Protect Your Assets When You Go To Nursing Home

Most people understand what is called “black-letter” law. Black-letter laws are the basic rules of law that govern a given situation. The information is there, but many fail to understand that there are also exceptions to the “black-letter” law, and many fail to take advantage of it. The key is to not only understand the black-letter law, but also understand the exceptions and how to combine these to accomplish your goals.  

Comprehension of the law and how it applies to you is the first step. How to successfully use that knowledge is gained over time through experience. There are too many variables to account for and every situation is unique. The right attorney not only understands black-letter law but also understands the exceptions and can advise you on how to combine these laws to fit your needs and wishes. 

Nursing Homes

People ask about how they can protect their assets when they go into a nursing home. Nursing home costs are high. A single room can be close to $100,000 a year. Black-letter law tells us that you have the “spend-down” your assets in order to qualify for any benefits like Medicaid or Veteran’s Aid and Attendance.

Those who face the possibility of long-term care are torn. They want to preserve their assets to pass on to others—but they also need to pay for their immediate needs. An elder law attorney can help you do both.  

Create A Trust

If you are looking to protect your assets and still pay for nursing home care, ask your attorney about these two trusts:

  • Irrevocable Trust
  • Asset Protection Trust (APT)

Some people give away their assets to qualify for Medicaid. Because Medicaid is their way of paying for the nursing home, they “spend down.” After a spend down, their assets are below the threshold for Medicaid eligibility. 

Another way to achieve this is through an irrevocable trust. When your assets get placed into this trust, they are no longer legally yours—they belong to the trust. You will have no way of controlling the principal. But you can have the use and enjoyment of the assets during your lifetime, e.g., your home. 

If your home is in an irrevocable trust and gets sold, the proceeds will not make you ineligible for Medicaid. And if you choose to create a revocable trust, you will not have asset protection. In the eyes of the government, everything in a revocable trust is still yours. 

Asset Protection Trusts—when created properly—offer you asset protection as well as keeps you in control of your assets. They can even prevent your assets from being seized by creditors. One of the most notable aspects of it is that you can still access the funds. You can be a beneficiary. 

However, there are very complex rules and regulations surrounding Asset Protection Trusts. For some, these stipulations don’t outweigh the benefits. But this is a discussion you can pursue with your lawyer. 

Elder Advisors Law

At Elder Advisors Law, the first step is listening. Your needs dictate how we will apply the law to protect you and your assets. With our free asset protection analysis, we can explain how at-risk your assets are compared to your degree of estate planning. If you want to protect your assets before entering a nursing home, contact Elder Advisor Law for your consultation. And if you are just starting or would like to learn more about estate planning and asset protection, sign up for our complimentary workshops.

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Elder Advisors Law

As Leaders in Estate Planning and Elder Law, we are passionate about helping families protect their hard-earned assets from the government, nursing homes, lawsuits or other predators.

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