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On July 23, 2004, the Legislature repealed the Expanded Estate Recovery. Now that this law is gone, people are once again free to protect their homes from the ravaging cost of nursing home care.
On February 8, 2006 the President signed the Deficit Reduction Act of 2006 (DEFRA). This law extends the lookback period from 3 years to 5 years and delays the start date for any disqualification period to the date you enter the nursing home or the date that you have less than $2,000, whichever is later. This means that now, more than ever, advance planning is necessary for those who wish to protect their home and assets from the skyrocketing cost of nursing home care.
One popular method of protecting the home is the Life Estate. This is a method of transferring the home to your children while retaining the right to live in the property. For an in-depth analysis of the Life Estate, Click Here
Another popular and more flexible method of protecting not only the home, but other assets too, is the Irrevocable Income Only Trust. The trust provides all of the benefits of the Life Estate and goes even further in protection of the asset and flexibility in distribution. For an in-depth analysis of the Irrevocable Income Only Trust, Click Here.