Asset protection is one of the fundamental concepts of successful estate and elder law planning. When performed properly, a family can take comfort that their assets will be safe guarded.
In an estate planning context, asset protection techniques may involve the following objectives:
- Protecting the assets for children, grandchildren and other minors;
- Planning for a loved one with special needs;
- Establishing a plan to preserve one’s assets for retirement and for the support of loved ones;
- Planning for when one is unable to manage his/her finances;
- Protecting against those who might abuse one’s trust; and
- Avoidance of negative tax consequences.
For elder law planning, specifically Medicaid eligibility to help pay for nursing home and other long-term care, there are two types of approaches to family asset protection planning:
- Proactively planning ahead to timely maximize opportunities to shelter income and assets for loved ones against the high cost of long-term nursing home care; and
- Crisis planning which is named as such due to the imminence of long-term care.
With the average Florida nursing home costing $9,000/month, a prolonged nursing home stay can be potentially financially devastating to the family. For this reason, Medicaid planning must be accomplished in a timely manner and with particular care so as not to violate any of the myriad of Medicaid rules and regulations that could result in ineligibility. It is especially true that in this context, asset protection planning takes on a special urgency and often requires a sophisticated approach.
While there are many complex rules and exceptions, the applicant basically has to “spend-down” virtually all of his or her resources to be financially eligible for Medicaid. Having said that, there are special rules and regulations that apply to such spend-down which allow for the preservation of certain assets and expenses. In addition, there are special provisions applying to spousal impoverishment which need to be accounted for to see how the Community Spouse, the spouse not residing in the nursing home, can continue to survive financially.
Know that one cannot necessarily avoid inclusion of one’s assets by giving them away, transferring one’s home or establishing joint accounts. Rather, special planning techniques need to be implemented in appropriate cases to maximize asset protection opportunities. Because of the complicated technical rules, a thorough knowledge of the rules and regulations is imperative. A simple mistake can be catastrophic. At Family Elder Law, you can be assured that a certified expert in Elder Law will be explaining the process to you in understandable terms while identifying planning opportunities to help you protect your assets and income. Through proper asset protection planning, we can alleviate the stress caused by the fear of losing all the assets you worked so hard to accumulate.