This week I met with a married couple in Mandeville who owns multiple pieces of real estate here in Louisiana. The real estate comprised the bulk of their assets and they didn’t have much else in the way of liquid assets. The husband is in the early stages of dementia and they are concerned about his need for long term care in the future. To address this concern, they wisely purchased long-term care insurance policies years earlier. However, the coverage on these policies only extends for 3 years. They are worried that 3 years of coverage will not be enough because while the husband’s mental health is deteriorating, his physical health is that of a man with many years to live. Often with cognitive illnesses this is the case, and stays in nursing facilities can easily extend to 5 to 10 years or longer.
This couple knows that if he is forced to enter a long-term care facility and remains in that facility for a period longer than 3 years, they will begin having to use their other assets to pay for the care because the value of their real estate makes it such that they will not qualify for aid to pay for their care. With non-liquid assets like real estate, this means selling off real-estate to raise funds to pay for the care. They wanted to avoid this forced sale of properties to pay for long- term care costs.
To accomplish this we are setting up an irrevocable trust. The couple can still manage, lease, and sell the properties in their trust for as long as they live. However, because the assets are titled in an irrevocable trust, they will not count against their eligibility to receive aid for long-term care as long as those properties remain in trust for at least 5 years. This means that by placing assets in trust, they will never be put in a position where property must be sold as long as they wait five years before applying for aid. In addition, all of the property will avoid a court-supervised probate process after each spouse passes, saving the family time, money, and stress.
If you own multiple properties that you want to protect from long-term care costs, call (504) 274-1980 in the Metairie and New Orleans Area or call (985) 246-3020 in Mandeville, Covington, Slidell, Houma, Thibodaux, and surrounding areas.