Long term care planning may involve the use of irrevocable trusts. Why are these trusts useful vehicles to protect your assets? Irrevocable trusts take the assets out of your name and control, which can protect them from being exposed to paying for your long term care.
Modern medicine has made it possible for many Pennsylvanians to live full, productive lives. As people reach their golden years, however, they should plan for long term care. Why is planning necessary? According to a recent survey, 50 percent of people over the age of 65 spend time in a nursing home. Twenty-five percent of people over the age of 65 spend at least one year in a nursing home, and 10 percent of these people spend at least five years.
Unfortunately, nursing homes are not cheap. In fact, nursing home costs in the Keystone State range on average from $9,000 to $11,000 per month. This means that nursing home costs can quickly eat up your family's life savings.
Although most people want nothing but the best for themselves and their loved ones, they also would prefer not to spend all of their savings on nursing home care and would like to pass assets through to their beneficiaries after death. But, is it possible to protect one's assets while making provisions for future care needs?
It may be. One tool that many people include in long term care planning is an irrevocable trust. Establishing and funding an irrevocable trust more than five (5) years before the need for nursing home care arises, dramatically increases the likelihood that the assets in the trust will be protected from having to pay for care and will be available to pass through to your beneficiaries after death.
Irrevocable trusts can be great vehicles for accomplishing long term care planning goals and asset protection. Setting up a trust can be a complex undertaking in which the services of an experienced elder law attorney may prove quite valuable.
Source: TheTimesHerald.com, "'Be prepared' should be your motto," Matthew Wallace, April 21, 2017