Baby Boomers and Long-Term Healthcare

The Lake Oconee Boomers Team

Updated on:

By Florence Cino

Baby Boomers are in an interesting and precarious position that is unprecedented in modern history. Many people from the baby boomer generation, also called “The Sandwich Generation,” are simultaneously navigating long-term care for elderly parents and a spouse. This is especially true for the younger faction of baby boomers who are currently in their late fifties and sixties. Although, longer lifespans coupled with a rise in chronic illnesses, have some boomers in their early seventies also facing this double-edged conundrum. 

Unfortunately, not everyone can be cared for at home until the end of their life. When the need for a long-term care facility is warranted, it is best to be prepared rather than waiting for the last minute. There are many things for Baby Boomers to consider as elderly parents or spouses need long-term care. If a parent or spouse requires a nursing home and needs Medicaid assistance, when the parent or spouse dies, Medicaid can initiate an estate recovery to recoup from the estate the benefits paid out of pocket on the recipient’s behalf. There are measures that can be taken to ensure that the surviving spouse and or children will not lose the family home.

A Life Estate can be established whereby the adult child or children of an elderly parent form a joint ownership of the home, along with the parent or parents. The parent/parents will own the property for the rest of their life and be responsible for all costs to maintain the home. When both parents pass away, the ownership will pass on to the other parties in the Life Estate. A Life Estate arrangement requires that a deed be changed to include the child or children, or other beneficiaries. Once the estate passes to the child/children or other beneficiaries, the state cannot recover any Medicaid expenses that the life estate holder has incurred.

Another way to protect assets when long-term care is needed is by creating a Living Trust. This Trust will protect the parent or parents from scams and theft. This arrangement also relieves them from managing their assets. This type of trust will eliminate probate and inheritance taxes that will be required through a will. The parents will create a Testamentary Trust and the trustees, children, spouse, will make financial decisions on the parents’ behalf to prevent theft or fraud.

An Irrevocable Living Trust can be set up when a parent may need to apply for Medicaid. This trust allows them to qualify for Medicaid without having to dispose of their assets which will protect their beneficiaries.

With a Revocable Living Trust, the grantor can revoke at any time without permission from the beneficiary. The grantor retains control of their assets. A trustee may be appointed to dispose of the trust’s assets if the grantor dies or becomes incapacitated.

These are just a few examples of pre-planning that can be considered to protect a parents’ assets. An estate attorney can guide you as to which type of trust will be best for your family.

Spouses fall into a different category, when a spouse requires long-term care through Medicaid.  Under the Medicaid Spousal Protection Act, a spouse will not lose their income when their spouse is going into a long-term care facility or getting in-home long-term care. If there is a financial hardship for a spouse that is remaining at home, they may be able receive a portion of their spouses’ income while they are in the nursing home. This rule may vary from state to state. 

The spouse that is not moving to a nursing home is entitled to keep the home, regardless of the equity value of that home. The best way to keep this equity value is to have the title of the home put solely in their name. This will not be a Medicaid violation and will not be affected by the Medicaid five year look back period rule.

A Medicaid Planner can offer a wide variety of assistance from assisting with the completion of paperwork to restructuring finances to ensure eligibility for the spouse that needs long term care. They also assist with the completion of tedious paperwork that must be filed for Medicaid benefits. An Attorney will explain and guide you as to which type of trust will best serve the needs of your estate while navigating the estate laws in your region.

Anecdotally, in interviewing a woman who had to navigate her aging father through the Medicaid system in New York City, the father’s health declined to a point where he needed assistance in his daily life and required home healthcare services. The Medicaid spenddown that he had to pay monthly to the MLTC left him with virtually no money after he paid his rent and household bills, and he quickly went through his savings. His daughters sought the advice from an attorney and were directed to NYSARC Trust Services. By joining this protected, irrevocable trust, it gave him the additional funds for food and necessities without the worry of not being able to make ends meet. This trust allowed him to stay in his home as he aged.  

Florence Cino is an RN, a twenty-two year veteran in the nursing industry and Director of Client Services for New York Home Healthcare Agency, Edison Home Health Care.