care services and can help your parents with the additional burden of paying for these services. But, there are qualifying requirements that need to be met and your parents’ finances need to be used until they reach a point that is considered low-income.

Protecting Elderly Parents’ Assets – Can Medicaid Take Your House?

When your parent is on Medicaid, there doesn’t need to be fear regarding protecting your elderly parents’ assets as their home will be secure. Medicare looks at seniors in nursing homes ability to transfer again back their home. While this may not be the case for your parent now or anytime soon, Medicare leaves it as a probability and allows the home to be preserved as long as it is modest in its value and would serve the needs of your parent.

While there are limits to the home value that can be retained, in most instances your parents’ home will be safe, and Medicaid will not go after the residence for payment of the long-term care services at a nursing home.

Essentially the way that Medicaid works is that your parent would have to spend down their savings and liquidate their assets to pay for their nursing home care. At the time that these benefits reach the accepted limit, your parent would then qualify for Medicaid which would then cover the costs of long-term care in a nursing home.

Can A Nursing Home Take Your Home?

Nursing homes work the same way whether your parent is covered by Medicaid or not. They do expect payment through your parents’ savings for the amount of the nursing home services that are not covered by Medicare until they become eligible for Medicaid and this government insurance coverage kicks in.

You will be able to protect your elderly parents’ assets in most respects, and certainly, when it comes to their home as it will not be necessary to sell it to pay for a nursing home stay as once your parents’ savings is gone, Medicaid will cover the expenses.

Placing your parent in a nursing home can be a difficult decision, but you don’t have to worry about the family home being liquidated as a result of their long-term care stay. Medicaid will help cover the expenses and burden of paying for long-term care in a nursing home once your parent becomes eligible. Check our article about Health Care Proxies for seniors as it can also help you a lot.