Today, costs for long-term care can decimate a family's finances. The Arizona Long Term Care System (ALTCS) pay-rate for skilled nursing home care in Pima and Pinal counties is just under $78,000 per year, and private pay rates are even higher! These high costs of long-term care have created significant difficulties for many seniors and their families. While wealthy families can afford to pay for this expensive long-term care, the costs can wipe out the savings of all but the wealthiest families in only a few years. Some have planned for this situation with long-term care insurance, but unfortunately, many cannot afford the expensive long-term care insurance premiums or cannot qualify for insurance due to age or pre-existing medical conditions. Without planning, most people pay for the nursing home care out of their savings until they run out of money and finally qualify for ALTCS.
What Financial Thresholds Must Be Met to Qualify for State Assistance?
Qualifying for ALTCS financial assistance requires an applicant to meet strict asset and income maximum thresholds. To qualify for state assistance, a single applicant cannot have more than $2,000 in countable assets. Countable assets generally include anything the applicant (or the applicant’s spouse) owns, with a few exceptions. (Examples of exceptions include a home (but not always), a car, and personal items). Unfortunately, IRA assets are countable in Arizona, unlike in some other states. Assets in a trust where the applicant is a beneficiary are also countable assets. Thus, a 68-year-old non-married applicant with a home and $100,000 of savings in bank accounts, stocks, CDs, etc., and another $100,000 in an IRA, will only qualify for ALTCS assistance after spending $198,000 in assets on long-term care costs. In addition, while the home is not a countable asset, the state may be able to obtain a lien against the home equal to the ALTCS assistance the state provides. (Thus, if after the applicant qualifies for ALTCS and until the applicant’s death, the state pays for $100,000 of the applicant’s long-term care costs, the state will often be entitled to $100,000 of the equity in the home to reimburse the state for the assistance it provided.)
While the specific thresholds and rules are slightly different for a married applicant, the results are similar. Most of the couple’s assets can easily be spent on long-term care before the applicant becomes eligible for ALTCS assistance. A lifetime of work and earnings will be consumed by long-term care needs and very little will be left to the applicant’s loved ones.
The maximum gross monthly income threshold to qualify for ALTCS assistance is $2,130 per month. However, those with incomes above the maximum monthly income threshold can often still qualify for ALTCS assistance by creating a special Income Only Trust (often called a Miller Trust) for their income, which our office can help create as part of our ALTCS planning.
How Can We Help?
Through strategic legal planning, the Law Office of David I. Karp can help applicants qualify for ALTCS assistance sooner while protecting a significant portion of the applicant’s assets so that the results from the applicant’s lifetime of hard work can pass to the applicant’s spouse and beneficiaries, even if the applicant needs long-term care immediately. In addition, we can help those who want to plan ahead for their potential long-term care needs and protect their assets but cannot qualify for long-term care insurance. Please contact our ALTCS planning law firm for a free half-hour consultation to see if we can help you or your loved ones.