Most seniors I speak with feel that they have worked hard their entire lives, and that they should not have to spend all of their hard-earned assets on nursing home care. They would like to pass some assets on to their children or grandchildren.
The problem with this, however, is that without proper guidance and advocacy, many seniors are often rushed into an Asset Protection plan that “protects the assets from the nursing home" and "protecs the assets for their children or grandchildren" ... and leaves the senior unprotected and vulnerable. They fall victim to the many misleading ads in print on the radio that make false claims about asset protection, use scare tactics that are simply unconscionable, or offer deep discounts to sign up "today only." No attorney worth dealing with is going to use any of these tactics to get your business. Let me explain.
There are THREE FUNDAMENTAL RULES that you must understand about ASSET PROTECTION ...
1) You have not “protected” an asset until you have given it away, either to a person or a trust, with no legal right to change your mind and take the gift back in the future.
2) There is a five-year lookback period, which means that MassHealth can look at all of your financial statements going back five years, and they will impose a penalty for any gifts you made during that five years. So, the assets are not fully protected until FIVE YEARS after you give them away.
3) You could unintentionally be forced to a nursing home if you run out of funds to pay for continued care in your home. If you “protect” assets by giving them away and getting through the five-year lookback period as outlined above, you will have no legal right to get the assets back and you may be left "unprotected" and unable to pay for the care you need to remain in your home.
Certainly it is not any senior's intent to end up having to move to a nursing home because they "protected" their assets years earlier ... but it happens. Part of the problem, in my opinion, is the prevalence of misleading ads that serve to scare and confuse seniors.
BEWARE of legal ads that encourage you to “Protect your Assets” while leading you to believe you are protecting yourself in the process … this is one example of an ad that I find to be very misleading, if not absolutely FALSE.
Learn about Asset Protection Trusts that:
1) allow you to control your assets until death;
2) allow you to retain all income from your assets
3) enable you to protect your assets from the nursing home
4) ensure you qualify for Medicaid in the shortest period of time
Let’s look back at the Fundamental Rules of Asset Protection.
Number 1 is FALSE because, while you may serve as trustee of the asset protection trust, it is not YOUR assets that you are controlling ... you gave the assets to someone else in order to "protect" them!
Number 2 is FALSE because, while you can retain the right to the income generated by the assets in an asset protection trust, the assets in the trust are no longer YOUR assets! You gave the assets to someone else in order to "protect" them!
Number 3 is TRUE and FALSE - True because after five years the assets will be protected from the cost of your nursing home care, but FALSE because, once again, they are not YOUR assets any more -- you gave them to someone else in order to "protect" them.
Number 4 is FALSE because there is a 5 year lookback. Assets transferred to an asset protection trust will not be fully protected until 5 years after they are transferred to the trust, and there is no attorney who can make you eligible with this strategy in less than 5 years. In fact, there may be ways to make you eligible sooner based on your specific situation, but not with an asset protection trust.
Some asset protection strategies may be appropriate for you, but only if you can ensure your own future security in the process. This is why a comprehensive assessment of your specific family situation, health and care needs, income and assets, and goals is critical to a successful Long-Term Care Plan. A Legal Check Up will enable you to fully understand the risks and benefits and pros and cons of asset protection strategies, and will enable you to make an informed decision based on your specific situation.
Remember, if a radio or print ad seems too good to be true, it probably is. And, if an attorney offers a discount on the cost of an asset protection plan, but the price is good "today only ..." RUN, don't walk, to another elder law attorney. These pressure and scare tactics are not appropriate and, frankly, offensive to most elder law attorneys. Your future security must be treated with the importance and thoughtful deliberation it deserves, by you and your attorney.
Call us today at 781-681-6638 to schedule a Legal Check Up or to get a schedule of upcoming seminars, or get more information at www.thelegalcheckup.com.