The Colorado Medicaid Crisis…What Does it Mean for You?
Fifty percent of women and twenty-five percent of men will find themselves in a nursing home at some point in time during their lives. The cost of a Colorado nursing home averages around $5,500 per month and is climbing rapidly. Medicare (not Medicaid) will pay for only the first 20 days of nursing home care, so it can’t be relied on in a long-term care situation. It’s little wonder, then, that merely 2/3rds of nursing home families run out of money in the first year of the nursing home stay.
With the help of a skilled Colorado Medicaid attorney, you or a loved one can protect assets without spending down everything to the poverty levels prescribed by Medicaid. However, most people are completely unaware of their planning option.
In desperation, most people make terrible mistakes by doing things without the advice of Medicaid counsel, such as giving assets away to the children in hopes of qualifying for Medicaid. Such gifting will lead to Medicaid penalties, tax problems, delayed Medicaid eligibility and, of course, the complete loss of control over the assets given away.
Medicaid laws are complex, strictly enforced and continually changing. Making them work to your advantage requires the experience of an elder law attorney who focuses on his or her practice on Medicaid planning. If you or a loved one is facing a nursing home crisis, give us a call or request our FREE Guide to Colorado Medicaid. We can put you on the right path to protecting the home and savings before it’s too late!
How To Protect Your Assets from Colorado Nursing Homes BEFORE You Get Sick
The first line of defense for protecting your assets against Colorado nursing home costs is long-term care insurance. Unfortunately, the vast majority of Americans don’t buy it. They perceive it to be either too expensive or something that they will never need. Isn’t that the way all insurance goes? Folks that want to buy long-term care insurance often find they can’t because their health has gone south. That leaves them one viable planning option: gifting assets to the children or a Colorado trust.
While it’s true that you can give assets to your children to protect them from loss in the event you have to go to a nursing home later, it takes five years before your assets escape the scrutiny of Colorado Medicaid. However, the gift of assets to your children will cause multiple issues, including tax problems and the loss of control of your assets. Once you give your assets to your children, you can never get them back. If your children get sued, go through a divorce, run into debt problems or simply fail to honor your wishes, you will regret the decision of giving the assets away directly to your children.
An alternative is to give your assets away to an irrevocable trust rather than to your children. The irrevocable trust, called a Five Year Trust, will allow you to live in your home for the rest of your life, continue to receive the interest or dividends off of your savings and investments for the rest of your life and protect your assets throughout your lifetime from all of the things that can go wrong with your children as previously mentioned. Your Five Year Trust can be designed to transfer unspent assets at death down to your children and protect those assets for both your children and your grandchildren through the additional supplement called a Bulletproof Trust.
The Five Year Trust is an irrevocable living trust. It also avoids probate and adverse tax consequences connected with giving away assets. To be effective, it must be drafted with extreme care so that Colorado Medicaid will not consider it an available resource at some later time when you apply for Medicaid benefits. The counsel of an experienced elder law attorney is absolutely mandatory in this type of matter. If you have an interest in studying this option further, please give us a call at (303) 423-8423 and request our FREE white paper entitled “The Five Year Trust.”