The costs associated with a stay in a nursing home continue to rise higher than ever and show no signs of slowing down. With annual costs exceeding $73,000, living in a nursing home could make short work of one’s life savings if no steps are taken to minimize or offset the damage. But what can you do to help protect yourself?

You need to realize that the majority of health insurance plans do not cover the cost of a nursing home. Medicaid may be of use, but qualifying for its coverage can be tough if you don’t meet the financial criteria. Although these criteria may seem unfair, they were put in place to prevent people from giving away their money in the years immediately preceding their entrance into a nursing home, then expecting the government to pick up the tab.

Despite these restrictions there are ways to get your assets out of your estate, legally, prior to entering a nursing home. One way is to through the use of gifts. The IRS allows up to $13,000 to be given as a gift – tax-free – each year. By making large gifts to your children, you may be able to avoid losing the money to a nursing home; of course, it wouldn’t hurt if your kids placed that money into a trust that’s created for your benefit. Another method is for your children to pick up the costs, which, if they pay at least 50% of the medical costs, allows them to deduct a portion.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.

Estate planning solves and avoids problems that you might not know even existed in your future.  Here are 6 easy estate planning solutions to everyday problems.  Have another problem not discussed?  Consult with a qualified estate planning attorney.

• I don’t want to have my asset go through probate.

A fully funded revocable living trust avoids probate and has many other benefits as well.

• I’m worried about asset protection.

Review and update your insurance coverage.  You need more than the state minimums on car insurance.  You also likely need umbrella liability insurance.  Chat with your estate planning attorney to see what’s right for you.

• I don’t want my son-in-law to get his hands on the money I give to my daughter.

Pass assets to your daughter in an asset protected trust.  Chat with her to make sure she understands the importance of keeping assets in trust.  Name a professional trustee or have your daughter serve with a professional co-trustee of her choice.

• I don‘t know how to choose a good estate planning attorney.

Ask for referrals from family, friends, and professional advisors.  Schedule a meet and greet meeting with potential attorneys and ask questions.  Get to know them and see who you are most comfortable with.  Check out their websites and blogs to get a feel for their level of experience, professionalism, and style.

• I’m in a second marriage and have kids from my first marriage.

Share your blended family situation with your estate planning attorney.  Let both your spouse and your children know that you are doing estate planning and making separate provisions for each.  Do not make your children the residual beneficiaries of any assets going to your spouse, this breeds lawsuits.

• My son is an alcoholic.

Ensure that any assets passed to your son are not outright, but in a protected life-time trust with a professional trustee.  The trustee can pay for your son’s needs directly such as paying rent to the landlord, medical payments to the doctor, and utilities directly to the company.

Consult with a qualified estate planning attorney to get these solutions in place in your estate plan.  You can prepare for the known and the unknown with good legal guidance.

John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.