Long Term Care in New Jersey

by | Nov 29, 2023 | Videos

Long Term Care in New Jersey

In this episode (video episode # 362), Tom shares some information about the Medicaid process and long term care here in New Jersey.  It’s no surprise, the cost of long term care in New Jersey (and around the country) continues to climb every year.  Tom shares an example where eight years of long term care in New Jersey ran $1,000,000.

Long-term care often happens when individuals reach into their 80’s.  With a five-year look-back period, proper planning should be happening when individuals are in their 70’s – or possibly even planning for future events in the late 60’s.  Only you will know the right time to begin planning for elder care.

It’s important to keep in mind with the 5-year lookback period, Medicaid will research every single financial transaction for the previous five years before calculating your eligibility for long term care.  Assets transferred out of your name, prior to five years before the Medicaid application, should be OK, and not counted toward your ability to pay the cost of long term care… whether in your home, or in a facility.

Long term care is easily one of the most frequently asked topics when planning with our clients for their future.
and we have written and talked about several times.  In fact, you can recent posts we have made here and here on long term care.
Catch all our Mullooly Asset videos here, or also on our YouTube channel.

Transcript for “Long Term Care in New Jersey”

In this episode we’re going to talk about the five-year “look back” window and Medicaid. Stick around.

Is mom, dad – or someone in your family – at the point where you need to start talking about long term care?

It’s a topic a lot of people want to avoid. They want to push off talking about it – until the very possible minute.

And that’s where we start to run into problems.
There’s a 5 year “look back” window that’s been established by Medicaid.

You really need to know about this. Because earlier in my career it used to be a 3 year “lookback” window. But there were so many shenanigans going – on assets being moved everywhere – that Medicaid – nationwide changed this to a 5 year “look back” window.

Just to put this into perspective, if you have someone that’s going into a long term care facility, or they’re going to be applying for Medicaid, say on January 2, 2024 …

Medicaid is going to be looking at every single financial transaction.

I’ll say that again.

Going back to December 31, 2018.
I don’t even remember 2018 – it’s that long ago.

They’re going to look back at five years of financial transactions.

You may think you get lucky and think “Medicaid and the IRS are the same thing… so I have a very small chance of being audited.”

Know that Medicaid is run by the states. This is all they do, all day long.

They are going to ask for all of the bank records. They’re gonna look at everything that’s happened (financially) over the previous five years.
Don’t play games with this – because it can wind up biting you in the butt.

So what do you do?

Can you buy a long term care policy – for someone who’s 81 years old?

I don’t even know if they can apply – they may be too old.

And even if they were somehow approved for coverage, it would be exorbitantly expensive.
It’s not something you really want to consider.

So (one of) the only paths left for folks is either:
– just pay out of pocket, or
– consider transferring assets out of your name.

You can use things like an irrevocable trust, to help get assets out of your name.

I’m not a lawyer. And I’m not giving legal advice.

I also know that lawyers want do the right thing when they talk about irrevocable trusts.

But sometimes these trusts come with tax strings attached to them. So you need to look at the whole picture – before deciding is an irrevocable trust – a situation, a vehicle, that we really should be using?

Not all folks are going to need long term care. But understand that most people who need long term care are their 80’s. And so the time to do this kind of planning is when someone is in their 70’s.
Or possibly even late 60’s.

Only you know the situation – or the time that’s right – for what’s going on in your family.

Speaking of families there was a family in town. They had a couple of bucks, but they certainly weren’t Rockefellers, by any stretch of the imagination.

The husband needs to go into a long term care facility. Now, I will say the average stay in a long term care facility is – depending on the report you read – between 21 and 24 months – just shy of two years.

Husband goes into the nursing home. He is there for FOUR years. It’s expensive.

Sure enough, after he passes away; one year later, his wife needs to go into a long term care facility.

And wouldn’t you know it – she is in a long term care facility for FOUR more years.

I just want to put this in perspective for everybody watching this video. Eight years of long term care in 2023 – in the state of New Jersey.
Do you know what 8 years of long-term care costs? A million dollars.

A million dollars.

Long term care can be very expensive. And it can upset the plans of a lot of people that need go into these long-term facilities, or need long term care, for the rest of their lives. It’s worth having a conversation. It’s worth doing a little digging and looking into.


Join our Newsletter


Future-Proof Your Finances

Download the 25-Year Success Strategy

Enter your email & get this free PDF download to help you prepare for the next 25 years.  We will send periodic updates as well. Unsubscribe at any time.

You have Successfully Subscribed!

Share This