There is a misconception that an estate planning strategy is something the wealthy do later…
Elder law is the legal field dedicated to working out how families can affordably get their aging or ill loved ones the care they need. Elder law and estate planning work hand in hand as organizing one’s estate does not just mean preparing for death, but for the possibility of long-term illness, too. As the Covid-19 pandemic continues to ravage communities, there is no better time than now to ensure your assets are protected from costly fees.
Medicaid is often the best recourse for ensuring access to affordable long-term care. This means that even if we weren’t in the midst of a global health crisis, now would be the time to get organized. After all, even if you’ve spent your life dutifully paying taxes and contributing to your community, you only qualify for this government-assisted plan if you meet the government’s definition of “poor,” which is pretty stringent. Without advanced planning, middle-income folks unable to afford the exorbitant costs of nursing home care—something 52% of adults will need—must spend their savings down to poverty levels before the government will lend a hand. Luckily, all of this is easily avoided with a little bit of foresight.
Because Medicaid employs a five-year look-back period wherein any assets gifted count against your ability to qualify for the program, it is important to build a long-term care plan a long time before you need it. Strategic asset re-allocation ensures you both qualify as “poor” and your family retains the assets earned from a lifetime of hard work.
Importantly, this means more than gift-giving. After all, simply passing possessions across the fence, so to speak, does not protect them from bankruptcy, divorce, or creditor issues—all things Covid-19 has shown to not be as remote a possibility as they maybe once seemed. Rather, secure asset re-allocation often means a protected trust arrangement. By exploiting this legal tool, you hit all the marks: your money stays in the family, is protected from unforeseen hardship, and you qualify for Medicaid when you need it.
Many folks do not have the luxury of being able to plan in advance, however.
Setting everything up well ahead of time and resting in the peace of mind that you’ll have access to care when you need it is a nice dream but for many, it is not reality. Millions nation-wide need care right now or worse, needed it years ago but cannot afford access. Spending down life-savings until poor enough to qualify for Medicaid is not the only way out of this tragic dilemma. Asset re-allocation can also help here, though options will be more limited. Entering into the range of legal tools at your disposal is too much for the present piece but rest assured that with a little planning half or even all of your savings can be retained regardless of your situation. All that is required is that you seek out an experienced elder law attorney who can tell you how.
Contact the Estate Planning Attorneys at the Law Firm of Christopher W. Dumm