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How Can an Elder Law Attorney Protect One’s Assets?

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Elder law attorneys employ various legal strategies and tools to help protect the assets of their clients, particularly in the context of long-term care planning and estate planning. The specific approach will depend on the client’s unique circumstances and goals, but here are some common ways in which an elder law attorney can assist in protecting assets:

  1. Medicaid Planning: Medicaid is a government program that provides healthcare coverage for low-income individuals, including long-term care for seniors. Eligibility for Medicaid often depends on income and asset limits. Elder law attorneys can help clients structure their assets and income to meet Medicaid eligibility requirements while preserving some of their wealth.
  1. Asset Transfers: Attorneys may assist clients in transferring assets to family members or into certain types of trusts. These transfers must be made within the rules and limitations set by Medicaid and other government programs to avoid penalties and ensure compliance with relevant laws.
  1. Irrevocable Trusts: Irrevocable trusts, such as Medicaid Asset Protection Trusts (MAPTs) or irrevocable life insurance trusts (ILITs), can be used to protect assets from long-term care costs while still allowing the grantor to retain some control over the assets.
  1. Spousal Protection: When one spouse needs long-term care, an elder law attorney can help ensure that the other spouse is not left financially destitute. This may involve the use of spousal refusal or spousal impoverishment rules, which can protect a portion of the couple’s assets.
  1. Annuities: In some cases, annuities may be used as part of a Medicaid planning strategy to convert excess assets into a stream of income, allowing the senior to qualify for Medicaid while still preserving some financial security.
  1. Gifting Strategies: Attorneys can help clients develop gifting strategies to transfer assets to heirs or beneficiaries in a way that minimizes gift tax consequences and ensures compliance with Medicaid rules.
  1. Homestead Exemptions: In many states, the primary residence is exempt from Medicaid asset calculations, allowing seniors to keep their homes while receiving long-term care benefits.
  1. Care Contracts: Legal agreements, sometimes referred to as personal care contracts or caregiver agreements, can be established to compensate family members or caregivers for providing care services. These contracts can help document and legitimize caregiving expenses.
  1. Life Estate Deeds: Life estate deeds allow individuals to transfer the ownership of their property to heirs while retaining the right to live in the property for the rest of their lives. This can protect the property from Medicaid recovery after the individual’s passing.
  1. Insurance and Annuities: Elder law attorneys may recommend long-term care insurance or annuities as part of a comprehensive asset protection plan to cover future care costs.

It’s essential to consult with an experienced elder law attorney to determine the most appropriate asset protection strategies based on your specific financial situation and goals. Keep in mind that asset protection planning should be done well in advance of the need for long-term care, as there are look-back periods and legal restrictions that may affect the timing and effectiveness of certain strategies. Additionally, it’s crucial to stay compliant with all applicable laws and regulations to avoid potential penalties or disqualification from government benefits programs like Medicaid.

The law office of elder law attorney Scott C. Painter, P.C., is located in Wyomissing (outside of Reading, PA, in Berks County,) and offers trusted legal services in the areas of elder law, including nursing home planning, trust and estate services, and veterans benefits. Scott C. Painter is a Certified Elder Law Attorney (CELA®), and he is also a member of the National Association of Elder Law Attorneys (NAELA). 

If you have an issue or question, we encourage you to call us. With legal matters, time is of the essence. Call us for a consultation at 610-378-5140. The $300 consultation fee is waived if Attorney Painter is retained to perform services.