PLANNING FOR WEALTH & SECURITY
By attorneys Jennifer & Jeff Hawkins
 
October 1 Deadline for Landowner Nursing Home Planning

This column has focused a great deal in the last few months on changes that the Indiana legislature established earlier this year concerning long-term care ( see May, June, and July, 2009, under Articles at www.hawkinslaw.com ). For those readers who missed those articles, Congress passed legislation in 2006 that requires states to penalize people more harshly for transferring assets to their family members before seeking Medicaid assistance. The Indiana legislature finally passed legislation that adopts the Federal law in April of this year, but delayed the start of that law until October 1, 2009. Recent communications from Indiana’s Family and Social Services Administration express that the agency may not begin enforcing the new law until after October 1, 2009.

Long-term care costs for room and board in a nursing home can run as high as $6,000 or $7,000 per month in some Wabash Valley facilities. At an annual cost between $60,000 and $90,000, very few people can afford to pay for such long-term care before exhausting their funds. No one looks forward to nursing home residency, but advance planning to protect resources from such costs is important for those people who lack sufficient resources to pay the bills in cash.

Landowners can transfer partial ownership of their land to family members before October 1, 2009, and lock in treatment under the more favorable existing Medicaid laws. As word of the October 1 deadline spreads, many landowners are thinking about how to protect farmland and other valuable property from long-term care costs by transferring it to specially constructed trusts. The transfers are usually organized so that the landowner still receives all of the income benefits from the land and can continue to reside in residences that are situated on the land for the rest of the landowner’s life, but the long-term ownership of the land is protected so that the land will not have to be sold to pay for long-term care expenses.

It takes some time to set up real estate transfers properly so that land can be protected. Landowners who want to protect their land should speak to a qualified elder law attorney in plenty of time before October 1, 2009. Elder law attorneys will undoubtedly be extremely busy during the months of August and September, 2009, so it will be important for people to make appointments with their lawyers as soon as possible to beat the rush. More than usual, snoozing before October 1 can lead to a lot of losing.

THIS ARTICLE IS NOT LEGAL ADVICE. ALWAYS CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.

© 2009 by HAWKINS LAW PC, Estate, Trust & Business Attorneys. All rights reserved.