Here is a difficult, but familiar scenario: A husband or wife has an immediate need for a nursing home. They are financially unprepared and have no one to guide them on their options when a loved one needs long-term care. Too often they believe they have no choice but to sell their largest asset, their home, to pay for that care. When potential clients in this situation call me, the first thing I ask is whether they have consulted an elder law attorney.
Too often, the answer is no. Studies show that 55 percent of Americans die without a will or an estate plan, according to the American Bar Association.
An experienced agent should immediately let you know that an elder law attorney could be the key to protecting your family's health and financial well being, including the assets such as the family home you worked so hard for.
"People have options under the law, and in most cases do not have to sell their home to finance the emergency need for long-term care," said Sharna Favuzza, a lawyer at the Boston firm DeMoura|Smith.
Many times, a couple's money is tied up in their house, so to fund the long-term care, they decide to sell their home. They do so, and in order to qualify for Medicaid, a government benefit that will cover the cost of long-term care, they exhaust the proceeds of the sale along with the rest of their money. The healthy spouse, who can still live independently, is now left with no financial security, potentially compromising his or her health as well.
"Placing your home or money in a trust, or transferring the deed to a child, might not be the best option either," Favuzza said. "Before they take any steps, it's advantageous to explore the options that would best meet their family's needs. In many situations, the long-term care can be paid while still keeping the healthy spouse comfortable at home. Even in crisis, after one has entered a nursing home, we can sometimes help, but that's not the ideal situation."
The key here is to plan ahead. "Hoping for the best is not a plan," Favuzza said. "An elder law attorney will help you plan for the future to ensure that your wishes, importantly with regards to housing and health care, are able to be fulfilled. One of the benefits of proactive planning is to provide the family with choices, particularly while both spouses are still competent to make his or her own choices."
I have seen the benefit firsthand. The couple was in their late 80s, and the husband needed nursing home care immediately. They owned a home, and they had about $200,000 in the bank. Favuzza was able to help the wife stay in the family home, as well as preserve most of the remaining assets to keep her comfortable, while helping the husband receive Medicaid benefits.
Preplanning can leave your family with peace of mind. An experienced elder law attorney can offer guidance no matter what stage of life you are in or how much money you have. Do not be forced to sell your family home in a panic. A good realtor faced with this situation will recommend that you work with an elder attorney to save the home. Take that advice and feel better that you have planned ahead.
You can find more information about estate planning, wills, and elder law at the American Bar Association's website, www.americanbar.org.