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How to protect your assets if your spouse goes into a nursing home

Written by Eric Ebbert CFP®, MBA

On October 5, 2021

According to a report at rand.org in 2017, persons aged 57 to 61 have a 56% chance of spending at least one night in a nursing home during their lifetime. Obviously, many spend much more. Facing the decision to admit your spouse to a nursing home is never easy. Perhaps, you are planning for the future and trying to determine how much you should set aside for long-term care. Regardless, if you are planning for the future or faced with admitting your spouse to a nursing home, you should be prepared financially

What is an asset?

You have assets. According to Investopedia, an asset is anything of value that can be converted to cash. Examples of assets include:

  • Home.
  • Owned property. 
  • Rental houses.
  • Commercial property.
  • Cars.
  • Artwork.
  • Savings and checking accounts.
  • Valuable jewelry or trinkets.

Depending on where you are in your life journey, you may have significant assets. Regardless of the size of your assets, you should understand how to protect your finances if your spouse has to go to a nursing home. 

How to protect your assets

Thirty percent of nursing home residents reside in a facility for up to three years while 12% are institutionalized for up to five years, according to the American Association for Long-Term Care Insurance. If you are not prepared, you may find that your finances will take a pretty hefty hit. It is important to talk with an elder care attorney as the rules from state to state vary greatly.

Here are some general things you should know about to help you protect your assets if your spouse is admitted to a nursing home:

  • Long-term care insurance — This is protection that you can purchase that covers long-term care, including nursing homes, assisted living facilities, adult day cares or home health care for those who live with chronic illnesses or conditions.
  • Irrevocable trust — This essentially transfers all asset ownership to the trust, legally removing all ownership rights. It is important to note that this cannot be changed or terminated without the permission of the grantor’s beneficiaries. 
  • Medicaid-compliant annuity — In order to qualify for Medicaid, you must meet the government’s financial eligibility requirements. In some cases, a Medicaid-compliant annuity can help you reduce your income to qualify for assistance. 

Talk to a ProVise CFP® professional about how nursing home care can affect your retirement planning

At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.

Are you ready to talk to a professional about setting up a retirement plan that helps protect your assets from nursing homes? Contact ProVise today to schedule a complimentary consultation.

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