A Case of Asset Protection

A recent client was still working at age seventy-five, but not necessarily by choice. His wife was suffering with Alzheimer’s disease, and had been living at a long-term care facility for seven years. 

During our conversation it became clear that the only reason he continued to work was to pay for his wife's care. He was exhausted, yet unsure about alternatives… 

He felt trapped... 

Like many people, he was confused about asset protection in a case where only one spouse was in need of long-term care. He had also been told about a five-year “look-back,” didn’t know whether his home and other assets were protected, and was worried about the fact that he had not done any planning. 

In fact, he confessed he wasn’t quite sure about how the look-back worked or how he could possibly maintain his wife's care if he were to stop working or, even worse, suddenly be unable to do so. 

The Good News... read the case study.

Common Misconceptions When Only One Spouse Needs Long-term Care

People are frequently unsure about asset protection issues, especially  in cases where only one spouse is in need of long-term care. 

In one case, our client had been told about a five-year “look-back,” and didn’t know whether his home and other assets were protected. He and his wife were also worried about the fact that he had not done any planning. 

Fortunately, and despite common misconceptions, there are times when it is possible to transfer assets between spouses, even though one of them is in a nursing home...

Read case study...

More Gifting & Medicaid-Related Misconceptions

Speaking of gifting, many people think that they cannot give anything away and receive Medicaid.  

 

Others are under the impression that inheritances are protected if the other spouse goes into a nursing home, or that "protected" assets pursuant to a prenuptial agreement will not be countable if the other goes into a nursing home.

However, these common assumptions are NOT true.

 

The Medicaid rules do provide some exceptions to the disqualification rules and therefore, some asset transfers are not penalized. For information relating to these exceptions, it is important to consult an attorney who is familiar with the laws of Medicaid.

Elder Law 2013 - Many Changes!

The American Taxpayer’s Relief Act (ATRA) of 2013 has brought about an new tax paradigm in which planning must focus on capital gains, asset protection, state tax issues, income tax issues and Medicaid planning, all of which fall under the elder law umbrella.  

This will create new challenges for families as well as estate planning generalists that are not experts in the elder law component of estate planning.

We attended this year’s Heckerling Institute for Estate Planning conference in Florida because, more so than ever before, the estate planning and elder law landscape has changed, having been impacted by a number of factors, including the ATRA and a continually-aging U.S. population  in which nearly 10,000 Americans turn 65 every day!

We will share developing perspectives about elder law in our upcoming posts based on the above-listed changes.