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FAQs #29

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Q29. My parents have been worried about protecting their assets if they need to go to a nursing home or need long term care. She is 71 and he is 73. To ease their anxiety, they have recently bought a 3 year long-term insurance policy. They also have Medicare and supplemental health insurance coverage. They have heard that you must transfer assets at least 3 years before going into a nursing home.
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What assets are exempt from this 3 year law. If they decide to transfer funds to myself and my brother, how much per year or month can they give us without us having to pay taxes on this money? Please add any other advice about protecting assets for the elderly.
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It is sad to know that people who have lived their life responsibly, worked hard and saved their money may have to give all their assets to the nursing home before they can benefit from Medicare coverage. Thank you for your time and I look forward to hearing from you.
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A29. Bill Beyers, Elder Law Attorney:
>The three year rule only becomes relevant if a person applies for Medicaid upon entering a nursing home. Upon applying for Medicaid, a person is only allowed to keep $2,000 of non-exempt assets (more if there is a spouse living at home). The most significant exempt resources a person can keep in addition to the $2,000 are the following:
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    1. A person's home regardless of its value, so long as the person either intends to return home or, if not, a spouse or dependent relative continues to reside in the home.
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    2. One motor vehicle regardless of value if it is used to obtain medical treatment for the person applying for benefits. If it is not used for medical treatment, its value is excluded up to $4,500. If the vehicle is worth more than $4,500, the excess amount is applied toward the $2,000 limit.
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    3. Wedding and engagement rings of any value.
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    4. Medical equipment of any value required by the individual.
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    5. Life insurance is exempt if the total face value of all policies is $1,500 or less. If the aggregate face value of all policies owned by an individual exceeds $1,500, the total cash surrender value of all policies is counted toward the $2000 limit.
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    6. An irrevocable funeral and burial or cremation plan of any value.
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    7.  IRAs and pension funds of a non-institutionalized spouse.
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    8. There are a few others but their application in most cases is rare. I hope this helps. Let me know if I can be of further assistance.
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Lisa Loehr
Home Instead Senior Care, Inc
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Fort Collins, CO 80525
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