Paying for Home Care with Personal Assets

By The Care Centers.

When your loved one needs home care (link to Home Care: What It Is and What You Should Expect) , the costs can quickly become overwhelming. If a move to a nursing home is required, those costs can increase to as much as $5,000 per monthor higher depending on the area. While some may be lucky enough to have insurance coverage, or qualify for government programs, most have to decide how to cover those costs out of their own pockets. One way to address these costs is to consider personalassets.

Savings Accounts - For many seniors, their savings accounts are the first line of personal assets that are used to pay for home care. Depending on how well your loved one was able to save over the years, these funds can run out quickly. Your loved one can also sell stocks, bonds, and other investments to secure the funds needed for his or her care. 

Personal Property - If your loved one owns artwork, jewelry, or other personal property that has value, you can look for buyers to liquidate them. If there are family heirlooms or antiques, these may be worth a considerable amount of money, but you need to make sure you discuss this with your loved one and other family members. While care is important, losing these valuables can be devastating to a senior who is already dealing with a loss of health or independence.

Reverse Mortgage - A reverse or home equity conversion mortgage (HECM) is a loan that is designed specifically for those who are over the age of 62. This type of loan is essentially an advance on the equity in the home, and provides your loved one with monthly payments or a lump sum that he or she can use for home care services. If you are considering an HECM, you need to fully understand the potential disadvantages:

  • Repayment – HECMs must be repaid when the last owner leaves the home, with payment often being required within one year. If your loved one moves to a nursing home, that amount will be due. Additionally, all loan amounts will be taken from the proceeds if the home is sold.
  • Cost – These loans typically have high costs due to insurance, processing, interest and other charges.
  • Need-Based Benefits – If your loved one receives food stamps or other need-based assistance, receiving the loan in a lump sum or as a line of credit may affect them.
  • Estate Planning – If your loved one is leaving the home to a beneficiary, he or she will be responsible for the loan if the balance is not paid at the time of death.

Family - If there are family members who can assist with paying for home care (link to Top Five Tips to Lower In Home Care Costs), it is best to get any agreements in writing to avoid problems later. Additionally, these payments should be given directly to the provider if possible to ensure that it is not considered as a part of your loved one’s income.

Paying for home care can be difficult, but your loved one’s personal assets can help offset these costs.


Tags: Home care