Asset Protection Planning: Preserving Your Assets and Protecting Your Family

As Published in Long Island Press, longislandpress.com and danspapers.com

If you’re like most people, you worked hard all your life, raised a family, and provided a leg-up for your children. But now that you need care, the cost is going to wipe out your family’s assets in short order. Your spouse will be left scraping by, and your kids will have no inheritance whatsoever.

This is not how it was supposed to be. That’s where asset protection comes in.

Asset protection planning focuses on protecting your money from the high costs of long-term care, such as nursing home care, home care, and assisted living (the ALP program only). This can be accomplished by transferring money, investments, real estate or other assets into an irrevocable trust. However, asset protection planning is only effective if you make the transfers 5 years in advance. Accordingly, early planning is critical.

The Benefits of Asset Protection Planning
• Qualifying for Medicaid benefits to pay for the costs of home care, nursing home care, assisted living/ALP
• Preserving assets to pass on to the next generation/heirs/loved ones
• Protecting assets for your spouse/avoiding spousal refusal litigation
• Avoiding probate
• Transfer and management of assets by the next generation

Asset Protection Trusts
Protecting assets is important to everyone; no one wants to spend down all of their assets to pay for nursing home or other long-term care. The goal is to become eligible for Medicaid if and when the need arises. By planning ahead with an Asset Protection Trust, you can ensure that you will qualify when you submit a Medicaid application without spending down your family’s assets.

Irrevocable Trusts
In order to protect assets, the Asset Protection Trust must be irrevocable. This means that the living trust cannot be revoked, amended or terminated by you alone, but can be with the consent of the trust beneficiaries.

An irrevocable trust set up for asset protection purposes can hold almost any type of asset, including your home, bank accounts, and investments. You cannot have access to the principal of the  trust, but you can retain the right to receive the income (dividends and interest). After five years have passed, the assets held in the trust are protected with respect to Medicaid. You would not have to spend down those assets on the cost of care, and instead the assets are protected and will be inherited by your beneficiaries.

In this highly specialized area of law, it is imperative that you work with the experienced and knowledgeable Asset Protection attorneys at Cona Elder Law to be sure your assets are preserved and your loved ones protected.