Elder Law or Asset Protection Planning is the process of considering long term care expenses, examining your assets, and putting a plan in place to meet your long term care needs and security goals for your family.
What is the #1 mistake people make when planning for long term care? They wait.
When it comes to Elder Law or Asset Protection Planning time is not on your side.
- Eldercare needs tend to increase over time, and expense increases proportionately. Engaging an elder care needs assessment and starting a plan of support services early on can reduce the overall costs of care (a bathroom installed on the first floor can avoid a broken hip and nursing home care).
- Medicaid has a 5 year “lookback” period. This means that any transfers you make within 5 years of needing Medicaid to pay for your long term care needs will reduce your eligibility for Medicaid. The corollary is that transfers made more than 5 years before you need the care are not considered by Medicaid. Consider your “excess assets” - assets that you don’t need to own to support your lifestyle. Do you really care about how your house is titled if you can live in it? If you have a large account you never touch, does it matter to you if it is held in a trust that your children can access?
- If you are suddenly ill you are in crisis planning mode. Nobody every planned well in a crisis. Instead, they just react and only at the end consider “I could have dealt with this cheaper, better, and less stressfully.” Creating an Asset Protection Plan when you aren’t ill is a blueprint for your family when you do become ill of how to maximize your care and your families security. Now, isn’t that gift worth giving?
- The assisted living you want to move to has a “private pay” requirement. Now, this is not advertised, but it is highly likely that the assisted living you would like to move to has a “private pay” requirement where you need to have a certain amount of assets just to move in ($50,000, $100,000, $200,000). If you have spent all your money on 24/7 home care you may not have the funds to move into the assisted living of your choice when you want to. An Asset Protection Plan will account for this in making recommendations for how your assets are divided between long term care needs and security.
