One part of estate planning is finding out how the decisions you make now might impact your financial future and the estate. This is something that is often the focus when you are developing an estate plan.
There is one area that some people often can't figure out what option is the best option -- getting ready for the days when you might need assisted living or skilled nursing care. In this case, assets, such as vacation homes, might limit the options that you have for covering the costs of the care.
You do have the option of putting the vacation home in an irrevocable trust. This is something that can help you to reduce your assets to a level that won't count against you if you need assistance paying for long-term care. Of course, there is a caveat that you need to know about if you are considering this option.
One thing that you have to remember if you are going to place the home in a trust or if you are planning on issuing gifts to loved ones is that there is a five-year look-back rule for Medicaid. This means that any transactions that you've had regarding your assets in the five-year period prior to the application for coverage is considered.
Because planning your estate with Medicaid eligibility in mind is a challenge, you should make sure that you know the rules that will apply to you. With the cost of nursing homes in New Jersey hovering around at least $12,000 per month, you can't afford to make any errors here. An attorney can help ensure you don't.
Source: NJ.com, "Should vacation home be put in trust?," Karin Price Mueller, Aug. 11, 2017