Asset protection is a collection of strategies designed to guard a person’s wealth and help them plan for the future. It can help people who need Medicaid or Veteran’s benefits, so that they do not have to exhaust their life savings in order to quality for aid for things like long-term care. Planning for long-term care anticipates eligibility for payment of long-term care services through Medicaid or the U.S. Department of Veterans Affair’s Non-Service Connected Pension.
Are you considering an asset protection strategy? Keep the following tips in mind as you consider your options to plan for your future.
Most asset protection strategies are only effective if they are put in place before they are needed. This is because what you do after a claim arises can be undone by “fraudulent transfer”
law. Keep in mind that the point in which a claim arises is much earlier than you might think.
While an asset protection plan can be effective, not all plans will protect you, and none of them will protect you after the fact. A professional asset protection attorney can help you choose the right option for you. A properly executed plan can ensure that a portion of your assets are protected for your own benefit and for that of any heirs you might have.
For seniors who will need constant nursing care, the costs of assisted living or even at home aid can be very overwhelming. There are stipulations for you to be able to quality which consider any assets including cash, mutual funds, stocks, bonds etc. In 2005 Medicaid planning became more challenging with the passage of the 2005 Deficit Reduction Act. This act extended the asset transfer “look back” period to five years. This means that anything you transferred within five years of applying for benefits can be counted as income/assets and deem you ineligible for long-term care Medicaid benefits.
Fortunately, by utilizing trusts, you may be able to quality for Medicaid while preserving a portion of your wealth for loved ones. It is important to plan this in advance, as there are rules regarding the time between when you transferred assets and when you need Medicaid benefits. Through comprehensive planning and utilization of creatively blended legal strategies such as long-term care insurance and asset protection trusts, elder law attorneys can help you keep most of what you have earned when faced with the high costs of long-term nursing home care.
There are trusts designed specifically to protect a veteran’s assets while allowing them to be eligible for benefits that are specific to veterans. The rules for such trusts are a bit different for veterans and there are many variables to consider during the planning process. Friedman Elder Law is here to help you understand your options for long-term planning and to help you choose the best course of action for you.
Qualification for the VA’s Non-Service Connected Pension which is a tax-free benefit that provides monthly cash payments to help cover the costs of non-reimbursed medical expenses, often requires a restructuring of assets, utilization of asset transfers, or conversion of countable resources into exempt assets.
If you have an estate plan, keep it in mind as you make your asset protection plan. Often, the two work together, but you need to ensure that they are not at odds and that your tactics work for the type of plan you are making. For example, gifts to children and heirs is common in estate planning; however, gifts in asset protection plans can often be set aside as fraudulent transfers. A professional can help you navigate these distinctions. As you can see, asset protection plans can be complex but there are several options that may fit your specific situation.
Asset protection plans can be wonderful tools; to determine which tactic might be right for you, reach out to our experienced asset protection attorney for assistance. We are here to help you plan for your future and ensure that you can take advantage of the resources available to you when the time comes. Contact us today to schedule a consultation.