Co-authored by Joanna C. Feldman
Let’s consider the cost of care versus the legal fees to implement proper planning.
So often, when I ask clients about their assets, they respond “I have nothing”, yet they own a house. For some reason, it seems to be common that where there are little cash assets, there is a perception that one has no assets. Your house could be your largest asset and it should not be ignored simply because it is illiquid.
If you require nursing home care one day, the costs of care could exceed $15,000.00 per month. While you may be eligible for Medicaid depending on your other assets, Medicaid can place a lien against your house to recover any benefits paid on your behalf. If you do no planning, you stand to lose all the equity in your house if you are in a nursing home for an extended stay. This becomes even more profound if your spouse requires care as well.
A Medicaid Trust may be used to protect your house from a Medicaid recovery claim or lien. The one-time legal fees for Medicaid planning typically range between $3,000.00 – $6,000.00. If you are a numbers person, that is approximately 1% of the value of your house. Considering the potential loss under a do-nothing scenario, it absolutely makes good sense to work with an attorney to implement your planning. Don’t be penny wise and dollar foolish.