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The “Wait and See” Approach can Result in
Ruinous Health Care Expenses

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2. Be clear on the downside. Understandably, no one likes to think about the prospect of suffering from a medical condition that sets off a prolonged decline physically, emotionally and financially, or that might strike a loved one. So instead of taking steps to prepare for potential problems in the future, most people delay or take no action at all. The consequence of this "wait and see" approach is often tragic.

Be aware of what can happen Without good planning. lf long-term care is needed and you have money, income, property or other economic resources, Medicaid will insist you use them up before it pays any benefits. This is sometimes referred to as the "spend down." If you own your home, Medicaid may be entitled to enforce a lien against it after you move out equal to the cost of the benefits it provided. The end result is already predetermined: you'll eventually be almost penniless, and in poverty.

Here's an example of what can be accomplished, in a case Lamson & Cutner handled for an elderly couple with a significant net worth. Their assets and financial reserves were worth hundreds of thousands of dollars, and the husband, who was approaching 90 years of age, needed nursing facility care. We arranged for the transfer of several properties to his wife, along with other liquid assets. We then filed a Medicaid application for nursing home services. The planning steps we'd first taken allowed our client to qualify, and he was approved.

The outcome is that his care is now fully paid for by Medicaid, his wife's financial needs are provided for, and the cash and holdings they'd invested a lifetime of effort in building could, with additional planning, be secured. We then did estate planning for his wife to protect the assets in her possession, so that regardless of what the future may bring in terms of her own medical and health needs, she is in the strongest possible financial position. (ln most cases, further planning should be done to protect the assets in the hands of the well spouse.)

This couple won't lose what they'd worked for through ruinous health care expenses. The well spouse also has the financial ability to make her husband's stay at the nursing home as pleasant as possible.

Table of Contents

25 Strategies to Prevent Financial Ruin
from Long-Term Health Care Costs

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