Mark Gilfix Shares Insights on Long-Term Care Planning in Financial Advisor Magazine Article
Mar 6, 2015
Mark Gilfix of Gilfix & La Poll Associates LLP
Palo Alto, CA (Law Firm Newswire) March 6, 2015 – Saving for retirement is not an easy task, but many middle-income-earning couples do manage to amass a nice nest egg. However, many of these same middle-income couples face an additional financial challenge when one spouse eventually needs nursing home care. Substantial bills for this type of care often threaten a couple’s savings. The March issue of Financial Advisor magazine detailed one remedy for this challenge, a nursing home annuity, and it quoted Gilfix & La Poll Associates attorney Mark Gilfix concerning various aspects of this issue.
Because nursing home costs can be substantial, often exceeding $100,000 per year, many middle-income couples seek care from facilities whose expenses are covered by Medicaid — known as Medi-Cal in California. However, in order to qualify for care at a Medicaid-paid nursing home, the couple must reduce their assets to a bare minimum, which varies from state to state. In most states, the spouse at home can receive a limit of $2,800 in monthly cash flow and have no more than roughly $100,000 in assets, not including the family home.
As a result of the financial bind that such rules impose on middle-income-earning couples, the sales of a Medicaid-compliant annuity known as a single-premium immediate annuity, or SPIA, have recently been on the upswing. Nonetheless, as Gilfix points out in the article, some attorneys are not aware of this or other planning options.
Gilfix discusses the relative costs of nursing homes and long-term care. He also reminds readers that Medicaid does not subsidize either long-term at-home care or assisted-living care, which must typically be paid for either out of pocket or through long-term care insurance.
While an SPIA does defray the cost of nursing home care, Gilfix cautions that there is a significant drawback in situations when the at-home spouse also must go into a nursing home. In those cases, the annuity payments, normally directed to the at-home spouse, instead are lost to the cost of care. Additionally, SPIAs save nothing for the children or other beneficiaries of couples in nursing homes.
SPIAs are not relevant to California residents because rules for Medi-Cal differ from Medicaid rules in most other states. Many planning opportunities exist. Any family with a loved one facing the need for nursing home care must speak with an attorney knowledgeable about these options.
Read the March issue of Financial Advisor magazine at http://www.fa-mag.com/news/sales-of-nursing-home-annuity-rises-20997.html.
Gilfix & La Poll Associates LLP
2300 Geng Rd., Suite 200
Palo Alto, CA 94303
Telephone: (650) 493-8070
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