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My husband will go into a nursing home in a few years — is it immoral to put our assets into a trust ASAP?

Updated: 24-10-2024, 04.30 PM

Although aging is a blessing, it can bring about some challenges. A loved one of yours may reach the point where they need long-term care, whether in the form of a home health aide, an assisted living facility, or a nursing home, and it’s essential to plan and prepare for it.

A study by Urban Institute for the U.S. Department of Health and Human Services (HHS) found that 70% of adults who survive to age 65 develop a severe need for long-term services and support before they die. And unfortunately, the costs involved can be catastrophic.

In 2023, the monthly median cost to have a home health aide was $6,292, according to Genworth. The monthly median costs to stay at an assisted living facility and a private room at a nursing home were $5,350 and $9,733, respectively.

Seeing as how the median retirement savings account balance of Americans ages 65 to 74 was just $200,000 as of 2022, according to the Federal Reserve, it’s clear that the typical senior can’t afford these expenses. The problem, though, is that Medicare won’t pay for long-term care, and many people can’t afford separate insurance to help pick up the tab.

If you have a loved one who needs long-term care, you may have a choice – place their assets into a trust to qualify for Medicaid, which commonly pays for long-term care, or deplete their assets by paying for long-term care only to potentially have them wind up getting government assistance anyway. When you think about it that way, the decision to opt for a trust is a pretty easy one to make.

It’s a big myth that Medicare enrollees are entitled to coverage for long-term care. Medicare will only pay for care that’s medical in nature. If you have surgery and need to recover for a few weeks in a skilled nursing facility, that’s covered under Medicare Part A.

But long-term care is often not medical in nature, but rather, custodial – meaning, pertaining to everyday activities. And while Medicare will pay for you to recover from an injury or have and recuperate from surgery, it won’t pay for someone to help you with everyday living (things like bathing, dressing, and cooking) not related to a medical issue. (And no, aging is not considered a medical issue.)

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